MOHD YOUSUF Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THESE are two writ petitions (Civil Writ Petitions Nos. 13865 and 13599 of 1996) filed by two brothers, namely, Mohd. Yousuf and Mohd. Rehmat Ullah, respectively, under Article 226 of the Constitution for quashing the orders passed by the Commissioner of Income-tax, Patiala* for the assessment years 1988-89 and 1987-88. Since the facts and questions arising in both the petitions are identical, these are being decided together.

(2.) BOTH the petitioners herein had invested, as partners, certain money by way of capital in a partnership-firm, Azad Rice Mills, Malerkotla. The Assessing Officer issued notices under Section 147 read with Section 148 of the Income-tax Act, 1961 (for short, "the Act"), on the ground that certain taxable income had escaped assessment. Both the petitioners filed returns of income, showing only agricultural income. Notices had been issued for the assessment years 1987-88 and 1988-89. Since the present writ petitions relate to a question regarding waiver of interest for the assessment years 1987-88 and 1988-89 the facts relevant to those orders are being examined.

(3.) IN the case of Mohd. Rehmat Ullah (in CWP No, 13599 of 1996), assessments were framed, after issuing notice under Section 147 read with Section 148 of the Act, by a common assessment order dated March 28, 1994,, for the assessment years 1987-88 and 1988-89. Taxable income was determined by the Assessing Officer for the assessment year 1987-88 at Rs. 1,05,000. Interest was also charged under Sections 139 (8) and 217 of the Act. In appeal, assessment made at Rs. 1,05,000 for the assessment year 1987-88 was upheld by the Deputy Commissioner of Income-tax, vide order dated March 16, 1995. The Deputy Commissioner rejected the petitioner's plea that the petitioner derived income from agriculture only and that income was not taxable. The petitioner thereafter filed an application before the Deputy Commissioner for waiver of interest charged under Section 217 of the Act. The Deputy Commissioner sustained interest for one year and waived the balance amount charged under Section 217 of the Act. The application for waiver of interest charged under Section 159 (8) had earlier been rejected by the Assessing Officer. The petitioner filed a revision application before the Commissioner of Income-tax under Section 264 of the Act but that was rejected.