GANESH STEEL TRADERS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE present application has been filed for quashing the order dated March 30, 1992, passed in Complaint Case No. 294 of 1992, taking cognizance under Sections 276C and 277 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), against the petitioners.

(2.) THE complainant-opposite party filed a petition of complaint alleging, inter alia, that the original assessment of the firm was made under Section 143(1) of the Act on a total income of Rs. 15,310 on October 15, 1986. THEreafter, a search was conducted and documents were seized on July 11, 1988, and, thereafter, a notice under Section 148 of the Act was issued to file a return. On scrutiny of the relevant documents, which were seized from the search, the assessment was completed on a total income of Rs. 1,73,935 under Section 144 of the Act and a penalty proceeding was initiated. THE scrutiny of the books seized from the residence of one of the partners, namely, Ashok Kumar, revealed sale proceeds of Rs. 51,500 on three different dates. Page 4 of the exercise book showed cash sales of Rs. 25,936 from April 6, 1985, to April 12, 1985. None of these sale proceeds appeared in the regular books of account. Another entry made in another exercise book showed cash sales from May 8, 1985, to June 6, 1985, of Rs. 55,247 and expenses were shown as Rs. 8,574 during the said period. Further, advance of Rs. 9,650 was also made to different parties. Rs. 10, 846 was estimated as interest on these advances. THE records further showed that the firm has earned interest during the relevant period but did not show it in the relevant documents. Thus, it was alleged that the accused persons wilfully did not file the return in response to the notice under Section 148 of the Act and failed to furnish particulars called for under Section 142(1) of the Act and as such they committed an offence punishable under Section 276C of the Act. THE accused also concealed all the particulars of income or deliberately furnished inaccurate particulars and thereby wilfully attempted to evade tax chargeable or imposable under the Act. THEy have also made a false statement in the verification portion of the return and as such committed offences punishable under Sections 276C and 277 of the Act.