AMBASSADOR DRY CLEANERS Vs. UNION OF INDIA

JUDGEMENT

(1.) BRIEFLY stated, a writ petition was filed by the petitioner, which came up for orders on second stay application on May 17, 1991 (see [1991] 192 ITR 487). No reply, as yet, had been filed by the respondents, but with the consent of both the parties, it was finally decided, on the same day. Thereafter, the abovementioned miscellaneous application dated May 23, 1991, was filed, with a prayer to modify the aforesaid order on the grounds mentioned therein. Mr. G.S. Bapna, learned counsel for the respondents, during the course of proceedings, on October 22, 1992, requested that since no reply has been filed on behalf of the Revenue, an opportunity may be given to file a reply to the writ petition, to which learned counsel for the petitioner had no objection. The time for filing the reply was granted from time to time and the reply was filed on March 16, 1993. The order dated May 17, 1991 (see [1991] 192 ITR 487), was recalled and the matter was heard again on March 18, 1993.

(2.) IT is submitted by Mr. Anant Kasliwal, learned counsel, that the petitioner is a partnership firm carrying on the business of dry cleaning, at Jaipur. The business premises of the petitioner were surveyed under Section 133A of the Income-tax Act (for brevity, "the Act"), on September 7, 1979, and, on account of some incriminating documents/bill books and other material, the assessments for the assessment years, 1975-76 to 1979-80 were reopened under Section 148 of the Act. While completing the fresh assessments under Section 143(3)/148 of the Act, the Income-tax Officer rejected the books of account and applied the net profit rate of 25 per cent. on receipts disclosed by the assessee. These assessments were set aside by the Tribunal to the stage of filing the revised returns, vide its order dated May 30, 1986. In the revised returns of income-tax, for the abovementioned years, the petitioner disclosed its income by applying a net profit rate of 25 per cent. on the receipts, as held by the Inspecting Assistant Commissioner in the case of the assessee for these very assessment years. These revised returns were filed under the amnesty scheme. In these assessment years, the income computed by the Income-tax Officer is the same as written by the assessee in these revised returns, claimed to have been filed under the amnesty scheme. Similarly, the assessment for the assessment year 1980-81 was also computed in the same manner. The petitioner moved an application dated September 8, 1988 (annexure 1), before the Chief Commissioner of Income-tax, Rajasthan, praying for waiver of penalty under Section 273A of the Act for the abovementioned assessment years, i.e., 1975-76 to 1980-81. IT was further stated that the petitioner claims benefits of the amnesty scheme. Another application dated April 5, 1989 (annexure 2), was filed, praying that the intention of the petitioner in filing the application (annexure 1) was only to file the same for acceptance of voluntary returns under the amnesty scheme. IT was prayed that the same may be treated to have been filed under the amnesty scheme and not under Section 273A(4) of the Act. Non-petitioner No. 4, Income-tax Officer, served a notice dated August 20, 1990 (annexure 7), on the petitioner, regarding assessment of the returns filed by the petitioner. The petitioner thereupon filed an application before the Chief Commissioner of Income-tax requesting that since the revised returns have been filed under the amnesty scheme, prosecution of the petitioner under Section 276/277 of the Act be not pursued and withdrawn. The Revenue thereafter did not produce any evidence before the Special Judge, Economic Offences, Jaipur, and, vide letter dated June 29, 1990 (annexure 3), conveyed the decision of withdrawing the cases of the petitioner. The petitioner thereafter personally met non-petitioner No. 4 on March 20, 1991, and requested him not to proceed with the notice dated August 20, 1990, issued in respect of the penalty proceedings, in view of the fact that the petitioner had submitted revised returns in pursuance of a scheme and has reliably learnt that the Chief Commissioner has accepted his application. However, non-petitioner No. 4 expressed his inability to rely on his verbal statement and asked him to produce the order of the Chief Commissioner before March 25, 1991, failing which he will proceed to finalise the penalty proceedings.

(3.) IT may further be pointed out that circular dated February 17, 1986, published at [1986] 158 ITR (St.) 135, was issued to clarify certain doubts about the amnesty scheme. Questions Nos. 4 and 5 and answers thereto in the said circular, clarifying the position regarding penalty and prosecution, are as under :