Ghuna Ram and Sons V. Commissioner of Income Tax, Patiala and another

CWP/163/1999

AI Insights

The case involves M/s Ghuna Ram and Sons, a firm engaged in the sale and purchase of fertilizers, which filed a writ petition under Article 226 of the Constitution against the Commissioner of Income Tax, Patiala. The petitioner challenged an order under section 264 of the Income Tax Act, 1961, which rejected their plea for the deletion of an addition made on account of unaccounted cash and for credit of an amount of Rs.5,90,000 disclosed under an Amnesty scheme for the assessment years 1976-77 and 1977-78. The petitioner argued that the amount was available in their books during the assessment year 1983-84, contrary to the CIT's findings. The court agreed with the petitioner, noting inconsistencies in the CIT's consideration of the disclosed amount across different assessment years, and remanded the case for a fresh decision.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 796310 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 09-01-2012
• Assessment Year: misc
• Other Referred Cases: Income Tax Case No.35 of 1999
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SAVITA SAXENA
• Assessee Lawyers: S K MUKHI
• Keywords: Amnesty Scheme; Concealment of income; Remand; Unaccounted cash
• Section: 143(3); 271(1)(c); 264

Judgement Text

" CWP No.163 of 1999 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. CWP No.163 of 1999 Date of decision: 09.01.2012 M/s Ghuna Ram and Sons, New Grain Market, Patiala -----Petitioner Vs. Commissioner of Income Tax, Patiala and another ----Respondents CORAM:- HON'BLE MR JUSTICE M.M.KUMAR HON’BLE MR. JUSTICE AJAY KUMAR MITTAL 1. To be referred to the Reporters or not? 2. Whether the judgment should be reported in the Digest? Present:- Mr. S.K.Mukhi, Advocate for the petitioner. Ms. Savita Saxena, Advocate for the respondents. Ajay Kumar Mittal,J. 1. The petitioner-assessee has approached this Court under Article 226 of the Constitution of India impugning order dated 27.3.1997, Annexure P.5 passed by the Commissioner of Income Tax, Patiala (in short, “the CIT”) under section 264 of the Income Tax Act, 1961 (in short, “the Act”). 2. Briefly, the facts as narrated in the petition may be noticed. The petitioner firm is carrying on business of sale and purchase of fertilizers at Patiala. It filed its return declaring income for the assessment year 1983-84 and the assessment was completed under section 143(3) of the Act on 27.3.1986. The petitioner had 1 CWP No.163 of 1999 disclosed an amount of Rs.5,90,000/- under the Amnesty scheme for the assessment year 1976-77 and 1977-78 and had prayed for deletion of addition on account of unaccounted cash and for credit of this amount. The penalty proceedings under section 271 (1) (c ) of the Act were initiated for concealment of income. 3. The petitioner filed a petition under Section 264 of the Act before respondent No.1 with the averments that it had surrendered an amount of Rs.5,90,000/- for the assessment year 1976-77 and 1977-78 and the said amount remained invested in the business from the said date and was available even during the assessment year in question as well i.e. 1983-84. The petition under Section 264 of the Act having been rejected by respondent No.1, the petitioner has approached this Court by way of present petition. 4. According to the learned counsel, the amount of Rs.5,90,000/- disclosed under Amnesty Scheme for the assessment years 1976-77 and 1977-78 was held to be available during the assessment year 1982-83 as well as subsequent assessment year 1984- 85 and in such a situation, it would be contradictory to hold that the amount of Rs.5,90,000/- was not available for the assessment year 1983-84. 5. Opposing the prayer made by learned counsel for the petitioner, learned counsel for the revenue supported the order passed by respondent No.1. 6. After giving thoughtful consideration to the respective submissions, we are of the view that respondent No.1 was not justified in rejecting the prayer. It was not disputed that in the proceedings relating to assessment year 1982-83 wherein the assessee 2 CWP No.163 of 1999 had claimed that the amount of Rs.5,90,000/- which had been declared under the Amnesty scheme relating to assessment years 1976-77 and 1977-78, was available in its books of account. The said amount was also held to be available with the petitioner relating to the assessment year 1984-85. It was pointed out that in Income Tax Case No.35 of 1999 relating to assessment year 1984-85, prayer of the revenue seeking directions to the Tribunal to refer question of law claimed by it was declined by this Court. As a necessary corollary, amount of Rs.5,90,000/- had been held available for the assessment year 1984-85. The CIT, however, had failed to examine the matter in the aforesaid background. In such a situation, the order passed by the CIT cannot be sustained. The same is set aside and the matter is remanded to respondent No.1 for passing a fresh order in accordance with law. 7. The petition is disposed of. (Ajay Kumar Mittal) Judge January 09, 2012 (M.M.Kumar) ‘gs’ Judge 3 "