Shri Bansi Dhar V. Deputy Commissioner of Income Tax, Range-I, Ludhiana and another

CWP/369/1996

AI Insights

The case involves Shri Bansi Dhar, a partner in M/s Ram Lal Kesar Dass, who sought judicial relief against the Deputy Commissioner of Income Tax for not adjusting advance tax against seized cash, unlike his partner and the firm. During a search in 1986, Rs. 21 lacs was seized, and while the firm and one partner had their advance tax adjusted against this amount, the petitioner faced a demand for interest due to non-adjustment. The court found inconsistencies in the treatment of the petitioner compared to his partner and the firm, leading to the setting aside of the previous order and remitting the case for a fresh decision.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 795272 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 14-10-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Income Tax Rules, 1962
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: RAJESH KATOCH
• Assessee Lawyers: ALOK MITTAL
• Keywords: Interest Waiver; Quashing order; Seized cash; Writ of Certiorari; Writ of Mandamus; Advance tax adjustment
• Section: 215; 217; 138(8)

Judgement Text

"CWP-369-1996 [ 1 ] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP -369-1996 Date of decision: 14.10.2014 Shri Bansi Dhar c/o M/s Ram Lal Kesar Dass, Ludhiana ..... Petitioner VERSUS Deputy Commissioner of Income Tax, Range-I, Ludhiana and another ..... Respondents CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE AMIT RAWAL Present: Mr.Alok Mittal, Advocate, for the petitioner. Mr.Rajesh Katoch, Advocate, for the respondents. ******* RAJIVE BHALLA, J. (ORAL) The petitioner prays for issuance of a writ of certiorari, quashing order dated 14.12.1994 (Annexure P-9), passed by the Deputy Commissioner of Income-tax, Range-I, Ludhiana, and a writ of mandamus directing the respondents to waive interest etc. Counsel for the petitioner submits that during a search, on 04.11.1986, at the business premises of M/s Ram Lal Kesar Dass of which the petitioner and one Sh.Kesar Dass were partners, cash amounting to Rs.21 lacs was seized by the Income Tax Department. The firm surrendered Rs.31 lacs as additional income for the assessment year 1987-88. A letter was written on 05.01.1987 to the Income Tax Officer, Ludhiana, with a request that tax payable on the basis of estimate of advance tax be adjusted out of the seized cash of CWP-369-1996 [ 2 ] Rs.21 lacs. The Income Tax Department made adjustments in the case of M/s Ram Lal Kesar Dass and in case of Sh.Kesar Dass before 31.03.1987, but in the case of the petitioner, did not make an adjustment and in fact raised a demand for imposing interest. On 21.08.1989, the petitioner addressed a letter to respondent No.2 not to adjust the tax demand of Rs.2,35,847/- towards interest levied under Sections 215/217/138(8) of the Income Tax Act, 1961 as the petitioner had already requested the department to adjust the tax demand of Rs.7,86,245/- against Rs.21 lacs seized from M/s Ram Lal Kesar Dass. The petitioner also filed a petition under Rule 40 of the Income Tax Rules, 1962 on 07.09.1989, praying for waiver of interest but no order was passed and Rs.8,89,089/- was adjusted by the Income Tax Department out of the seized amount of Rs.21 lacs on 10.01.1990. The petitioner thereafter filed another petition on 06.03.1994 which was rejected on 14.12.1994. Counsel for the petitioner submits that in the case of the firm and the petitioner's partner Sh.Kesar Dass, the advance tax has been adjusted against the amount recovered from the firm but in the case of the petitioner such a course has not been adopted and instead interest has been imposed. The respondents were, therefore, duty bound to have adopted the course adopted in the case of the petitioner's partner and the firm, but for reasons, that are not discernible from the impugned order or the reply, relief has been CWP-369-1996 [ 3 ] denied to the petitioner. Counsel for the revenue submits that interest imposed upon the petitioner is legal and valid and as advance tax was not paid by the petitioner in accordance with his statutory obligation, the refusal to adjust the advance tax against the amount recovered from the firm and the order levying interest are legal and valid. We have heard counsel for the parties, perused the paper book as well as the impugned order. The Income Tax Department seized Rs.21 lacs from M/s Ram Lal Kesar Dass, of which the petitioner and one Sh.Kesar Dass were partners. The revenue adjusted this amount against advance tax payable by the firm and Sh.Kesar Dass and did not levy any interest but in the case of the petitioner has not allowed this adjustment and levied interest. A perusal of the impugned order reveals that no credible reason has been assigned for rejecting the petitioner's prayer for adjustment or for treating him differently. The petitioner's application has been rejected by referring to irrelevant provisions and facts that were not germane to the controversy in hand and without considering whether benefit granted to the firm and Sh.Kesar Dass should also be granted to the petitioner by adjusting the amount towards advance tax. Consequently, the writ petition is allowed, order dated 14.12.1994 (Annexure P-9), is set aside and the matter is remitted to the assessing officer, seized of the matter, to take a decision afresh CWP-369-1996 [ 4 ] after affording an opportunity of hearing and taking into consideration orders passed in the cases of M/s Ram Lal Kesar Dass and Sh.Kesar Dass. [ RAJIVE BHALLA ] JUDGE 14.10.2014 [ AMIT RAWAL ] Shamsher S.Sabharwal JUDGE SHAMSHER SINGH 2014.10.27 12:42 I attest to the accuracy and authenticity of this document Chandigarh "