1993 (3) TMI 9 - HC - Income Tax

Summary

Issues Involved:
1. Validity of revised returns filed under the amnesty scheme.
2. Authority and interpretation of the Chief Commissioner's order.
3. Immunity from penalty and prosecution under the amnesty scheme.
4. Maintainability of the writ petition.

Detailed Analysis:

1. Validity of Revised Returns Filed Under the Amnesty Scheme:
The petitioner, a partnership firm engaged in dry cleaning, filed revised returns for the assessment years 1975-76 to 1980-81 under the amnesty scheme after their business premises were surveyed under Section 133A of the Income-tax Act. The Income-tax Officer initially rejected the books of account and applied a net profit rate of 25% on the receipts disclosed by the assessee. However, the Tribunal set aside these assessments, leading to the filing of revised returns under the amnesty scheme, which were accepted by the Income-tax Officer. The petitioner argued that these revised returns should be treated as filed under the amnesty scheme, thereby entitling them to the scheme's benefits, including immunity from penalty and prosecution.

2. Authority and Interpretation of the Chief Commissioner's Order:
The petitioner contended that the Chief Commissioner of Income-tax passed an order on October 27/28, 1988, which confirmed that the petitioner's case was covered under the amnesty scheme and that the benefits of the scheme regarding the levy of interest and penalty were allowed. The Revenue, however, argued that the Chief Commissioner's note was merely an administrative report and not an order. The judgment clarified that the language of the Chief Commissioner's note indicated it was indeed an order, as it directed the Commissioner of Income-tax to take necessary action, thus confirming the petitioner's entitlement to the amnesty scheme benefits.

3. Immunity from Penalty and Prosecution Under the Amnesty Scheme:
The petitioner filed revised returns and paid taxes within the prescribed time under the amnesty scheme, which, according to Circular No. 451 dated February 17, 1986, should grant immunity from penalty and prosecution. The judgment referenced questions and answers from the circular, which confirmed that truthful disclosure and timely payment of taxes under the amnesty scheme ensured immunity from penalty and prosecution. The judgment also cited precedents, including CWT v. Jangi Lal and Chhotabhai Jethabhai Patel and Co. v. CIT, which supported the view that voluntary disclosure under such schemes entitles the assessee to immunity from penalties.

4. Maintainability of the Writ Petition:
The Revenue argued that the writ petition was not maintainable due to the availability of an alternate remedy under Section 246 of the Act. However, the judgment held that the availability of an alternate remedy does not bar the filing of a writ petition, especially given the specific circumstances of the case. The court noted that the order passed by the Commissioner of Income-tax, which was not conveyed to the petitioner, left them with no option to appeal, thereby justifying the maintainability of the writ petition.

Conclusion:
The writ petition was allowed, confirming that the revised returns filed by the petitioner would be treated as filed under the amnesty scheme. The petitioner was entitled to all benefits of the amnesty scheme, including immunity from the imposition of penalties as per Circular No. 451. The non-petitioner No. 4 was prohibited from taking any further proceedings regarding penalties based on the impugned assessment order dated March 25, 1992. The demand notices regarding penalties issued against the petitioner were quashed. The petition was allowed with no order as to costs.