Kerala High Court
K.M. Rajan, Rajan And Company vs Commissioner Of Income-Tax And Ors. on 18 June, 1990
Equivalent citations: [1990]186ITR376(KER)
Author: K.S. Paripoornan
Bench: K.S. Paripoornan
JUDGMENT D.J. Jagannadha Raju, J.
1. This writ appeal is filed by the unsuccessful petitioner in Original Petition No. 4181 of 1989-W. By judgment dated May 25, 1989, K.M. Rajan, Rajan and Co. v. CIT [1989] 180 ITR 228 (Ker), the learned single judge, Sukumaran J., dismissed the original petition filed for granting a writ of certiorari to quash exhibits P-1, P-3 and P-4.
2. In this appeal, Shri E. R. Venkiteswaran strongly contended that, in view of the assessee filing a fresh return admitting a total income of Rs. 2,50,000 soon after the survey was conducted at his house, there is no justification for levying interest and penalty. He places strong reliance upon the judgment dated February 6, 1990, by a Division Bench of this court in W. A. Nos. 102, 103, 109, 119, 120, 121, 126, 127 and 136 of 1989 (A.V. Joy, Alukkas Jewellery v. CIT [1990] 185 ITR 638), and contends that this is a case where there is voluntary disclosure and hence there is no justification for imposing the penalty and for imposing the interest.
3. On behalf of the Revenue, senior standing counsel, Shri P.K. Ravindranatha Menon, contends that the petitioner is not entitled to any relief in this case because this is not a case of voluntary disclosure. In fact, in the original petition itself, the petitioner has categorically stated that, as a result of the survey conducted in the premises of the assessee on February 6, 1985, certain defects and discrepancies in the accounts were noticed and the petitioner claims that he was forced to file a revised return admitting a total income of Rs. 2,50,000 for the assessment year 1982-83. Shri Ravindranatha Menon lays emphasis on ground A in the original petition which reads as follows :
". . . The revised return was furnished only on account of the fact that there was a survey conducted at the premises ..."
4. He also lays emphasis upon the following sentence in paragraph 1 of the statement of facts in the original petition :
"... As a result of the survey certain defects and discrepancies in the accounts were noticed by the officials ... on account of the pressure exerted by the survey party, the petitioner was forced to file a revised return admitting a total income of Rs. 2,50,000 ..."
5. Shri Menon contends that the wording in the original petition itself rules out the possibility of the assessee filing the revised return voluntarily immediately after the search or survey. On facts, this case stands on a footing totally different from the decision relied upon by the appellant's counsel and the Division Bench decision of this court in W. A. No. 102 of 1989 and other connected cases deal with a totally different situation where a voluntary disclosure was made by the assessee. He also contends that Explanation 2 to Section 273A of the Income-tax Act which was in force for the limited period from October 1, 1984, to May 24, 1985, is not applicable to the present case. The benefit of the deeming provision is not available to the appellant. Shri Menon also contends that, for the assessment year 1982-83, the appellant originally filed a return on January 17, 1983, declaring a loss of Rs. 4,976. Then, after a survey was conducted at his premises on February 6, 1985, he filed the revised return showing a total income of Rs. 2,50,000. He filed the revised return on February 19, 1985. Even according to his own version, he filed the revised return as he was forced to do it as a result of various defects and discrepancies having been discovered. There is no element of voluntary disclosure.
6. The only point for consideration in this appeal is whether the petitioner-appellant is entitled to invoke the benefit of Explanation 2 to Section 273A of the Income-tax Act and claim that he has made a full and true disclosure of his income voluntarily within fifteen days from the date of the search or survey.
7. The point : As can be seen from the averments in the original petition itself, it is quite clear that the appellant-petitioner first filed a return on January 17, 1983, declaring a loss of Rs. 4,976. Subsequently, when the survey revealed various defects and discrepancies in the accounts, he claims that he was forced by the officials to file a revised return admitting a total income of Rs. 2,50,000. The averments in the original petition referred to hereinabove rule out the possibility of his making any voluntary disclosure of true and correct facts. The same averments are asserted in ground A of the original petition. He claims that the revised return was furnished only on account of the fact that there was a survey conducted at his premises. This clearly indicates that he never had any intention to make a voluntary disclosure. It is more interesting to see that, even in this writ appeal, he reiterates the same stand and claims that he was forced to file a revised return due to the pressure exerted by the survey party. There is absolutely no question of his making a full and true disclosure of his income voluntarily. Explanation 2 to Section 273A runs thus :
"Explanation 2.--Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing belonging to a person are seized under Section 132 and within fifteen days of such seizure, the person makes a full and true disclosure of his income to the Commissioner, such person shall, for the purposes of Clause (b) of this sub-section, be deemed to have made, prior to the detection by the Income-tax Officer of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, a disclosure of such particulars."
8. The emphasis in this Explanation is on the following groups of words ;
"(1) within fifteen days of such seizure.
(2) the person makes a full and true disclosure of his income to the Commissioner.
(3) be deemed to have made, prior to the detection by the Income-tax Officer, (4) voluntarily and in good faith, a disclosure of such particulars."
9. From the very averments in the original petition and in the writ appeal, the element of voluntary disclosure and a true and full disclosure are ruled out. The petitioner is not entitled to plead the benefit of Explanation 2 to Section 273A. The situation which a Division Bench of this court was dealing with in the judgment dated February 6, 1990, is totally different from the one with which we are concerned in this writ appeal. That judgment is totally distinguishable.
10. The learned single judge, in paragraph 7 of his judgment, postulated the question whether the conditions for waiver are satisfied in this case and he came to the conclusion that it is for the fact-finding authorities to determine that question and it is not for this court to interfere with the finding of fact recorded by the statutory authorities. Considering the facts of this case, it is quite clear that the petitioner is not entitled to any relief. The imposition of penalty and interest are perfectly justified. This is a clear case where the party never made any voluntary disclosure ; on the other hand, it did everything to suppress the real situation and the real income. On his own admission, the petitioner was forced to file the revised return. There is no question of any voluntary disclosure. There are no merits in this writ appeal. The appellant is not entitled to any relief at the hands of this court, under Article 226 of the Constitution of India.
11. In the result, the writ appeal is dismissed with costs.