Gujarat High Court
Shantaben R. Choksi (Decd.) Through ... vs Commissioner Of Income Tax on 1 July, 2004
Equivalent citations: (2004)190CTR(GUJ)491, [2005]272ITR295(GUJ)
Author: M.S. Shah
Bench: M.S. Shah
JUDGMENT D.A. Mehta, J.
1. This petition under Article 226 of the Constitution of India challenges the order passed by the respondent on 11th March, 1991 rejecting the application for waiver made by the petitioner under Section 273A(1) of the IT Act, 1961 (the Act) for asst. yrs. 1986--87 and 1987-88.
2. The brief facts necessary for the purpose of disposal of this petition are that:
On 27th May, 1986, the Officers of the Enforcement Directorate conducted search at the residential premises of Shri Hemant S. Shah (son-in-law of the petitioner). Smt. Jayshri H. Shah (daughter of the petitioner) and Smt. Shantaben R. Chokshi (the petitioner). As the petitioner Smt. Shantaben R. Chokshi has since expired, the legal heirs have been brought on record with the permission of the Court and the deceased petitioner is now represented by petitioner Nos. 1A to 1C.
3. It is an admitted position that from the premises of Hemant S. Shah Rs. 15,93,600 in Indian currency, US $ 9,530 and 100 cents of Canadian currencies were seized along with National Savings Certificate valuing Rs. 2,20,000. Simultaneously bank locker standing in the joint names of the deceased petitioner and her daughter with State Bank of India, Raipur Branch, Ahmedabad, was also searched by the Enforcement Directorate and the cash of Rs. 17,90,000 was seized. The amount of cash of Rs. 17,90,000 seized from locker No. 189 was subsequently requisitioned and seized by the IT Department under Section 132A of the Act.
4. On 29th May, 1986, the deceased petitioner as legal heir of Dr. Rasiklal Chokshi (her pre-deceased husband) filed a petition disclosing income of Rs. 8,00,000 for each of the asst. yrs. 1980-81 to 1985-86. Between 1st Aug., 1986 and 8th Aug., 1986, the officers of the IT Department searched bank lockers standing in the name of the deceased petitioner-jointly with other persons and seized jewellery ornaments and silver utensils.
4.1 The deceased petitioner filed a disclosure petition on 30th Sept., 1986 disclosing income of Rs. 47,45,746 as legal heir of late Dr. Rasiklal Chokshi and such disclosure was pertaining to asst. yr. 1986-87. The disclosure was intended to cover most of the assets and ornaments found during the course of search by the Enforcement Directorate.
4.2 The deceased petitioner filed another disclosure petition on 11th March, 1987 stating that the assets had been received by her on the death of her late husband and benefit of the amnesty scheme be made available for asst. yr. 1986-87 in relation to the return of income already filed. Alternatively, the petitioner took a stand that in case the aforesaid petition was not acceptable to the Department, she was prepared to include the said assets in her hands for asst. yr. 1987-88. Another petition came to be filed on the same line on 24th March, 1987.
5. The deceased petitioner filed return of income for asst. yr. 1986-87 on 30th March, 1987 returning income of Rs. 40,000 and on 27th July, 1987 the deceased petitioner filed return of income for asst. yr. 1987-88 showing total income of Rs. 47,48,790 in her hands and the said return included the income of Rs. 47,45,746 which was disclosed in the petition dt. 30th Sept., 1986 in the case of her late husband for asst. yr. 1986-87.
6. For asst. yr. 1986-87, the petitioner was assessed on a total income of Rs. 3,94,000 on 29th March, 1989. On the same day, i.e., 29th March, 1989, the assessment for asst. yr. 1987-88 was completed on total income of Rs. 51,34,730 against the returned income of Rs. 48,48,790. In the assessment order proceedings for levy of penalty and charging of interest were initiated by the AO. The deceased petitioner carried the matter in appeal for asst. yr. 1987-88 and by order dt. 27th Dec., 1989, CIT(A)-IV, Ahmedabad allowed the appeal deleting the additions made and accepting the returned income. Interest levied under Section 217(1A) of the Act was also deleted.
6.1 The Revenue preferred second appeal before the. Tribunal and the said appeal came to be dismissed by the Tribunal, Bench 'A', Ahmedabad vide order dt. 22nd Jan., 2001.
7. It appears that in the meantime on 6th July, 1989, the deceased petitioner filed waiver petition for asst. yrs. 1986-87 and 1987-88 under Section 273A(1) of the Act. The CIT, Gujarat III, Ahmedabad-respondent herein, rejected the said petition by order dt. 11th March, 1991 and the said order is challenged in the present petition only for asst. yr. 1987-88.
8. Mr. K.H. Kaji, learned senior advocate appearing on behalf of the petitioner submitted that the petitioner has by affidavit dt. 25th July, 2002 placed on record details of certain events that have happened subsequently and orders that have been passed subsequent to the filing of the petition on 3rd May, 1991. Inviting attention to the order of the Tribunal, Ahmedabad Bench 'B', Ahmedabad, in case of the deceased petitioner for asst. yr. 1986-87, it was submitted that the Tribunal had accepted the stand of the petitioner that the petitioner had filed return for the said assessment years voluntarily and the case deserved to be considered as one filed under the amnesty scheme on the basis of relevant Board circular referred to in para No. 5 of order dt. 27th Sept., 1993. Mr. Kaji emphasised the finding of the Tribunal to the effect that the presence of two Inspectors of the IT Department at the time of search conducted by the Enforcement Directorate at the residence of son-in-law of the deceased petitioner cannot be considered as detection of any concealed income by the IT Department. The Tribunal for the reasons stated in its order of 27th Sept., 1993 remitted the matter to the file of AO with a direction to consider the application for waiver of interest charged under Sections 139 and 217 of the Act in accordance with law and in light of various circulars of the Board.
8.1 Mr. Kaji further invited attention to order dt. 8th Dec., 1993 wherein the AO while giving effect to the order of the Tribunal for asst. yr. 1986-87 has waived interest under Sections 139 and 217 of the Act on the basis of facts discussed in the order of the Tribunal and Circular No. 441 dt. 15th Nov., 1985 published by the CBDT.
8.2 Similarly for the said assessment year, i.e., asst. yr. 1986-87 Mr. Kaji referred to order dt. 5th Dec., 1994 passed by the Dy. CIT(A), Range, IV, Ahmedabad cancelling the penalty levied under Section 271(1)(c) of the Act in light of the order of the Tribunal as well as the aforesaid Circular No. 441.
8.3 In light of the aforesaid orders of the Tribunal, the appellate authority and the AO for asst. yr. 1986-87 Mr. Kaji assailed the findings recorded by the respondent that the petitioner had not voluntarily disclosed income, and that the disclosure was not in good faith. It was submitted that all the findings recorded by the CIT were bad in law and the consequential rejection of the waiver application for asst. yr. 1987-88 was unwarranted in the facts and circumstances of the case.
9. Mr. M.R. Bhatt, learned senior standing counsel appearing on behalf of the respondent submitted that when the Officers of the Enforcement Directorate conducted search on 27th May, 1986, two inspectors of the IT Department were present and it was subsequent to such action that the deceased petitioner for the first time filed disclosure petition in the name of her late husband on 29th May, 1986. It was, therefore, submitted that the order made by the respondent was perfectly justified on facts and circumstances of the case and no case was made out by the petitioner for interfering with the same.
10. In light of the subsequent events which have come on record by way of further affidavit dt. 25th July, 2002, it is apparent that for asst. yr. 1986-87, the case of the petitioner has been accepted by the IT Department, viz., the return of income filed for the said assessment year has been held to have been filed voluntarily and the case of the petitioner was governed by the provisions of the amnesty scheme. That in light of the circulars issued by the CBDT from time to time interest levied under Sections 139(1) and 217 of the Act as well as penalty under Section 271(1)(c) of the Act have been deleted and cancelled respectively on the basis of return being filed voluntarily and that the petitioner's case is fulfilling the requisite requirements of the amnesty scheme. It is an admitted fact that for asst. yr. 1987-88, to which the present petition relates, same set of facts and circumstances prevailed as were applicable for asst. yr. 1986-87, the only difference being that the amnesty scheme would not be applicable for asst. yr. 1987-88 as the period was over and, hence, the requirement of waiver application for the said assessment year. It is further necessary to note that for asst. yr. 1987-88, the order of CIT(A) upholding the returned income in case of the petitioner and deleting the additions made has been upheld and confirmed by the Tribunal while dismissing the appeals filed by the Revenue.
11. In the aforesaid facts and circumstances of the case, it would be in the interest of justice if the impugned order dt. 11th March, 1991 passed by the respondent is quashed and set aside and the matter is remanded to the respondent for deciding the same on merits after taking into consideration the subsequent developments. Accordingly, order under Section 273A(1) of the Act dt. 11th March, 1991 passed by the CIT, Gujarat III, Ahmedabad, is hereby quashed and set aside and the waiver application filed by the petitioner for asst. yr. 1987-88 shall now be heard and decided by the CIT on merits after giving necessary opportunity to the petitioner. The petition is allowed to the aforesaid extent. Rule is made absolute with no order as to costs.