CWP 1215of 2007

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT

CHANDIGARH

CWP No. 1215 of 2007

Date of decision 15.3 .2007

Shashi Pal Mehra

.. petitioner

Versus

Union of India and another

.. Respondents

CORAM:

HON'BLE MR. JUSTICE M.M. KUMAR

HON'BLE MR. JUSTICE RAJESH BINDAL

PRESENT: Mr. SK Mukhi, Advocate for the petitioner

M.M.Kumar, J.

This petition filed under Article 226 of the Constitution is

directed against the order dated 13.9.2005 passed by the Commissioner of

Income Tax II Amritsar in respect of the assessment year 1998-99 denying

the petitioner the waiver of penalty imposed under Section 271(1)(c) of the

Income Tax Act,1961 (for brevity 'the Act') which has been sought by him

under Section 273(A) of the Act.

Brief facts of the case may first be noticed.

There is an assessee with the name of Shashi Pal Mehra who

claims to be a successful businessman and partner in many concerns with

turn of over crores. He also claims that his father who was associated with

various social and welfare activities and also associated as a financial

controller of various charitable trusts, died on 24.9.2002 and he alongwith

his brother Mr. Ravinder Pal Mehra inherited and divided amongst

themselves various items of gold jewellery and cash. Both of them declared

those items to the Income Tax department under the Voluntary Disclosure

Income Scheme of 1997 (for brevity 'the VDIS 1997'). He filed his income

tax return under Section 139(1) of the Act for the assessment year 1998-99

CWP 1215of 2007

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on 31.3.1999 ( Annexure P.3) in which he declared his income at

Rs.4,21,440/-. The return was processed under Section 143(1)(a) of the Act.

No revised return within the stipulated period of one year, which expired on

31.3.2000, was filed. Alongwith return, copies of bank accounts, statements

and several other documents were attached indicating that the petitioner-

assessee had disclosed on 31.12.1997 in VDIS 1997 jewellery and cash

valued at Rs. 21,53,810/-. In the disclosure statement made by the assessee

it was stated to be concealed income pertaining to the various assessment

years 1977-78, 1985-86, 1986-87 and 1992-93 to 1996 -97. The cash

components out of income disclosed under VDIS amounting to

Rs.9,50,000/- was deposited in assessee's bank account. The assessee

petitioner had also attached copy of account as partner in the firm M/s

A.G.Exports from which cash receipts were shown at Rs. 16,98,000/- and

share profit was shown at Rs. 3,37,941/- which was claimed as exempt. The

assessee- petitioner has claimed that an amount of Rs. 35,00,000/- was

found in the almiraha of his deceased father who spent last days of his life

at Haridwar. On the advice given by the Chartered Account Shri Vivek

Kapur, he had invested the afore-mentioned amount in the firm M/s A.G.

Exports instead of voluntarily declaring the same in VDIS 1997. On account

of some search and seizure made at Yamunanagar on 12.10.2001 by the

Income Tax Department against Shri Mohan Lal Arya and Sons Group a

number of copies of several partnership deeds and final accounts of some

firms based at Amritsar were seized. On the legal advice of their consultants

various businessmen settled at Amritsar approached the Settlement

Commission. The petitioner also consulted his Chartered Accountant Shri

Vivek Kapur who asked him to surrender his income and accordingly

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revised return was filed on 27.3.2002 by including the additional income

of Rs. 17,50,000/- as share of profit from fictitious partnership firm M/s

A.G. Exports. On 3.4.2002 a notice dated 3.4.2002 under Section 148 of the

Act (Annexure P.8) was issued to the petitioner. The petitioner in nut-shell

claimed that filing of revised return on 27.3.2002 was a voluntary act on his

part whereas the department in the impugned order claimed that the revised

return could have been filed on or before 31.3.2002 before the period of

one year