Income Tax Officer, Ward-1(1), Bathinda v. Pardeep Kumar And Another

CRR-1617-2015(O&M) -|- IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. CRR-1617-2015(0&M)Date of decision:-227.5.201 Income Tax Officer, Ward-1(1), Bathinda _.Petitioner Versus Pardeep Kumar and another ...Respondents CORAM:HON'BLE MR.JUSTICE H.S.MADAAN Present:Mr.Dinesh Goyal, Advocatefor the petitioner.Mr.Amit Aggarwal, Advocatefor the respondent No.1, Mr.Saurav Khurana, DAG, Punjab, 7777 H.S. MADAAN, J. Complainant - Income Tax Officer,Ward-1(3), Bathinda hadfiled a complaint under Sections 276 C and 277 read with Section 278 Bof Income Tax Act, 1961 (hereinafter referred to asthe Acf) against M/sSharma Misthan Bhandar and others on the allegations that accused No.1had been drawing considerable income by sale of sweets, meals and othereatables running their business under the name and style of M/s SharmaMisthan Bhandar situated at The Mall, Bathinda; that such concern hadfiled return of income tax for the assessment year 1988-89 at Rs.66,250/- CRR-1617-2015(O&M) -~) on 5.8.1988 duly signed and verified by accused Pardeep Kumar aspartner of the firm; that statement was accompanied by profit and lossaccount and other relevant papers; that accused No.l submitted adeclaration under Section 184(7) of the Act for continuation ofregistration of the firm in form No.12 on 28.6.1988, duly signed andverified by accused Nos.2 and 3; that the Assessing Officer after receipt ofsaid return issued notice under Sections 142(1) and 143(2) of the act on28.10.1988 along with an questionnaire requiring the accused to furnish,inter alia, information regarding the purchase of raw material, details ofopening and closing stock and method of valuation, copies of bankaccount in support of the income returned; that in response to notice dated28.10.1988 accused No.1 through accused No.2 Pardeep Kuamr attendedproceedings and filed reply on 11.11.1988; that on the same day,statement of accused No.2 was also recorded before Assessing Officer;that books of account were partly examined and then Assessing Officerdirected for the supply of further details relating to business, adjourningthe case for 25.11.1988; that on dated 10.3.1989, accused produced RamPartap, Milkman and his statement was recorded; that from the documentsand return and from the evidence adduced by accused, Assessing Officerfound that the accounts were drawn not in accordance with principle ofAccountancy and cursory look over the accounts show lucrative grossprofit rate; that it was further found that the sales were unvouched andaccused have not maintained even day to day stock register for the rawmaterials and for the finished goods and such circumstances were inexistence to enable the accused to evade the tax, penalty chargeable and CRR-1617-2015(O&M) CRR-1617-2015(O&M) imposable under the Act; that from the circumstances, true profits couldnot be deducted from the account books of the accused; that the perusal ofprofit and loss account attached with the return of income revealed thataccused No.| had debited the expenses of Rs.1,25,120/- on account ofdiesel, coal, wood etc. in the profit and loss account, which primarilyrelate to the manutacturing-cum-trading account, accused No.lmaliciously, deliberately did so in order to deflate the real income; that thegross profit shown at 46.47%; that this exercise was undertaken by theaccused to hoodwink the department to apparently show enhanced grossprofit rate; that had the aforesaid expenses are considered in themanufacturing cum trading account, the gross profit rate was in fact workout at 21.5%; that during the assessment year, it was also found that theaccused No.l maintained Cash book and ledger only and no expenditurevouchers and purchase bills were produced; that expenses debited to profitand loss account were not vouched and were not subject to verification;that the books of account were written at whims and fancies of accusedNo.1; that further the accused No.1 debited interest of Rs.5,980/- on theborrowing to the profit and loss account to reduce its profits and it wasfound that the accused No.1 was not in need of funds but accused No.2namely Pardeep Kumar utilized the funds so raised in construction of hishouse; that the accused deliberately did so to evade the tax liability; thatfrom the perusal of the documents annexed with return filed by accusedNo.1, it was also found that accused No.2 withdrawn Rs.4,999/- andaccused No.3 withdrawn Rs.3,583/- for household expenses from thebooks of account maintained by accused No.1, which were considered to CRR-1617-2015(O&M) -4- be grossly inadequate keeping in view the size of the tamily of accusedaccused Nos.2 and 3; that on inquiries,reasons assigned by accused No.2were found untenable. That in fact, accused No.2 and 3 were withdrawingmoney out side the books of account for meeting household expenses,thusaccused No.1 has intentionally drawn false and incorrect accounts toconceal its real income, accordingly proviso of Section 145(1) of the Actinvoked; that keeping in view all the discrepancies in the accounts andfacts emerged out during the proceedings, total income of accused No.1was determined at Rs.2,15,430/- and ordered the initiation of penaltyproceedings under Section 273(2)(a) of the Act; that aggrieved against theorder dated 23.3.1989 passed by Assessing Officer the accused preferredappeal before Commissioner of Income Tax (Appeal), Bathinda, who setaside the order of Assessing Officer vide order dated 15.6.1989, with thedirections to the Assessing Officer to pass fresh order after affordingappropriate opportunity of being heard and confront to the accused withthe material available with the assessing officer; that after receipt of orderof the appellate authority, assessing officer issued notice dated 2.7.1990tot he accused requiring the accused to appear on 11.7.1990; that inresponse to the notice dated 2.7.1990, the accused filed its reply; thatAssessing Officer vide its letter dated 13.7.1990 apprised the accusedabout sales estimated by him and also supplied Xerox copy of statementof accused No.2, recorded in connection with assessment earlier framedon 23.3.1989; that the accused was also informed about the proposedestimation of sales in this letter and also called for information aboutclaim of depreciation by the accused; that accused submitted a reply to CRR-1617-2015(O&M) -5- said letter on 19.7.1990; that after hearing the accused, the AssessingOfficer passed an assessment order dated 31.7.1990 and determinedincome at Rs.2,65,/790/- after making followings in the net profit shown aper profit and loss account by the accused No.1! and also initiated penaltproceedings w/S 271(1) (c) of the Act for concealing particulars of hisincome: CRR-1617-2015(O&M) -5- said letter on 19.7.1990; that after hearing the accused, the AssessingOfficer passed an assessment order dated 31.7.1990 and determinedincome at Rs.2,65,/790/- after making followings in the net profit shown aper profit and loss account by the accused No.1! and also initiated penaltproceedings w/S 271(1) (c) of the Act for concealing particulars of hisincome: That accused again preferred appeal betore the CIT(A)against the order dated 31.7.1990 of the Assessing Officer , who partlyallowed the appeal and confirmed th following additions vide his orderdated 25.4.199]1 Departmental proceedings of assessment in the income tax office had been going on. On a complaint having been filed, accused were summonedand they put in appearance and admitted to bail. During the pre-charge evidence, the complainant examined CRR-1617-2015(O&M) -6- ITO Gopi Chand as CWl, who supported the case of complainant,Raghuvirsain Jain (ITO Retd.) as CW2 and CW3 Rajinder Singh,ITO(QVudicial), Bathinda. During the proceedings, accused Som Dutt haddied, as such proceedings against him stood abated. Regarding remainingaccused, they were charge-sheerted under Section 276-C read withSection 277 & 278(B) of the Act, to which, they pleaded not guilty andclaimed trial. The trial Court had formulated the following points fordetermination, which are as under; 1) Whether accused Pardeep Kumar, is the partner ofaccused No.1 and has willfully attempted to evade thetax, penalty and interest chargeable, imposable underthe Income tax Act?accused No.1 and has willfully attempted to evade thetax, penalty and interest chargeable, imposable underthe Income tax Act? 2) Whether the complainant has been able to prove itcase, as alleged?case, as alleged? After hearing arguments, the trial Court convicted accusedPardeep Kumar for the offences under Sections 276-C, 277 and 278-B ofthe Act and sentenced him thereunder. Aggrieved by this judgment, accused Pardeep Kumar hadpreferred an appeal to the Court of Sessions, which was marked to learnedAdditional Sessions Judge (Fast Track Court), Bathinda, who allowed theappeal and set aside the judgment/order dated 23.9.2011 passed by thetrial Magistrate. Being dissatisfied by the said judgment passed by learned CRR-1617-2015(O&M) -/- Additional Sessions Judge (Fast Track Court), Bathinda, the petitioner hasfiled the present revision petition, notice of which was issued to therespondents, who put in appearance through counsel. I have heard learned counsel for the parties besides goingthrough the record. The law is well settled that the revisional jurisdiction of thisCourt is quite limited. This Court is to interfere only if there is anillegality or infirmity apparent on the face of the judgment/order passedby a Court below or the same is perverse and not otherwise, I do not find any illegality or infirmity with the impugnedorders, which might have called for interference by this Court whileexercising revisional jurisdiction, Finding no merit in the petition, the same stands dismissed.Necessary information be sent to the quarter concerned. 22 52018 Bri (H.S.MADAAN)JUDGE Whether reasoned/speaking :Yes/NoWhether reportableYes/No