M/S Swaraj Yarn Agency v. The Commissioner Of Income Tax And Others

Civil Writ Petition No.3085of 1994 **** IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH Civil Writ Petition No.3085of 1994Date of decision: 20.4.2011 M/s Swaraj Yarn Agency ...Petitioner Versus The Commissioner of Income Tax and others ...Respondents and another connected petition beingCivil Writ Petition No.825 of 1995. CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Mr. R.C.Setia, Senior Advocate with Mr.Anish Setia, Advocate for the petitioner (in CWP No.3085 of 1994). (in CWP No.3085 of 1994). Mr. B.B.S.Sobti, Advocate for the petitioner (in CWP No.825 of 1995). Mr. Rajesh Katoch, Senhior Standing Counsel for respondents No.1 and 2. ADARSH KUMAR GOEL, J. 1.This order will dispose of Civil Writ Petitions No.3085 of 1994 and 825 of 1995 as learned counsel for the parties have stated that boththe petitions involve common question of liability of the assessee to paytax again if tax already paid to the bank is misappropriated by theemployees of the approved bank with whom the amount is deposited.2.In Civil Writ Petition No.3085 of 1994, case of the petitioner isthat for the assessment year 1993-94 it deposited advance tax videincome tax challan receipt dated 14.9.1992 Annexure P-2. Thereafter, asurvey was conducted during which the petitioner surrendered further taxable income and demand of tax raised against it. The said demand wasmet by depositing the amount with the State Bank of Patiala, Ludhiana videincome tax challan receipt dated 28.10.1993 Annexure P-3. The petitioneralso deposited further amount of tax vide receipts dated 14.12.1992 and11.3.1993 Annexures P-4 and P-5 respectively. Thus, though thepetitioner paid the tax due, the department raised a fresh demand withouttaking into consideration the tax already paid. As per newspaper reportdated 22.12.1993, it was learnt that a fraud had been committed in thebank and the amount of tax deposited had been misappropriated. Thepetitioner accordingly wrote letter dated 25.1.1994 Annexure P-7 to thedepartment intimating that deposit of tax had already been made and if theamount had been misappropriated by the bank, the petitioner could not berequired to deposit the same again. In reply to the letter of the petitioner,the stand taken by the department vide letter dated 25.1.1994 Annexure P-8 was that payments claimed to have been made by the petitioner had notbeen credited to the Central Government account. 3.Case of the petitioner is that once it had made the deposit andproduced the receipts of the bank, mere fact that bank did not credit thepayments to the Central Government account cannot be a ground torecover the tax again from the petitioner. Payment by the petitioner to thebank amounts to discharge of its liability. 4.In the reply filed to the petition, stand taken by the departmentis that the counter foils of challans showing payments to the bank were notgenuine as stated by the bank. In the reply filed by the bank, it has beenstated that the receipts are ingenuine, forged and fabricated as thesignatures on the receipts are not the signature of any officer or employeeof the bank. 6.Learned counsel for the petitioner submits that the receiptsproduced by the petitioner are duly stamped and signed by the officials ofthe bank and the bank had also suspended its Head Cashier. In suchcircumstances, mere statement by the bank that the receipts did not bearthe signatures of the officials of the bank cannot be accepted as conclusivewithout an independent enquiry. This contention has merit and there noreason has been shown by learned counsel for the department to rejectthis submission. 6.Learned counsel for the petitioner submits that the receiptsproduced by the petitioner are duly stamped and signed by the officials ofthe bank and the bank had also suspended its Head Cashier. In suchcircumstances, mere statement by the bank that the receipts did not bearthe signatures of the officials of the bank cannot be accepted as conclusivewithout an independent enquiry. This contention has merit and there noreason has been shown by learned counsel for the department to rejectthis submission. 7.In view of above, we dispose of both these petitions bydirecting that the Income Tax Department may conduct an independentenquiry into the matter to ascertain whether the receipts produced by thepetitioners are genuine. It is made clear that if the receipts are genuineand it is found that petitioners have made the deposit with the bank, suchdeposit will be treated to be discharge of the liability of the petitioner even ifbank has failed to credit the payments to the Central Government Account.However, if the receipts are not genuine, the department will be at liberty torecover the amount from the assessees. 8.A photocopy of this order be placed on the file of theconnected case. (Adarsh Kumar Goel) Judge April 20, 2011Pka (Ajay Kumar Mittal) Judge Civil Writ Petition No.3085of 1994 **** -4-