Shri Bansi Dhar v. Deputy Commissioner Of Incometax, Range-I, Ludhiana And Another

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH CWPa369,1996Date of decision: 14.10.2014 Shri Bansi Dhar c/o M/s Ram LalKesar Dass, Ludhiana ..... Petitioner VERSUS Deputy Commissioner of IncomeTax, Range-I, Ludhiana and another .... Respondents CORAMHON8BLE MR. JUSTICE RAJIVE BHALLAHON8BLE MR. JUSTICE AMIT RAWAL Present#Mr.Alok Mittal, Advocate, for the petitioner.Mr.Rajesh Katoch, Advocate, for the respondents,KOK oK RAJIVE BHALLA, J. (ORAL) The petitioner prays for issuance of a writ of certiorari,quashing order dated 14.12.1994 (Annexure P-9), passed by theDeputy Commissioner of Income-tax, Range-I, Ludhiana, and a writof mandamus directing the respondents to waive interest etc. Counsel for the petitioner submits that during a search,on 04.11.1986, at the business premises of M/s Ram Lal Kesar Dassof which the petitioner and one Sh.Kesar Dass were partners, cashamounting to Rs.21 lacs was seized by the Income Tax Department,The firm surrendered Rs.31 lacs as additional income for theassessment year 1987-88. A letter was written on 05.01.1987 to theIncome Tax Officer, Ludhiana, with a request that tax payable on thebasis of estimate of advance tax be adjusted out of the seized cash of Rs.21 lacs. The Income Tax Department made adjustments in thecase of M/s Ram Lal Kesar Dass and 1n case of Sh. Kesar Dass befor31.03.1987, but in the case of the petitioner, did not make anadjustment and in fact raised a demand for imposing interest. On21.08.1989, the petitioner addressed a letter to respondent No.2 notto adjust the tax demand of Rs.2,35,847/- towards interest leviedunder Sections 215/217/138(8) of the Income Tax Act, 1961 as thepetitioner had already requested the department to adjust the taxdemand of Rs.7,86,245/- against Rs.21 lacs seized from M/s Ram LalKesar Dass. The petitioner also filed a petition under Rule 40 of theIncome Tax Rules, 1962 on 07.09.1989, praying for waiver ofinterest but no order was passed and Rs.8,389,089/- was adjusted bthe Income Tax Department out of the seized amount of Rs.21 lacson 10.01.1990. The petitioner thereafter filed another petition on06.03.1994 which was rejected on 14.12.1994. Counsel for the petitioner submits that in the case of thefirm and the petitioner's partner Sh.Kesar Dass, the advance tax hasbeen adjusted against the amount recovered from the firm but in thecase of the petitioner such a course has not been adopted and insteadinterest has been imposed. The respondents were, therefore, duty;bound to have adopted the course adopted in the case of thepetitioner's partner and the firm, but for reasons, that are notdiscernible from the impugned order or the reply, relief has been denied to the petitioner. Counsel for the revenue submits that interest imposedupon the petitioner is legal and valid and as advance tax was not paidby the petitioner in accordance with his statutory obligation, therefusal to adjust the advance tax against the amount recovered fromthe firm and the order levying interest are legal and valid. We have heard counsel for the parties, perused the paperbook as well as the impugned order. The Income Tax Departmentseized Rs.21 lacs from M/s Ram Lal Kesar Dass, of which thepetitioner and one Sh.Kesar Dass were partners. The revenueadjusted this amount against advance tax payable by the firm andSh.Kesar Dass and did not levy any interest but in the case of thepetitioner has not allowed this adjustment and levied interest. AIperusal of the impugned order reveals that no credible reason hasbeen assigned for rejecting the petitioner's prayer for adjustment orfor treating him differently. The petitioner's application has beenrejected by referring to irrelevant provisions and facts that were notgermane to the controversy in hand and without considering whetherbenefit granted to the firm and Sh.Kesar Dass should also be grantedto the petitioner by adjusting the amount towards advance tax. Consequently, the writ petition is allowed, order dated14.12.1994 (Annexure P-9), is set aside and the matter is remitted tothe assessing officer, seized of the matter, to take a decision airesh CWP3691996 aiter affording an opportunity of hearing and taking intoconsideration orders passed in the cases of M/s Ram Lal Kesar Dassand Sh Kesar Dass. 1410.2014Shamsher S.Sabharwal | RAJIVE BHALLA |JUDGE|} AMIT RAWAL JUDGE