TARUN AGARWALA, SATISH CHANDRA, JJ. - (1.) THE petitioner is engaged in the business of liquor, share from funds and earning income from plying mini trucks. For the assessment year 2001 -02, the petitioner filed his return of income declaring his income at Rs.97,20,328/ -. In this income, the petitioner disclosed an income from business from trading and country liquor and also disclosed an income of Rs.22,55,800/ - from long term capital gains arising out of the sales of shares. On this capital gains, the petitioner also deposited the tax @ 10% on the income of Rs.22,55,800/ -. Similarly, for the assessment year 2002 -03, the petitioner declared his income at Rs.40,49,093/ - which also included long term capital gains arising out of sales of shares of Rs.40,40,600/ - in which the petitioner deposited the tax @ 10%.
(2.) DURING the course of assessment proceedings, the assessing officer required the assessee to furnish various details of the share transaction and also to prove its genuineness. The assessing officer, upon examining the matter, found that no purchase and sale of shares ever took place in the assessment year 2001 -2002 or in the assessment year 2002 -03. Consequently, the assessing officer made an addition of Rs.24,80,358/ - for the assessment year 2001 -02 and Rs.40,90,600/ - for the assessment year 2002 -03 as undisclosed income and imposed tax @ 30% on such amount. Subsequently, the petitioner filed a settlement application under Section 245 -C(1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") before the Settlement Commission for the aforesaid two assessment years. The Settlement Commission computed the total income of the petitioner for the assessment year 2001 -02 at Rs.97,89,530/ - and for the assessment year 2002 -03 at Rs.41,83,494/ -. The Commission found that since the petitioner had committed a default and did not truly disclose his income, the penalty could not be waived. The Commission held, that since the default had been established, the petitioner could not go scot -free with complete waiver of penalty under Section 271(1)(c) of the Act. The Commission accordingly calculated the minimum penalty under Section 271(1)(c) of the Act at Rs.7,91,785/ - for the assessment year 2001 -02 and Rs.12,35,699/ - for the assessment year 2002 -03.
(3.) THE Commission, however, deemed it fit to impose a penalty of 50% of the penalty so computed and accordingly levied a penalty of Rs.3,95,000/ - and Rs.6,10,000/ - for the assessment years 2001 -02 and 2002 -03 respectively. The petitioner found that the calculation of penalty made by the Commission was not in accordance with the provision of Section 271(1)(c) of the Act read with explanation 4(c) and accordingly filed an application for rectification of the mistake before the Settlement Commission, praying that the Commission may rectify the mistake in calculating the minimum penalty amount. The Settlement Commission dismissed the rectification application. The petitioner, being aggrieved by the orders of the Settlement Commission as well as the consequential orders passed by the assessing officer, has filed the writ petition praying for the quashing of the orders.;