Inder Sen Israni, J. - (1.) BRIEFLY stated, a writ petition was filed by the petitioner, which came up for orders on second stay application on May 17, 1991 (see [1991] 192 ITR 487). No reply, as yet, had been filed by the respondents, but with the consent of both the parties, it was finally decided, on the same day. Thereafter, the abovementioned miscellaneous application dated May 23, 1991, was filed, with a prayer to modify the aforesaid order on the grounds mentioned therein. Mr. G.S. Bapna, learned counsel for the respondents, during the course of proceedings, on October 22, 1992, requested that since no reply has been filed on behalf of the Revenue, an opportunity may be given to file a reply to the writ petition, to which learned counsel for the petitioner had no objection. The time for filing the reply was granted from time to time and the reply was filed on March 16, 1993. The order dated May 17, 1991 (see [1991] 192 ITR 487), was recalled and the matter was heard again on March 18, 1993.
(2.) IT is submitted by Mr. Anant Kasliwal, learned counsel, that the petitioner is a partnership firm carrying on the business of dry cleaning, at Jaipur. The business premises of the petitioner were surveyed under Section 133A of the Income-tax Act (for brevity, "the Act"), on September 7, 1979, and, on account of some incriminating documents/bill books and other material, the assessments for the assessment years, 1975-76 to 1979-80 were reopened under Section 148 of the Act. While completing the fresh assessments under Section 143(3)/148 of the Act, the Income-tax Officer rejected the books of account and applied the net profit rate of 25 per cent. on receipts disclosed by the assessee. These assessments were set aside by the Tribunal to the stage of filing the revised returns, vide its order dated May 30, 1986. In the revised returns of income-tax, for the abovementioned years, the petitioner disclosed its income by applying a net profit rate of 25 per cent. on the receipts, as held by the Inspecting Assistant Commissioner in the case of the assessee for these very assessment years. These revised returns were filed under the amnesty scheme. In these assessment years, the income computed by the Income-tax Officer is the same as written by the assessee in these revised returns, claimed to have been filed under the amnesty scheme. Similarly, the assessment for the assessment year 1980-81 was also computed in the same manner. The petitioner moved an application dated September 8, 1988 (annexure 1), before the Chief Commissioner of Income-tax, Rajasthan, praying for waiver of penalty under Section 273A of the Act for the abovementioned assessment years, i.e., 1975-76 to 1980-81. IT was further stated that the petitioner claims benefits of the amnesty scheme. Another application dated April 5, 1989 (annexure 2), was filed, praying that the intention of the petitioner in filing the application (annexure 1) was only to file the same for acceptance of voluntary returns under the amnesty scheme. IT was prayed that the same may be treated to have been filed under the amnesty scheme and not under Section 273A(4) of the Act. Non-petitioner No. 4, Income-tax Officer, served a notice dated August 20, 1990 (annexure 7), on the petitioner, regarding assessment of the returns filed by the petitioner. The petitioner thereupon filed an application before the Chief Commissioner of Income-tax requesting that since the revised returns have been filed under the amnesty scheme, prosecution of the petitioner under Section 276/277 of the Act be not pursued and withdrawn. The Revenue thereafter did not produce any evidence before the Special Judge, Economic Offences, Jaipur, and, vide letter dated June 29, 1990 (annexure 3), conveyed the decision of withdrawing the cases of the petitioner. The petitioner thereafter personally met non-petitioner No. 4 on March 20, 1991, and requested him not to proceed with the notice dated August 20, 1990, issued in respect of the penalty proceedings, in view of the fact that the petitioner had submitted revised returns in pursuance of a scheme and has reliably learnt that the Chief Commissioner has accepted his application. However, non-petitioner No. 4 expressed his inability to rely on his verbal statement and asked him to produce the order of the Chief Commissioner before March 25, 1991, failing which he will proceed to finalise the penalty proceedings. It is submitted by learned counsel for the petitioners that before the revised returns were filed by the petitioner, a scheme was introduced in terms of Section 190 of the Act and various circulars were also issued in this connection. It is further submitted that the Chief Commissioner passed an order dated October 27/28, 1988, which was reproduced by the petitioner in para No. 14 of the writ petition and also placed on record by the respondents, in which it has been held that the matter of the petitioner is covered under the amnesty scheme and the assessments made for the assessment years 1975-76 to 1980-81, on the basis of revised returns filed, are accordingly treated as covered under the amnesty scheme and the benefits of the amnesty provided under the scheme with regard to levy of interest and penalty are allowed. A direction was also given that the Commissioner of Income-tax may be informed accordingly for necessary action. It is, therefore, contended that non-petitioner No. 4 could not have issued the notices for imposing penalty and could not have passed the assessment order dated March 25, 1991, imposing penalty on the petitioner for the assessment years mentioned above. Learned counsel also referred to Circular No. 451 (see [1986] 158 ITR (St.) 135), dated February 17, 1986, which clarified the press note and circular issued by the Ministry of Finance, regarding declaration of higher income or wealth in connection with the amnesty scheme and pointed out that since the petitioner filed its revised returns under the amnesty scheme, no proceedings regarding penalty could be initiated against the petitioner and the Department has to be liberal, even in waiver of interest, in such cases. It is submitted by Mr. Bapna, learned counsel, that the Chief Commissioner did not pass any order on October 27, 1988, but gave only a report and it is simply an administrative note, which was considered by the Central Board of Direct Taxes, vide its letters dated May 23, 1990 (annexure R-1) and February 15, 1991 (annexure R-2). In these annexures, it has been conveyed that the Board has agreed for withdrawal of prosecution, but there will be no waiver of interest and penalty, which would be decided as per lenient view. It is pointed out that the disclosure made by the petitioner was not voluntary and was done after survey of the business premises was conducted by the Department. It is also submitted that no application under Section 273A of the Act was filed as at the request of the petitioner itself, application, annexure 1, was treated as an application under the amnesty scheme. The Chief Commissioner of Income-tax has, thus, authority under Section 273A of the Act to pass any orders under the said provision, but an order passed under the amnesty scheme is only on the administrative side. The Board did not agree with the view of the Chief Commissioner of Income-tax and gave directions as per annexures R-1 and R-2, as mentioned above. It is, therefore, submitted that this writ petition is not maintainable as the petitioner had an alternate remedy to file an appeal, as provided under Section 246 of the Act. I have heard both the parties at length and also gone through the documents on record. An application dated December 2, 1992, has been filed with a prayer to amend the relief prayed for in the writ petition. The same is, therefore, allowed. So far as the maintenance of the writ petition is concerned, it may be pointed out that availability of an alternate remedy is no bar to the filing of a writ petition, which can be entertained, , keeping in view the circumstances of each matter. Apart from this, as pointed out by learned counsel for the petitioner, the order passed by the Commissioner of Income-tax, which is referred to in the order dated October 7, 1988, passed by the Chief Commissioner of Income-tax, holding that the case is not covered under the amnesty scheme, was never conveyed to the petitioner, more so, it is pointed out that no appeal could be filed against the said order, therefore, the petitioner made a representation to the Income-tax Officer when it came to know about this order. Therefore, I do not find any force in this objection regarding maintainability of the writ petition. From the facts mentioned above, it is evident that the earlier orders passed by the Income-tax Officer were set aside to the stage of filing revised returns by the Income-tax Appellate Tribunal, vide its order dated May 30, 1986. Therefore, the petitioner has to file revised returns regarding the assessment years mentioned above. Before the petitioner filed revised returns, the amnesty scheme was introduced by the Revenue. The petitioner filed revised returns for the abovementioned assessment years by disclosing income and applying the net profit rate of 25 per cent. on the receipts as was held by the Inspecting Assistant Commissioner in the case of the petitioner for these very same assessment years. The revised returns filed by the assessee were accepted, but proceedings of penalty were initiated by non-petitioner No. 4, vide notice dated August 20, 1990 (annexure 7). The Chief Commissioner of Income-tax has passed an order dated October 27, 1988, in detail and has also reproduced question No. 43 and the answer thereto from the clarification issued by the Commissioner of Income-tax, Jaipur, on January 28, 1986, which shows that when an order has been set aside on appeal and the assessee surrenders the amount, which is the subject-matter of dispute, in such a case, even though the "surrender cannot be taken as a suo motu declaration, but, naturally, a lenient view will be taken, if an assessee decides to turn honest, even at this stage." The Chief Commissioner of Income-tax, therefore, thought it appropriate that in the circumstances of the matter under consideration and keeping in view the pronounced policy of the Department for amnesty scheme, coupled with the fact that the assessee had decided to turn honest at this stage, this is a case, where a lenient view needs to be adopted. It may be stated that the petitioner-assessee has disclosed the additional income in the revised returns and also paid taxes thereon as required within the time-limit prescribed under the amnesty scheme. From the language of the order of the Chief Commissioner of Income-tax, it can be said that it is an order and not a report/administrative order, as pointed out by learned counsel for the non-petitioners. It has been clearly stated that the Chief Commissioner of Income-tax is satisfied that the case is covered under the amnesty scheme and that the assessments made for the assessment years mentioned above, on the basis of the revised returns filed, are treated as covered under the amnesty scheme and the benefits of amnesty provided under the scheme with regard to levy of interest and penalty are allowed. A further direction was given to inform the Commissioner of Income-tax accordingly, for necessary action. If this was a report, then the language of the operative portion could not have been as mentioned above.
(3.) IT may further be pointed out that circular dated February 17, 1986, published at [1986] 158 ITR (St.) 135, was issued to clarify certain doubts about the amnesty scheme. Questions Nos. 4 and 5 and answers thereto in the said circular, clarifying the position regarding penalty and prosecution, are as under : "Question No. 4.-- The income-tax circulars are not very clear as to whether the immunity from penalty and prosecution is guaranteed to the assessee unlike the circular in respect of wealth-tax which appears to be clear on this point ? Answer--The immunity from penalty and prosecution applies in all cases whether of income-tax or of wealth-tax where the assessee admits the truth and pays taxes properly. Question No. 5.--Has any time-limit within which the Commissioner of Income-tax would pass the order of waiver of penalty, interest, etc., been fixed ? Answer.--Since the Income-tax Officers have been instructed not to initiate penalty proceedings and to be liberal in waiver of interest in such cases, the question of waiver by Commissioner of Income-tax does not arise. The Income-tax Officers are, however, being instructed to finalise waiver proceedings by April 30, 1986." Thus, it is clear from questions Nos. 4 and 5 and the answers given thereto that since the petitioner had truthfully disclosed its income and also paid taxes thereon within the prescribed time, the petitioner was immune from prosecution and penalty. I am fortified in my view by a decision of CWT v. Jangi Lal [1986] 157 ITR 119 (All), in which it was held that when a voluntary disclosure of wealth is made under the Voluntary Disclosure of Income and Wealth Ordinance, 1975, and the assessment order is passed accepting the declaration, the assessee is entitled to immunity from the imposition of penalty. The same view was taken in Chhotabhai Jethabhai Patel and Co. v. CIT [1982] 134 ITR 201 (Guj). From annexure 3 dated June 29, 1990, which conveyed the decision to withdraw the prosecution of the petitioner, it is clear that this was done only because the revised returns filed by the petitioner-assessee were treated to have been filed and covered under the amnesty scheme. There could be no other reason for withdrawing the prosecution. It may also be pointed out that all the partners of the petitioner-firm are ladies and one of the partners, Smt. Parvati Bai, has since expired, they have suffered a lot by defending their cases in several courts/Tribunals for more than one decade and rightfully deserve to be treated leniently. In the result, the writ petition filed the petitioner is allowed. It is held that the revised returns filed by the petitioner will be treated to have been filed under the amnesty scheme. The petitioner shall be entitled to all the benefits of the amnesty scheme as already held by the Chief Commissioner of Income-tax, vide his order dated October 27, 1988. The petitioner is, therefore, immune from imposition of penalty as per Circular No. 451 (see [1986] 158 ITR (St.) 135), dated February 17, 1986. The non-petitioner No. 4 is prohibited from taking any further proceedings regarding penalty, etc., in pursuance of the impugned assessment order dated March 25, 1992, against the petitioner. The demand notices, regarding penalty issued against the petitioner, are also quashed. ;