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Ved Prakash Gupta and another Versus Commissioner of Income-Tax U.P. and others

[1957] 32 ITR 133 - Special Appeal No. 183 of 1955 - Dated:- 1-4-1957 - Bhargava And Mehrotra, JJ. For the Appellant : Ambika Prasad For the Respondent : J. Sarup JUDGMENT This is an appeal against the judgment of a single Judge of this Court on an application under article 226 of the Constitution. The facts briefly are that the two appellants are brothers and they own a number of firms which were registered in accordance with the provisions of the Income-tax Act. They also hold shares in a priv .....

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dealt with "voluntary disclosure of income". This scheme was subsequently supplemented by another notification dated 18th July, 1951. The purport of the first press notification issued was that the assessees who were in arrears were permitted to bring into their accounts some additional cash. The time fixed for bringing such cash was 31st July, 1951. By that time they had to file an application before the Inspecting Assistant Commissioner of Income-tax. On receipt of such an applicatio .....

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nstalments was to lapse and necessary action had to be taken to recover the arrears. This scheme was to apply only to the arrears of demand assessed before 1st April, 1951. The assessee was further allowed to bring into his accounts the cash which represented the estimated "intangible addition" to the declared income made by the Income-tax-Officer in the relevant assessment and the introduction of this cash was not to attract any penalty, prosecution or further tax. The other part of t .....

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permitted to bring into their account books unaccounted for cash without any fear of penalty, prosecution or further taxation. The cash, however, had to be brought into books before 31st August, 1951. An intimation of this amount had to be immediately sent to the Income-tax Officer concerned and the amount of cash that was to be exempt from taxation was to the extent of the "intangible additions" made in the immediately preceding three completed assessments. The cash so introduced was .....

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of concealed incomes totalling a sum of ₹ 2,66,101. The Inspecting Assistant Commissioner did not accept this disclosure and they further agreed to add another sum of ₹ 75,000 to the already disclosed income. Thus the total disclosed income came to ₹ 3,41,101. The question then had to be considered by the Inspecting Assistant Commissioner as regards the deductions which could be claimed by the appellants in respect of the "intangible additions". A deduction of ₹ .....

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n different dates in 1953 and the total income-tax assessed on the disclosed income as also the profits they had earned in these four years was a sum of ₹ 1,75,000 and odd. In addition to this demand there was an arrear of about ₹ 37,000 payable by the petitioners on account of the income-tax for the years prior to 1947-48. Demands were made from the petitioners, a very small amount was paid by them, and they applied for payment of the demand by instalments. On 21st November, 1953, a .....

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th February, 1954, for allowing instalments and on 19th February, 1954, a reply was sent that the commissioner was prepared to consider the request for increasing the instalments if the petitioners paid half of the tax due before the end of the current financial year. If the petitioners, however, failed to pay that and the petitioners did not agree to the terms then the Income-tax Officer was to proceed to collect the tax in the normal course. On 24th February, 1954, the petitioners said that th .....

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on for the following reliefs: (i) A writ of mandamus to the opposite party No. 2 directing him to observe the directions issued by the Ministry of Finance, Government of India, and pass orders after reconsidering the position according to the concessional scheme notified on the 19th of May, 1951, and supplemented by a notification dated 18th July, 1951. (ii) A writ of certiorari quashing the assessment orders dated 20th April, 1953, 25th March, 1953 and 19th December, 1953, regarding petitioner .....

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this Court by his order which is under appeal rejected the petition. In our opinion, the press notifications issued by the State Government have no legal force. They do not appear to have been passed under the provisions of the Income-tax Act or any other law and consequently the petitioners are not entitled to any relief by way of mandamus directing the opposite parties to enforce the provisions of the press notifications. Coming, however, to the relief claimed by the petitioners by way of rex .....

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sidered as intangible additions in the preceding three years. The balance on which the petitioners were assessed was voluntary disclosure of their income for the years 1947-48, 1948-49, 1949-50 and 1950-51 by the petitioners themselves so that it is no longer open to them to say that it was not income of those years. Further, as we have held above, the press notes have no legal binding force and the petitioners cannot therefore claim that the Department should be bound by them and must make dedu .....

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go into the question as to how much was the amount which the petitioners were entitled to deduct as intangible additions for the previous years. It was contended by Sri Ambika Prasad, who appeared for the appellants, that if it is held that the press notification had no legal binding force the amount of ₹ 2,12,000 which was regarded as voluntary disclosure by the petitioners and on which they were assessed was really income of the preceding years and they can only be assessed on that amoun .....

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ent for four years the petitioners themselves disclosed an income of ₹ 2,18,000 and the only amount to which they were taxed was ₹ 22,12,000. It cannot, therefore, be on the face of it said that it was even income of the preceding years. There is, therefore, in our opinion no force in this appeal. During the pendency of this appeal the petitioners filed two writ petitions which have been connected with this appeal namely, No. 587 of 57 and No. 1013 of 55. As it was stated by the coun .....

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