Kakkar Leasing And Finance Co. ... vs Commissioner Of Income-Tax
1992 Latest Caselaw 167 Del

JUDGMENT

B.N. Kirpal J.

1. We have heard learned counsel for the parties at length and have also perused the order of the Commissioner of Income-tax and, after taking into consideration the affidavit in reply filed by her, we are of the opinion that, on the facts and circumstances of this case, no interference under article 226 of the Constitution is called for.

2. It has been, inter alia, contended that full co-operation was extended in the present case and the Commissioner is wrong in rejection the application by holding that there was failure on the part of the petitioner to co-operate with the assessing authority.

3. In the present case, the petitioner had originally filed a return. During the course of assessment proceedings, it transpired that shares had been issued. Details of the shareholders were desired by the Income-tax Officer. Full names and addresses of the allottees of the shares were not furnished along with the confirmation of the said shareholders and the petitioner then made a voluntary disclosure agreeing to surrender 25% of the capital receipt treated as income from undisclosed sources. It is thereafter that an application was filed under section 273 for waiver of interest and penalty under section 273.

4. The Commissioner of Income-tax, in the impugned order, has adverted to the fact that a list of shareholders representing the extent of the amount disclosed has not been furnished. She held that there was lack of co-operation by the assessed.

5. It has been contended by learned counsel for the petitioner that such a list was not demanded by the assessing authority. In the reply affidavit, it has been stated that a complete list along with confirmation was asked for by the Income-tax Officer to be filed by the same was not furnished. Be that as it may, the Commissioner of Income-tax gave a further opportunity to the petitioner. Even if it be assumed that there was no lack of co-operation before the assessing authority, we are firmly of the opinion that in a case like this, where out of the capital allegedly received substantial part of it is surrendered as income from undisclosed sources, the capital to that extent must stand reduced. The number of shares issued to the shareholders should either be decreased or some of the shareholders cannot remain on the register of members.

6. The effect of disclosure was that the shareholding, as represented in the books of account, was not correct. The disclosure of full particulars as contemplated by section 273 would take place only when a revised list of shareholders is furnished indicating the extent of shares voluntarily allotted to the persons whose names are contained in the list.

7. In our opinion, the conclusion arrived at by the Commissioner of Income-tax cannot be held to be an unreasonable or incorrect one.

8. It was contended by Mr. Syali that, according to the Explanation, there will be lack of complete disclosure only if the provisions of section 271 of the Act are attracted. We do not agree with learned counsel. Disclosure of full particulars would take place only if the names and addresses of the shareholders, after surrender, is furnished. If that is not given, it would amount to concealment because admittedly what was not originally an income has been returned as income as a result of disclosure. On the facts as available on the record of this case, we have no doubt in our mind that even provisions of section 271 are attracted.

9. The writ petition is dismissed.