Delhi High Court
Zoom Leasing & Finance Co. Ltd. vs Commissioner Of Income Tax on 3 March, 1992
Author: B Kirpal
Bench: B Kirpal, S Duggal
JUDGMENT
B.N. Kirpal, J.
1. We have heard the learned counsel for the parties at length and have also perused the order of the CIT 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 cooperation 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 cooperate 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 ITO. Full names and addresses of the allottees of the shares were not furnished Along with 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 income. It is thereafter that an application was filed under s. 273A for waiver of interest and penalty under s. 273.
4. The CIT in the impugned order has adverted to the fact that list of shareholders representing the extent of the amount disclosed has not been furnished. She held that there was lack of cooperation by the assessed.
5. It has been contended by the 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 by the ITO to be filed but the same was not furnished. De that as it may, the CIT gave further Opportunity to the petitioner. Even if it be assumed that there was no lack of cooperation 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 some of the shareholders cannot remain on the Register of Members.
6. The effect of disclosure was that share holding, as represented in the books of account, was not correct. The disclosure of full particulars as contemplated by s. 173(1)(b) 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 CIT 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 s. 271(1)(c) of the Act are attracted. We do not agree with the 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 s. 271 are attracted.
9. The writ petition is dismissed.
