BEAVER ESTATES PRIVATE LIMITED V. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX

WP(C)/24527/2014

AI Insights

The case involves Beaver Estates Private Limited and its Managing Director, B.R. Ajit, who faced proceedings under various provisions of the Income Tax Act, including notices under Sections 148, 156, 271(c), 271F, and 279(1). These proceedings were initiated following a survey by the Assistant Commissioner of Income Tax, Circle 1(1), Kochi, and subsequent assessments and demand notices for the assessment year 2007-08. The petitioners, aggrieved by the assessments and demand notices, appealed to the Commissioner of Income Tax (Appeals)-II, Kochi. Meanwhile, they were served a notice under Section 279(1) regarding potential prosecution under Section 276 CC of the Income Tax Act. The petitioners sought compounding of the offence, which was pending consideration at the time of the writ petition.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 755730 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 23-09-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: SAIBY KIDANGOOR
• Keywords: Assessment; Capital Gain; Compounding offence; Income Tax; Prosecution Proceedings
• Section: 148; 144; 274; 271F; 271(c); 156; 279(1); 133-A; 276 CC; 279(2)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON TUESDAY, THE 23RD DAY OF SEPTEMBER 2014/1ST ASWINA, 1936 WP(C).No. 24527 of 2014 (M) ---------------------------------------- PETITIONERS: ---------------------- 1. BEAVER ESTATES PRIVATE LIMITED,3RD FLOOR,PUTHURAN PLAZA, KPCC JUNCTION,M.G.ROAD,ERNAKULAM,KOCHI - 682011, REPRESENTED BY ITS MANAGING DIRECTOR MR.B.R.AJIT. 2. B.R.AJIT,MANAGING DIRECTOR, BEAVER ESTATES PRIVATE LIMITED,3RD FLOOR, PUTHURAN PLAZA, KPCC JUNCTION, M.G.ROAD, ERNAKULAM, KOCHI - 682011. BY ADV. SRI.SAIBY JOSE KIDANGOOR RESPONDENTS: ---------------------------- 1. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, KOCHI - 682 018. 2. COMMISSIONER OF INCOME TAX,KOCHI, KERALA - 682 018. 3. COMMISSIONER OF INCOME TAX (APPEALS)-II, KOCHI, KERALA- 682 018. 4. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1 (1), KOCHI - 682 018. 5. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1 (1) KOCHI -682 018. 6. ASSISTANT COMMISSIONER OF INCOME TAX, CIRLCE 2 (1) KOCHI - 682 018. BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23-09-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: pk WP(C).No. 24527 of 2014 (M) ---------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- EXHIBIT-P1-TRUE COPY OF NOTICE UNDER SECTION 148 DATED 18/03/2013. EXHIBIT-P2-TRUE COPY OF 5TH RESPONDENTS LETTER DATED 04/10/2013. EXHIBIT-P3-TRUE COPY OF THE SHOW CAUSE NOTICES UNDER SEC 144 OF IT ACT FOR THE ASSESSMENT YEAR 2007-08 DATED 30/10/2013. EXHIBIT-P4-TRUE COPY OF THE STATEMENT UNDER SEC 133 (A) DATED 21/12/2012. EXHIBIT-P5-TRUE COPY OF THE ACKNOWLEDGMENT EVIDENCING PAYMENT OF TAX FOR THE ASSESSMENT YEAR 2007-2008. EXHIBIT-P6-TRUE COPY OF THE PETITIONER'S LETTER DATED 25/03/2014 ALONG WITH COMPUTATION OF ASSESSMENT AND EVIDENCES. EXHIBIT-P7-TRUE COPY OF THE ASSESSMENT ORDER ALONG WITH TAX CALCULATION STATEMENT. EXHIBIT-P7(a)-TRUE COPY OF THE DEMAND NOTICE UNDER SECTION 156 OF I.T. ACT. EXHIBIT-P7(b)-TRUE COPY OF THE NOTICE UNDER SEC 274 READ WITH SECTION 271(c) OF THE I.T. ACT. EXHIBIT-P7(c)-TRUE COPY OF THE NOTICE UNDER SEC. 271F OF I.T ACT. EXHIBIT-P8-TRUE COPY OF THE SHOWCAUSE NOTICE UNDER SECTION 279(1) DATED 25/03/2014. EXHIBIT-P9-TRUE COPY OF THE PETITIONER'S LETTER DATED 27/03/2014. EXHIBIT-P10-TRUE COPY OF THE LETTER DATED 22/04/2014. EXHIBIT-P11-TRUE COPY OF THE APPLICATION DATED 11/08/2014 FILED BY THE PETITIONER BEFFORE THE IST RESPONDENT. EXHIBIT-P12-TRUE COPY OF THE RTI REPLY DATED 26/05/2014. RESPONDENTS EXHIBITS: NIL --------------------------------------- //TRUE COPY// P.S. TO JUDGE pk P.R. RAMACHANDRA MENON, J. ======================== W.P.(C). No. 24527 of 2014 -------------------------------------------- Dated this the 23rd day of September, 2014 JUDGMENT The first petitioner is a private limited company, having its main object to construct, transfer, sale or disposal of all types of buildings and the 2nd petitioner is its Managing Director. In the course of business, they transacted various conveyances, which included purchase of plots and development of the same as 'Silver Sand Island', near Vytilla in Ernakulam. But the project of the petitioners could not be completed as desired, because of objections from the GCDA and other authorities. In the said circumstance, there was no other alternative for the petitioners, but to sell the property to a prospective purchaser. 2. In the course of survey conducted by the 6th respondent, various particulars were collected and proceedings were taken against the petitioners under different provisions of the Income Tax Act. Notice was also issued under Section 148 of the Income Tax Act on 08.03.2013 in respect of the assessment year 2007- 08, referring to the 'capital gain' accumulated. 3. In the course of further proceedings, assessment was finalised against the petitioners as per Ext.P7 series, followed by W.P.C. No. 24527 of 2014 -2- demand notices under Section 156 of the Income Tax Act. Being aggrieved of the assessment, the petitioners moved the third respondent/the Commissioner of Income Tax (Appeals)-II, before whom the appeals are pending. It is in the meanwhile, that the petitioners have been served with Ext.P8 notice under Section 279(1) of the Act, as to why prosecution proceedings shall not be initiated under Section 276 CC of the Income Tax Act. It is stated that the petitioners have submitted a detailed reply. But without any regard to the same, the proceedings were pursued, leading to C.C..915 of 2014 before the Addl. C.J.M. Court, Ravipuram and it was only on coming across the summons served upon the petitioners, that they could realise that the proceedings had already been initiated, which according to the petitioners is without considering their objections and hence not correct or sustainable. 4. The learned Counsel for the petitioners submits that, by virtue of the turn of events and other embarrassing circumstances, the petitioners have decided to seek for permission of the respondents for compounding the offence, as provided under Section 279 (2) of the Act. It was accordingly, that Ext.P11 representation was preferred before the first W.P.C. No. 24527 of 2014 -3- respondent/Principal Chief Commissioner of Income Tax. The prayer is to cause the same to be considered within the shortest possible time. 5. Heard the learned Standing Counsel for the respondents as well. 6. In view of the limited nature of the reliefs sought for, this Court does not find it necessary to deal with the merits of the case. Accordingly, the first respondent is directed to consider Ext.P11 representation and pass appropriate orders, after affording an opportunity of hearing to the petitioners, at the earliest, at any rate, within one month from the date of receipt of a copy of the judgment. Further steps by the respondents in connection with prosecution in C.C.No.915 of 2014 of the Addl. C.J.M. Court, Ravipuram may be kept in abeyance till such time. The writ petition is disposed of. The petitioners shall produce a copy of the judgment along with a copy of the writ petition before the first respondent for further steps. P.R. RAMACHANDRA MENON, JUDGE. kp/- "