CAPVEST WEALTH MANAGEMENT SERVICES PTV. LTD. V. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX

WP(C)/24540/2014

AI Insights

The case involves Capvest Wealth Management Services Pvt. Ltd. and its Managing Director, Mr. B.R. Ajit, who faced various proceedings under the Income Tax Act following transactions related to a property development project named 'Silver Sand Island' in Ernakulam. Due to objections from local authorities, the project was not completed, leading to the sale of the property. Subsequent tax assessments and notices were issued, including a notice under Section 148 for capital gains. The petitioners appealed against the assessments, which are still pending. Meanwhile, they received a notice under Section 279(1) regarding potential prosecution for non-compliance with tax obligations. The petitioners sought to compound the offence, which led to the current writ petition.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 763301 (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: Capital Gain; Compounding offence; Income Tax; Prosecution Proceedings; Wealth Management
• Section: 148; 144; 271(1)(c); 271F; 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. 24540 of 2014 (N) -------------------------------------- PETITIONERS: --------------------- 1. CAPVEST WEALTH MANAGEMENT SERVICES PVt. LTD., 3RD FLOOR, PUTHURAN PLAZA,KPCC JUNCTION,M.G ROAD, ERNAKULAM- 682 011, REP. BY ITS MANAGING DIRECTOR MR.B.R AJIT 2. MR.B.R AJIT,MANAGING DIRECTOR, CAPVEST WEALTH MANAGEMENT SERVICES PVT LTD, PUTHURAN PLAZA,THIRD FLOOR,MG ROAD, KPCC JUNCTION, ERNAKULAM, KOCHI 682 011 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), KOCHI 682 018. 6. ASSISTANT COMMISSIONER OF INCOME TAX,CIRCLE 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. 24540 of 2014 (N) --------------------------------------- APPENDIX PETITIONERS EXHIBITS ------------------------------------- EXHIBIT P1:TRUE COPY OF NOTICE UNDER SEC 148 DATED 08-03-2013. EXHIBIT P2:TRUE COPY OF 5TH RESPONDENT'S LETTER DATED 04-10-2013. EXHIBIT P3:TRUE COPY OF THE RELAV ANT PORTION OF THE SHOWCAUSE NOTICE UNDER SEC 144 OF IT ACT FOR THE ASSESSMENT YEAR 2007-08 DATED 31-10-2013. EXHIBIT P4:TRUE COPY OF THE STATEMENT UNDER SEC 133(A) DATED 21-12-2012. EXHIBIT P5 TRUE COPY OF THE INCOME TAX RETURN DATED 04-03-2009 FILED BY THE PETITIONER. EXHIBIT P6:TRUE COPY OF PETITIONER'S LETTER DATED 23-12-2013. EXHIBITP7:TRUE COPY OF 4TH RESPONDENT'S LETTER DATED 11-03-2014. EXHIBIT P8:TRUE COPY OF 4TH RESPONDENT'S LETTER DATED 18-03-2014. EXHIBIT P9:TRUE COPY OF PETITIONER'S LETTER DATED 26-03-2014 SENT TO 4TH RESPONDENT. EXHIBIT P10:TRUE COPY OF THE ASSESSMENT ORDER ALONG WITH TAX CALCULATION STATEMENT. EXHIBIT P10(a) :TRUE COPY OF THE DEMAND NOTICE UNDER SEC 156 OF I.T ACT. EXHIBIT P10(b) :TRUE COPY OF THE NOTICE UNDER SECTION 274 READ WITH SEC 271(1) (C) OF I.T ACT. EXHIBIT P10(c): TRUE COPY OF THE NOTICE UNDER SEC 271F OF I.T ACT. EXHIBIT P11:TRUE COPY OF SHOW CAUSE NOTICE UNDER SEC 279(1) DATED 25-03-2014. EXHIBIT P12:TRUE COPY OF PETITIONER'S LETTER DATED 27-03-2014. EXHIBIT P13:TRUE COPY OF LETTER DATED 22-04-2014. EXHIBIT P14:TRUE COPY OF APPLICATION DATED 11-08-2014 FILED BY PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P15:TRUE COPY OF RTI REPLY DATED 26-05-2014 RESPONDENT(S)' EXHIBITS: NIL --------------------------------------- //TRUE COPY// pk P.S. TO JUDGE P.R. RAMACHANDRA MENON, J. ======================== W.P.(C). No. 24540 of 2014 -------------------------------------------- Dated this the 23rd day of September, 2014 JUDGMENT The first petitioner is a private limited company, having its main object to provide wealth management services in the area of shares, commodity derivatives and forex 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 W.P.C. No. 24540 of 2014 -2- finalised against the petitioners as per Ext.P10 series, followed by 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.P11 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, proceedings were pursued by the respondent department 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.P14 representation was preferred before the first W.P.C. No. 24540 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.P14 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 proceedings, if any, 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/- "