CAPVEST WEALTH MANAGEMENT V. PRINCIPAL CHIEF COMMISSIONER

WP(C)/24537/2014

AI Insights

The case involves Capvest Wealth Management Services Pvt. Ltd. and its Managing Director, Mr. B.R. Ajit, who faced proceedings under various provisions of the Income Tax Act following a survey by the 6th respondent. The proceedings included a notice under Section 144 for the assessment year 2009-10 concerning 'capital gain' and subsequent assessments and demand notices. Aggrieved by these, the petitioners appealed to the Commissioner of Income Tax (Appeals)-II, where their appeals were pending. Meanwhile, they received a notice under Section 279(1) regarding potential prosecution under Section 276 CC of the Income Tax Act. The petitioners sought to compound the offence, which led to their representation to the Principal Chief Commissioner of Income Tax, seeking a prompt decision on their request.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 693945 (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: 144; 271(1)(c); 274; 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. 24537 of 2014 (N) ---------------------------- PETITIONER(S) : -------------------------- 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 RESPONDENT(S) : ---------------------------- 1. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, KOCHI - 682 031. 2. COMMISSIONER OF INCOME TAX, KOCHI, KERALA - 682 031. 3. COMMISSIONER OF INCOME TAX (APPEALS)-II, KOCHI, KERALA - 682 031. 4. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1 (1), KOCHI - 682 031. 5. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE I (1), KOCHI - 682 031. 6. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 2(1), KOCHI - 682 031. R1 TO R6 BY ADV. SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23-09-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Mn ...2/- WP(C).No. 24537 of 2014 (N) ---------------------------------------- APPENDIX PETITIONERS' EXHIBITS : ------------------------------------- EXHIBIT P1 TRUE COPY OF 5TH RESPONDENT'S LETTER DATED 04-10-2013. EXHIBIT P2 TRUE COPY OF THE SHOWCAUSE NOTICE UNDER SEC 144 OF IT ACT FOR THE ASSESSMENT YEAR 2009-10 DATED 31-10-2013. EXHIBIT P3 TRUE COPY OF THE STATEMENT UNDER SEC 133(A) DATED 21-12-2012. EXHIBIT P4 TRUE COPY OF PETITIONER'S CLARIFICATION LETTER DATED 23-12-2013 ALONG WITH ACKNOWLEDGEMENT EVIDENCING PAYMENT OF INCOME TAX RETURN AND THE STATEMENT OF COMPUTATION OF TAXABLE INCOME. EXHIBIT P5 TRUE COPY OF 4TH RESPONDENT'S LETTER DATED 11-03-2014 FOR THE ASSESSMENT YEAR 2009-10. EXHIBIT P6 TRUE COPY OF PETITIONER'S LETTER DATED 18-03-2014. EXHIBIT P7 TRUE COPY OF PETITIONER'S LETTER DATED 26-03-2014 SENT TO 4TH RESPONDENT. EXHIBIT P8 TRUE COPY OF THE ASSESSMENT ORDER ALONG WITH TAX CALCULATION STATEMENT. EXHIBIT P8(a) TRUE COPY OF THE DEMAND NOTICE UNDER SEC 156 OF IT ACT. EXHIBIT P8(b) TRUE COPY OF THE NOTICE UNDER SEC 274 READ WITH SEC 271(1) (C) OF I.T ACT. EXHIBIT P8(c) TRUE COPY OF THE NOTICE UNDER SEC 27IF OF I.T ACT. EXHIBIT P9 TRUE COPY OF SHOW CAUSE NOTICE UNDER SEC 279(1) DATED 25-03-2014. EXHIBIT P10 TRUE COPY OF PETITIONER'S LETTER DATED 27-03-2014. EXHIBIT P11 TRUE COPY OF LETTEER DATED 22-04-2014. EXHIBIT P12 TRUE COPY OF APPLICATION DATED 11-08-2014 FILED BY PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P13 TRUE COPY OF RTI REPLY DATED 26-05-2014. RESPONDENT(S)' EXHIBITS : NIL ---------------------------------------------------------- //TRUE COPY// P.A. TO JUDGE Mn P.R. RAMACHANDRA MENON, J. ======================== W.P.(C). No. 24537 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 144 of the Income Tax Act on 31.10.2013 in respect of the assessment year 2009- 10, referring to the 'capital gain' accumulated. 3. In the course of further proceedings, assessment was W.P.C. No. 24537 of 2014 -2- finalised against the petitioners as per Ext.P8 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.P9 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.P12 representation was preferred before the first W.P.C. No. 24537 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.P12 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/- "