ELTON TECHNOLOGIES V. PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX

WP(C)/25281/2014

AI Insights

The case involves Elton Technologies Pvt Ltd., represented by its Managing Director, Mr. B.R. Ajit, who faced various proceedings under the Income Tax Act following a survey by the 6th respondent. The proceedings included notices under Sections 148, 156, and 271(1)(c) of the Income Tax Act concerning alleged capital gains and other tax liabilities for the assessment year 2007-08. The petitioners contested the assessments and the initiation of prosecution proceedings under Section 276 CC of the Income Tax Act, arguing that their objections were not considered. They sought compounding of the alleged offences, which was pending consideration by the tax authorities at the time of the writ petition.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 755727 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 29-09-2014
• 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 Order; Capital Gain; Compounding of offences; Income Tax; Notice; Prosecution Proceedings; Show cause notice
• Section: 148; 144; 271(1)(c); 156; 279(1); 133-A; 276 CC; 279(2); 271 F

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON MONDAY, THE 29TH DAY OF SEPTEMBER 2014/7TH ASWINA, 1936 WP(C).No. 25281 of 2014 (I) ---------------------------- PETITIONER(S): --------------- 1. ELTON TECHNOLOGIES PVT LTD., (FORMERLY KNOWN AS ELTON WEB SOLUTIONS PVT LTD), 3RD FLOOR PUTHURAN PLAZA, KPCC JUNCTION, M.G.ROAD, ERNAKULAM - 682 011, KERALA REP. BY ITS MANAGING DIRECTOR MR.B.R.AJIT. 2. MR.B.R.AJIT, MANAGING DIRECTOR, ELTON TECHNOLOGIES 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 - 682 018. 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, CIRCLE 2 (1), KOCHI - 682 018. BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29-09-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: RVS. WP(C).No. 25281 of 2014 (I) APPENDIX PETITIONER(S)' EXHIBITS : EXT. P1 - TRUE COPY OF NOTICE UNDER SEC. 148 DT. 08.3.13. EXT. P2 - TRUE COPY OF 5TH RESPONDENT'S LETTER DT. 04.10.13. EXT. P3 - TRUE COPY OF SHOWCAUSE NOTICE UNDER SEC. 144 OF IT ACT FOR THE ASSESSMENT YEAR 2007-08 DT. 31.10.13. EXT. P4 - TRUE COPY OF THE STATEMENT UNDER SEC. 133(A) DT. 21.12.12. EXT. P5 - TRUE COPY OF THE ACKNOWLEDGMENT EVIDENCING THE PAYMENT OF RETURNS FOR THE YEAR 2007-08. EXT. P6 - TRUE COPY OF THE CLARIFICATION LETTER DT. 23.12.13. EXT. P7 - TRUE COPY OF 4TH RESPONDENT'S LETTER DT. 11.3.14 FOR THE ASSESSMENT YEAR 2007-08. EXT. P8 - TRUE COPY OF 4TH RESPONDENT'S LETTER DT. 18.3.14. EXT. P9 - TRUE COPY OF PETITIONER'S LETTER DT. 26.3.14 SENT TO 4TH RESPONDENT. EXT. P10 - TRUE COPY OF THE ASSESSMENT ORDER ALONG WITH TAX CALCULATION STATEMENT. EXT. P10(A) - TRUE COPY OF THE DEMAND NOTICE UNDER SEC. 156 OF IT ACT. EXT. P10 (B) - TRUE COPY OF NOTICE UNDER SEC 274 READ WITH SEC 271(1) (C) OF IT ACT. EXT. P10(C) - TRUE COPY OF NOTICE UNDER SEC. 271-F OF IT ACT. EXT. P11 - TRUE COPY OF SHOW CAUSE NOTICE UNDER SEC. 279(1) DT. 25.3.14. EXT. P12 - TRUE COPY OF PETITIONER'S LETTER DT. 27/3/14. EXT. P13 - TRUE COPY OF PETITIONER'S LETTER DT. 22.4.14. EXT. P14 - TRUE COPY OF APPLICATION DT. 11.8.14 FILED BY PETITIONER FOR COMPOUNDING OF ALLEGED OFFENCES. EXT. P15 - TRUE COPY OF RTI REPLY DT. 26.5.14. RESPONDENT(S)' EXHIBITS : NIL. /TRUE COPY/ P.A.TO JUDGE RVS. P.R. RAMACHANDRA MENON, J. ----------------------------------- W.P(C). No. 25281 of 2014 ------------------------------------------- Dated this the 29th day of September, 2014 J U D G M E N T The first petitioner is a private limited company, having its main object to carry on the business as Software Developers, E- Commerce, Internet Service Providers and all information technology related business, while the 2nd petitioner is its Managing Director. In the course of business, they effected various conveyances, which included purchase of plots and development of the same as 'Silver Sand Island', near Vytilla in Ernakulam. Allegedly since the said purchase of land was ultravires the Memorandum of Association of the 1st petitioner company, the petitioners were forced to sell the land. 2. Pursuant to the 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 WP(c). No. 25281 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 prosecution 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 WP(c). No. 25281 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 in accordance with law, 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. Sd/- P.R. RAMACHANDRA MENON, JUDGE. Pn "