JEEVA VACATION RESORT PVT. LTD. V. PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX

WP(C)/24536/2014

AI Insights

The case involves Jeeva Vacation Resort Pvt. Ltd. and its managing director, Mr. B.R. Ajit, who faced various proceedings under the Income Tax Act concerning capital gains from the sale of property. The property, initially developed into 'Silver Sand Island', was sold due to objections from the GCDA and other authorities, leading to incomplete development. The Income Tax Department issued notices under Sections 144 and 148 for the assessment year 2007-08, which the petitioners contested. After their appeals were pending, they received a notice under Section 279(1) regarding potential prosecution for non-compliance. The petitioners sought compounding of the offence, which the court directed to be considered expeditiously.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 755732 (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
• 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. 24536 of 2014 (N) ---------------------------- PETITIONER(S): -------------------------- 1. JEEVA VACATION RESORT PVT. LTD., 4TH FLOOR PUTHURAN PLAZA, KPCC JUNCTION, ERNAKULAM-682 011, REP. BY ITS MANAGING DIRECTOR MR.B.R.AJIT. 2. MR.B.R.AJIT, MANAGING DIRECTOR, M/S. JEEVA VACATION RESORT PVT. LTD., 4TH FLOOR PUTHURAN PLAZA, KPCC JUNCTION, ERNAKULAM-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. COMMISSIONER OF INCOME TAX, TRIVANDRUM, KERALA-682 031. 5. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), KOCHI-682 031. 6. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1 (1), KOCHI-682 031. 7. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2(1), KOCHI-682 031. 8. INCOME TAX OFFICE, WQRD-1(1), TRIVANDRUM-682 031. BY SRI.JOSE JOSEPH, SC, INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23-09-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: sts WP(C).No. 24536 of 2014 (N) ---------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- P1: COPY OF THE SALE DEED DATED 9.3.2007. P2: COPY OF NOTICE UNDER SEC.148 DATED 1.10.2013. P3: COPY OF NOTICE UNDER SEC.144 OF THE I.T. ACT DATED 5.11.2013. P4: COPY OF THE PETITIONER'S REPLY LETTER DATED 4.12.2013. P5: COPY OF THE INCOME TAX RETURN DATED 4.3.2009 FILED BY THE PETITIONER. P6: COPY OF THE PETITIONER'S LETTER DATED 23.12.2013. P7: COPY OF THE REVISED RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2007-08. P8: COPY OF 5TH REPONDENT'S NOTICE UNDER SEC.142(1)(III) DATED 11.03.2014. P9: COPY OF THE LETTER OF ADJOURNMENT DATED 21.3.2014. P10: COPY OF THE STATEMENT UNDER SEC 133(A) DATED 21.12.2012. P11: COPY OF PETITIONER'S LETTER DATED 26.3.2014. P12: COPY OF THE ASSESSMENT ORDER ALONG WITH TAX CALCULATION STATEMENT. P12(A): COPY OF THE DEMAND NOTICE UNDER SEC.156 OF I.T. ACT. P12(B): COPY OF THE NOTICE UNDER SEC. 274 READ WITH SEC 271(1)(C) OF I.T. ACT. P12(C): COPY OF THE NOTICE UNDER SEC 271F OF I.T. ACT. P13: COPY OF SHOWCAUSE NOTICE UNDER SEC.279(1) DATED 25.3.2014. P14: COPY OF PETITIONER'S LETTER DATED 27.3.2014. P15: COPY OF LETTER DATED 22.04.2014. P16: COPY OF APPLICATION DATED 11.08.2014 FILED BY PETITIONER BEFORE THE 1ST RESPONDENT. P17: COPY OF RTI REPLY DATED 26.5.2014. RESPONDENT(S)' EXHIBITS: NIL /TRUE COPY/ sts P.A.TO.JUDGE P.R. RAMACHANDRA MENON, J. ======================== W.P.(C). No. 24536 of 2014 -------------------------------------------- Dated this the 23rd day of September, 2014 JUDGMENT The first petitioner is a private limited company, having its main object to purchase and develop land and construct building thereon for carrying on the business of hotels, motels and resorts and develop activities relating to tourism business 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 7th respondent, various particulars were collected and proceedings were taken against the petitioners under different provisions of the Income Tax Act. Notices were also issued under Section 144 and 148 of the Income Tax Act as per Exts. P2 and P3 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. 24536 of 2014 -2- finalised against the petitioners as per Ext.P12 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.P13 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.P16 representation was preferred before the first respondent/Principal Chief Commissioner of Income Tax. The prayer is to cause the same to be considered within the shortest possible time. W.P.C. No. 24536 of 2014 -3- 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.P16 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/- "