M/S R.R. HOLIDAY HOMES PVT.LTD V. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1(1)

Crl.MC/5769/2017

AI Insights

The case involves M/S R.R. Holiday Homes Pvt. Ltd. and its managing director, S. Rajasekharan Nair, as petitioners, facing prosecution for alleged willful delay in filing income tax returns, which the Department of Income Tax argued was a modus operandi to avoid tax payments. The petitioners contended that their financial difficulties prevented timely filing, and they only filed after settling the admitted tax. The court, referencing a similar case (Crl.M.C.No.5769/2017), decided to stay the prosecution proceedings pending the appeal's outcome, highlighting the need for a thorough examination of the petitioners' financial claims and the circumstances of the delay.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 755379 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 08-12-2017
• Assessment Year: misc
• Other Referred Cases: M/S. Emmanuval Silks and Others vs. Hon'ble Court
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM; K M V P ANDALA; ALEX THOMBRA
• Assessee Lawyers: T M SREEDHARAN; L NARAYAN; V P NARAYANAN
• Keywords: Appeal Stay; Income tax return delay; Penalty Imposition; Willful Delay
• Section: 143(3); 271(1)(c); 271B

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE B.KEMAL PASHA FRIDAY , THE 8TH DAY OF DECEMBER 2017/17TH AGRAHAYANA, 1939 Crl.MC.No. 5769 of 2017 ------------------------------------- C.C.NO. 251/2017 OF THE ADDITIONAL CHIEF JUDICIAL MAGISTRATE COURT (ECONOMIC OFFENCES), ALAPPAT ROAD, RAVIPURAM, KOCHI- 682 016 ---------------------- PETITIONER(S)/ACCUSED 1 & 2 : ------------------------------------------------- 1. M/S.R.R.HOLIDAY HOMES PVT.LT D., KARTHIKEYAM, TC 34/757, NEAR AIR FORCE STATION, SANGHUMUGHOM, BEACH P.O., THIRUVANANTHAPURAM-695 007, REPRESENTED BY ITS MANAGING DIRECTOR AND PRINCIPAL OFFICER, SHRI. S.RAJASEKHARAN NAIR, AGED 62 YEARS, S/O.SHRI SREEDHARAN NAIR. 2. S.RAJASEKHARAN NAIR, AGED 62 YEARS, S/O.SHRI.SREEDHARAN NAIR, MANAGING DIRECTOR AND PRINCIPAL OFFICER, M/S.R.R. HOLIDAY HOMES PVT.LTD, KARTHIKEYAM, TC 34/757, NEAR AIR FORCE STATION, SANGHUMUGHOM, BEACH P.O., THIRUVANANTHAPURAM-695 007. BY SRI.T.M.SREEDHARAN (SENIOR ADVOCATE) ADVS. SRI.L.RAJESH NARAYAN SRI.V.P. NARAYANAN RESPONDENT(S)/STATE AND COMPLAINANT : ------------------------------------------------------------------------ 1. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(1) THIRUVANANTHAPURAM, O/O.THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM-695 003. 2. THE PRINCIPAL COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM. 3. THE COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM. ..2/- ..2.. Crl.MC.No. 5769 of 2017 ------------------------------------- 4. THE STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM-682031. R1 TO R3 BY ADV. SRI.CHRISTOPHER ABRAHAM ADV. SRI.K.M.V.P ANDALAI R4 BY PUBLIC PROSECUTOR SRI.ALEX M.THOMBRA THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 08-12-2017, ALONG WITH Crl.MC.No. 5781 OF 2017, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: Msd. Crl.MC.No. 5769 of 2017 ------------------------------------ APPENDIX PETITIONER(S)' ANNEXURES : ANNEXURE A TRUE COPY OF PENALTY ORDER PASSED U/S. 271B DATED 29-06-2017 ALONG WITH DEMAND NOTICE FOR THE ASST. YEAR 2014-15 PASSED BY THE 1ST RESPONDENT. ANNEXURE B TRUE COPY OF ASSESSMENT ORDER DATED 27-12-2016 PASSED U/S.143(3) OF THE INCOME TAX ACT ALONG WITH THE DEMAND NOTICE AND COMPUTATION OF INCOME FOR THE ASST.YEAR 2014-15 PASSED BY THE 1ST RESPONDENT. ANNEXURE C TRUE COPY OF REPORT NO.AACCR7529L/CIR-I(1)/ TVM/2016-17 DATED 22-06-2016 PASSED BY THE 1ST RESPONDENT. ANNEXURE D TRUE COPY OF PROPOSAL DATED 04-01-2017 ALONG WITH THE ANNEXURES THERETO PASSED BY THE 1ST RESPONDENT. ANNEXURE E TRUE COPY OF LETTER DATED 30-01-2017 ISSUED BY THE 3RD RESPONDENT TO THE 2ND PETITIONER. ANNEXURE F TRUE COPY OF LETTER DATED 13-03-2017 ISSUED BY THE 3RD RESPONDENT TO THE 2ND PETITIONER. ANNEXURE G TRUE COPY OF REPLY DATED 17-03-2017 SUBMITTED TO THE 3RD RESPONDENT. ANNEXURE H TRUE COPY OF THE SUMMONS ISSUED TO THE 1ST PETITIONER IN C.C.NO.251/2017 ISSUED BY THE ADDITIONAL CHIEF JUDICIAL MAGISTRATE (ECONOMIC OFFENCES) COURT, ERNAKULAM. ANNEXURE I TRUE COPY OF THE SUMMONS ISSUED TO THE 2ND PETITIONER IN C.C.NO.251/2017 ISSUED BY THE ADDITIONAL CHIEF JUDICIAL MAGISTRATE (ECONOMIC OFFENCES) COURT, ERNAKULAM. ANNEXURE J TRUE COPY OF THE C.C.NO.251 OF 2017 FILED BY THE 1ST RESPONDENT BEFORE THE ADDITIONAL CHIEF JUDICIAL MAGISTRATE (ECONOMIC OFFENCES) COURT, ERNAKULAM. ANNEXURE K TRUE COPY OF THE C.C.NO.252 OF 2017 FILED BY THE 1ST RESPONDENT BEFORE THE ADDITIONAL CHIEF JUDICIAL MAGISTRATE (ECONOMIC OFFENCES) COURT, ERNAKULAM. Crl.MC.No. 5769 of 2017 ------------------------------------ ANNEXURE L TRUE COPY OF THE ORDER DATED 29-06-2017 ISSUED BY THE 1ST RESPONDENT U/S 271(1)(C) ALONG WITH DEMAND NOTICE. ANNEXURE M TRUE COPY OF MEMORANDUM OF APPEAL DATED 03.08.2017 FILED AGAINST ORDER U/S.271(1)(C) BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), TRIVANDRUM FOR 2014-2015. ANNEXURE N TRUE COPY OF JUDGMENT DATED 19.09.2017 IN W.P(C).NO. 30118/2017 OF THIS HON'BLE COURT. ANNEXURE O TRUE COPY OF JUDGMENT DATED 11.01.2016 IN CRL.M.C.NO. 3467/2015 IN THE CASE OF M/S.EMMANNUVAL SILKS AND OTHERS OF THIS HON'BLE COURT. RESPONDENT(S)' ANNEXURES : NIL //TRUE COPY// P.S.TO JUDGE Msd. B. KEMAL PASHA, J. ................................................................ CRL.M.C. Nos. 5769 & 5781 of 2017 ............................................................... Dated this the 8th day of December, 2017 O R D E R There was a delay in filing income tax return in these matters. According to the petitioners, the delay was not willful; whereas, the Department says that the delay was willful. According to the Department, the delay was willful in the sense that it was also a modus operandi to avoid the payment of tax. The learned counsel for the petitioners has pointed out that the petitioners were suffering from utter financial stringency and therefore, the return could not be filed in time. The return could be filed only on uploading the payment of the admitted tax. They were not in a position to pay the admitted tax and that is the reason why the delay had occurred. 2. Huge amounts were imposed on the petitioners as penalty . Of course, in case of such willful delay , and CRL.M.C.Nos. 5769 & 5781 of 2017 -: 2 :- concealment of income, it is for the Department to take such measures. 3. Now, an appeal has been filed and the matter is pending adjudication. In the mean time, the petitioners had approached this Court and the matters in the appeal stands stayed by the orders of this Court as is evident from Annexure N in Crl.M.C. No.5769 of 2017. In a similar situation this Court had occasion to pass Annexure O order in Crl.M.C.No.5769/2017. In this particular situation, this Court is of the view that the prosecution proceedings before the court below in these matters shall stand stayed, till the disposal of the appeal. In the result, these Crl.M.Cs. are disposed of by ordering that the prosecution proceedings before the court below in these matters shall stand stayed till the disposal of the appeal. Sd/- B. KEMAL P ASHA, JUDGE. ul/- // true copy // P .S. to Judge. "