Upasana Hospital and Nursing Home, Quilon and Dr. P.N. Bhaskaran, Managing Partner V. The Income-Tax Officer, B-Ward, Thiruvananthapuram and The Central Board of Direct Taxes (CBDT), New Delhi and The State of Kerala, represented by its Chief Secretary to Government, Thiruvananthapuram

OP/6081/2001

AI Insights

The case involves Upasana Hospital and Nursing Home, Quilon, represented by its managing partner Dr. P.N. Bhaskaran, challenging the prosecution proceedings initiated by the Income Tax Department for the assessment years 1983-1984, 1984-1985, and 1985-1986. The allegations against the petitioners included willful attempt to evade tax, failure to file returns, and making a false statement in the return verification, all under various sections of the Income Tax Act. The petitioners argued that similar allegations had previously led to penalty proceedings, which were set aside, and thus, prosecution should not lie. The court, however, directed that these issues be raised in the ongoing prosecution proceedings.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 807545 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 12-01-2009
• Assessment Year: misc
• Other Referred Cases: K.C. Builders and Another v Assistant Commissioner of Income-Tax [(2004) 265 ITR 562(SC)], Edayanal Constructions and Another v Income-Tax Officer and Another [(2007) 288 ITR 134 (Ker)]
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: GEORGE GEORGE
• Assessee Lawyers: C NAIR; DALE KURIEN
• Keywords: False statement; Income Tax; Penalty proceedings; Prosecution; Tax Evasion
• Section: 276CC; 276C; 277

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN MONDAY, THE 12TH JANUARY 2009 / 22ND POUSHA 1930 OP.No. 6081 of 2001(Y) ------------------------------ PETITIONER(S): ----------------------- 1. UPASANA HOSPITAL AND NURSING HOME, QUILON, REPRESENTED BY ITS MANAGING PARTNER DR. P.N.BHASKARAN. 2. DR. P.N.BHASKARAN, MANAGING PARTNER, UPASANA HOSPITAL AND NURSING HOME, QUILON. BY ADV. SRI.C.KOCHUNNY NAIR SRI.DALE P.KURIEN RESPONDENT(S): ------------------------- 1. THE INCOME-TAX OFFICER, B-WARD, THIRUVANANTHAPURAM. 2. THE CENTRAL BOARD OF DIRECT TAXES (CBDT) NEW DELHI. 3. THE STATE OF KERALA, REPRESENTED BY ITS CHIEF SECRETARY TO GOVERNMENT, THIRUVANANTHAPURAM. ADV. SRI.GEORGE K. GEORGE, SC FOR IT FOR R1 & 2 THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 12/01/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: OP.No. 6081 of 2001(Y) APPENDIX PETITIONERS' EXHIBITS: EXT.P1 - TRUE COPY OF THE COMPLAINT, C.C. NO. 57/88 FILED BY THE RESPONDENT NO.1 BEFORE THE ADDITIONAL CHIEF JUDICIAL MAGISTRATE COURT (E.O), ERNAKULAM FOR THE ASSESSMENT YEAR 1983-84. EXT.P2 - TRUE COPY OF THE ORDER DATED 26.3.1991 PASSED BY THE CIT (APPEALS) TRIVANDRUM, FOR THE ASSESSMENT YEAR 1983-84. EXT.P3 - TRUE COPY OF THE COMMON TRIBUNAL ORDER DATED 13.2.1992 IN THE I.T.A.NOS. 454 AND 455 (COCH)/1991 FOR THE ASSESSMENT YEARS 1983-84 AND 1984-85 PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH. EXT.P4 - TRUE COPY OF THE HEARING NOTE FILED BY THE COUNSEL FOR THE RESPONDENT IN C.C. NO. 57/88 BEFORE THE HON'BLE ADDITIONAL CHIEF JUDICIAL MAGISTRATE COURT(E.O.), ERNAKULAM. EXT.P5 - TRUE COPY OF THE JUDGMENT IN CRL. MISC. NO. 533/92 PASSED BY THE HON'BLE SUPREME COURT OF INDIA REPORTED IN (1993) 113 TAXATION 203(SC) DATED 22.10.1992. // TRUE COPY // PA TO JUDGE rhs S.SIRI JAGAN, J - - - - - - - - - - - - - - - - - - - - - - - O.P.No.6081 of 2001 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 12th day of January, 2009 J U D G M E N T In this original petition the challenge is against prosecution proceedings initiated by the Income Tax Department against the petitioners in respect of assessments for the assessment years 1983- 1984, 1984-1985, 1985-1986. Three allegations are made against the petitioner. The first is of willful attempt to evade tax by not filing returns for the said assessment years, which is stated to be an offence under Section 276C of the Income Tax Act. The second is failure to file returns which is an offence under Section 276CC. The third is that the petitioners made a false statement in the verification part of the return filed belatedly. It is stated to be an offence under Section 277. The contention of the petitioner is that, in respect of the same allegations, penalty proceedings were initiated by the department which were set aside in appeal by the Commissioner of Income Tax (Appeals) which was confirmed by the Tribunal. According to the petitioners, in view of the decision of the Supreme Court in K.C. Builders and Another v Assistant Commissioner of Income-Tax [(2004) 265 ITR 562(SC)] O.P.No.6081 of 2001 - 2 - and decision of this Court in Edayanal Constructions and Another v Income-Tax Officer and Another [(2007) 288 ITR 134 (Ker)], once penalty proceedings are set aside, no prosecution would lie. I am of opinion that these are all matters which the petitioners should bring to the attention of the court where prosecution proceedings are pending, which court is perfectly competent to appreciate the applicability of those decisions to the petitioners' case. Therefore, without prejudice to the right of the petitioners to raise all these contentions before the court where prosecution proceedings are pending, this writ petition is disposed of. In case, application for exemption from personal appearance is filed, the court trying the offences shall exempt the 2nd petitioner form personal appearance and decide the matter permitting the petitioner to be represented by advocate. S.SIRI JAGAN, JUDGE rhs "