TaxTMI 
TaxTMI 
2011 (4) TMI 865
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....treated as assessees in default in view of sub-section (7) to section 220 of the Income-tax Act, 1961 (for brevity, 'the Act'). 2. Though the facts are almost similar, yet for the sake of clarity, the factual matrix in the two cases may be noticed separately. Ravina and Associates Private Limited 3. Ravina and Associates Private Limited, incorporated on 22-7-1987, was/is engaged in the business of providing technical support services to Russian companies. For the assessment years 2004-05 and 2005-06, Income-tax returns were filed by the said petitioner company declaring income of Rs. 31,77,400 and 49,97,160 on 31-10-2004 and 31-10-2005, respectively. 4. Notice for reopening under section 148 of the Act dated 22-5-2006 were issued for the assessment years 2004-05 and 2005-06. 5. It is accepted and admitted that Ravina and Associates Private Limited had received and accredited sum of Rs. 108,39,46,971 during financial years 2004-05 to 2006-07 under the agreements entered into with M/s Techno Prom Export, Moscow, Russia. 6. The said proceeds had been deposited in NatWest Bank, London and were not brought to India. 7. Central Bureau of Investigation had registered ....
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....ore than $ 20.7 million was paid by the Russian company to Ravina and Associates Private Limited as a percentage of the contract value. 11. The contention of the respondents both CBI as well as the Income-tax Department is that Ravina and Associates Private Limited did not include the commission payments in their declared returns of income till the registration of the case by the CBI on 6-3-2006. The revised returns or statement of accounts were filed by Ravina and Associates Private Limited after the registration of the case. The allegation of the CBI is that the money received by Ravina and Associates Private Limited is corruption/bribe money meant to be transferred to public servants and, therefore, is liable to be confiscated. These, it is alleged, are illegal kickbacks. Investigations have further revealed that certain amounts were transferred to one M/s Prime Services International Ltd., at Riga, Latvia. There is also allegation that Ravina and Associates Private Limited had transferred funds to certain persons/firms in few other countries. The investigations for tracing out these funds are in progress. 12. For the sake of convenience it may be appropriate to reproduce ....
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....1730 2. 2001-02 2000-01 12-2-2007 13017618 4532911 3. 2002-03 2001-02 12-2-2007 3862130 1150193 4. 2003-04 2002-03 12-2-2007 1336890 388570 5. 2004-05 2003-04 12-2-2007 11079890 3622264 The self assessment tax was not paid. 14. These returns were filed after the period of filing of revised returns under section 139(5) of Act had expired and, therefore, proceedings for re-opening of assessment under section 147 of Act were initiated against the said assessee. Ravina Khurana vide her reply dated 12-7-2007 submitted that she was the regional representative of M/s Intersputnik International Organization of Space Communications in India and she had received retainership fees from them. She had also received receipts by way of bank interest, miscellaneous receipts and salary from Airoflot Tour India Pvt. Ltd., during these years. In response to the notice under section 147, Ravina Khurana had declared a bank balance of Rs. 6,83,31,926 as on 31-3-2000 in NatWest Bank, London, whereas in the original return for the relevant assessment year 1999-2000, no closing balance was shown. The investigations have further r....
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....ings. 18. The contention of the two petitioners that the Income-tax department should recover the taxes due along with interest from the bank account at NatWest Bank, London, on the basis of the principles of equity and fair play, has no merit. The conduct of the two petitioners has already been referred to and hardly justifies exercise of equitable and discretionary jurisdiction in their favour. The petitioners do not have any regard for law. Further, the money in the NatWest Bank, London is subject matter of the restraint order passed by the court of U.K. on the letter of rogatory of the Special Judge, Delhi. The petitioner may not have any right to claim the said money if it is corruption or bribe money. The said money may be forfeited under the foreign exchange law or Prevention of Corruption Act or Money Launderings Act etc. The facts of the present case do not compel and commend us to accept the contention of the petitioners. 19. The last question, which arises for consideration, is the effect of sub-section (7) of the section 220 of the Act and whether it comes to the protection and aid of the petitioners. The said section reads as under :- "7. Section 220 : When ta....