TaxTMI 
TaxTMI 
2022 (2) TMI 48
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....sment year 2010-11 the assessee sold lands at Neelangarai for a total consideration of Rs. 2,07,21,676/- and the Long Term Capital Gains of Rs. 1,53,94,194/- was not offered to tax by claim of exemption under Section 54B of Rs. 1,60,00,000/-. 2.b. Crl.O.P.No.4203 of 2017 : [E.O.C.C.No.76 of 2016] The allegation in the complaint are that the petitioner has filed Return of Income for the Assessment Year 2010-11 on 29.03.2012 returning a total income of Rs. 5,14,970/-. During the Financial Year 2009-10 relevant to assessment year 2010-11 the assessee sold lands at Neelangarai for a total consideration of Rs. 1,06,35,625/- and the Long Term Capital Gains of Rs. 97,65,620/- was not offered to tax by claim of exemption under Section 54 of Rs. 1,00,00,000/-. 2.c. Crl.O.P.No.4204 of 2017 : [E.O.C.C.No.77 of 2016] The allegation in the complaint are that the petitioner has filed Return of Income for the Assessment Year 2010-11 on 29.03.2012 returning a total income of Rs. 7,31,554/-. During the Financial Year 2009-10 relevant to assessment year 2010-11 the assessee sold lands at Neelangarai for a total consideration of Rs. 2,19,691,043/- and the Long Term Capital Gains of Rs. 1,89,97,63....
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.... at Neelangarai for a total consideration of Rs. 1,93,45,922/- and the Long Term Capital Gains of Rs. 1,60,00,000/- was not offered to tax by claim of exemption under Section 54F of the Income Tax Act, 1961. 2.i. Survey under Section 133A was conducted on 13.09.2012 at the business premises of the firms M/s. Alpha Commercials and M/s. Alpha Realty which are family concerns managed by the assessees. As per the statement recorded during the course of survey from the assessees, it was confirmed that the claims of deduction against Capital Gains made by all the family members in their respective returns of income are incorrect. Therefore, the assessment was reopened under Section 147 for Assessment Year 2010-11 by issuing of Notice under Section 148 on 25.10.2012. 2.j. The assessees have filed a revised return of income on 27.12.2012 after excluding the incorrect claim of deduction under Section 54B/54F. The act of withdrawal of deduction undere Section 54B/54F was not voluntarily undertaken by the assessees and it was done consequent to the survey under Section 133A. The assessment was completed under Section 143(3) on 08.03.2014 by assessing the taxable income. 2.k. It is the case....
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....me Tax Appeals examined the claim of the assessees that whether the assessees have given money to M/s.Alpha Commercials for the purpose of investment in the property and observed that the assessing officer has not found the claim of the Assessee that the Assessee has not handed over the money to M/s. Alpha Commercials for investment in properties. The Assessing Officer has not examined the records of M/s. Alpha Commercials to find out whether the claim of the Assessee is genuine or not. Without making investigation the Assessing Officer cannot presume that the explanation given by the Assessee is false or bogus. The detailed explanation submitted before the Assessing Officer was not examined by him and set aside the entire penalty proceedings. The Appellate Tribunal has also recorded a finding that the Assessee has originally disclosed the details of receipts from sale of property at Neelankarai and also claimed deduction under sections 54F/54B of the Act. The amount is also paid by the Assessees. Taking note of the fact that without any investigation A.O. cannot presume the explanation is false or bogus. Hence it is his submission that once the penalty proceedings are set aside pr....
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....e Tax [(2004) 2 Supreme Court Cases 731] not approved by the Three Judges Bench. He has also relied upon the Judgment of this court in N. Athimoolam v. Income Tax Officer [[2010] 327 ITR 603 (Madras)]. 8. I perused the entire materials. 9. Paragraph 8 of the complaint makes it very clear that the prosecution itself is initiated on the basis of the penalty proceedings. The show cause notice was issued after the penalty proceedings were confirmed by the Commissioner of Income Tax in appeals. Show Cause Notice dated 29.01.2016 was issued to the assessees to show as to why prosecution proceedings should not be initiated against them for wilful attempt to evade tax/penalty as enumerated u/s276C of the Act. In nutshell only the penalty proceedings triggered the initiation of the prosecution as per the complaint. It is not in dispute that the Survey under Section 133 was conducted on 13.09.2012 wherein one of the assessee said to have given a statement that he has filed return claiming exemption because of his ignorance about the law and the incorrect advice given by the auditor. The land is roughly 3.9 Acres owned by 13 members. Land is urban land and there was no agricultural activiti....
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....ssee has originally disclosed the details of receipts from sale of property at Neelankarai and also claimed deduction u/s.54F/54B of the Act, and it is also not disputed that the assessee has paid the money to M/S. Alpha Commercials, where one of the co-owners of the property was a partner therein. The assessee had a bona fide belief that M/S Alpha commercials, according to mutual agreement, invested the money in residential property so as to facilitate the assessee to have benefit u/s.54F/54B of the Act. However, the Assessing Officer has not considered the explanation offered by the assessee as bona fide and he simply rejected the explanation by saying that the assessee has made a wrong claim in the original return of income and failed to disclose all material facts truly and wholly. According to the AO, had it been there is no survey, the assessee's claim would have been gone unnoticed. However, it is not the case of the AO that the assessee's claim was false or bogus. Neither the AO nor the Commissioner of Income-tax (Appeals) examined the claim of the assessee that whether the assessee has given money to M/S Alpha Commercials for the purpose of investment in residential proper....
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....ra) may require for reconsideration as the reasoning appears to run counter to the one adopted by the Constitution Bench. It is relevant to note that the above three Judges Bench [Standard Chartered Bank's case (supra)] the matter arising out of the FERA, only in considering the scheme of the FERA Act, the Apex Court has held that Adjudication and Prosecution are distinct and separate. 13. In Radheshyam Kejriwal vs. State of West Bengal and Another [(2011) 3 Supreme Court Cases 581] though it is a three judges bench majority judges have held that even under Foreign Exchange Regulation Act finding of fact in adjudication proceedings is relevant in criminal proceedings and the prosecution would be unjust and an abuse of process of the court. 14. In G.L. Didwania & Another vs. Income Tax Officer and Another [1995 Supp (2) SCC 724] the Honourable Supreme Court has held as follows: "4. In the instant case, the crux of the matter is attracted and whether the prosecution can be sustained in view of the order passed by the Tribunal. As noted above, the assessing authority held that the appellant-assessee made a false statement in respect of income of Young India and Transport Compa....
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....d postponement or adjournment of a proceedings for unduly long period on the ground that another proceedings having a bearing on the decision was not proper. 16. In Radheshyam Kejriwal vs. State of West Bengal and Another [(2001) 3 SCC 581] the Honourble Apex Court has held as follows: "38. The ratio which can be culled out from these decisions can broadly be stated as follows :- (i) Adjudication proceeding and criminal prosecution can be launched simultaneously; (ii)Decision in adjudication proceeding is not necessary before initiating criminal prosecution; (iii)Adjudication proceeding and criminal proceeding are independent in nature to each other; (iv)The finding against the person facing prosecution in the adjudication proceeding is not binding on the proceeding for criminal prosecution; (v) Adjudication proceeding by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20 (2) of the Constitution or Section 300 of the Code of Criminal Procedure; (vi)The finding in the adjudication proceeding in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exonera....