TMI Blog2009 (12) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... ution - 21624 and 21621 of 2002 - - - Dated:- 21-12-2009 - K. MOHAN RAM J. V. Ramachandran for Ms. Anitha Sumanth for the petitioners. Ramasamy K, for the respondent. JUDGMENT K. MORAN RAM J. - The petitioners, who are the first and second accused in E. O. C. C. No. 594 of 2002 on the file of the Additional Chief Metropolitan Magistrate (E. O. I), Egmore, Chennai, wherein, they are facing trial for the alleged offences under sections 276AB read with 269UC and 269UL(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), have filed the above criminal original petitions seeking to quash all further proceedings therein. 2. A perusal of the complaint filed by the respondent against the petitioners and others reveals the following allegations: (a) By two sale deeds, dated January 25, 2001 and March 27, 2001, the property situated at plot No. 3093 in Aringnar Anna Nagar Scheme, comprised in Block No. 1D, T. S. No. 294, R. S. No. 26 (Pt Naduvankarai Village, Anna Nagar measuring an extent of one ground and 1,200 sq. ft. with the building thereon having built up area of 3,400 sq. ft. bearing Municipal Door No. AH 151, 3rd street, Anna Nagar, Chenna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd separate property and there is no basis or justification for the Appropriate Authority to club the two distinct and separate transactions as one to bring such transaction under section 269UC. (b) that to proceed under section 276A13 against the accused, the provisions contained in section 279 of the Act does not confer any power to an individual member of the Appropriate Authority to file a complaint under section 276AB, but it confers power on the whole body of the Appropriate Authority consisting of three members, whereas the above complaint has been filed by a single member, which is against law and therefore, on that ground alone, it should be quashed. (c) that in the complaint it is stated that accused Nos. 1 to 4 executed two different sale deeds in respect of two different properties with a view to avoid legal obligation under Chapter XX- C of the Act, which is untenable for the reason that the property transferred under each deed of sale was less than Rs. 25 lakhs, which would not amount to violation of section 269UC as the section comes into play when a single unit of property was sold for Rs. 25 lakhs, whereas the facts in this case is otherwise and there fore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (g) the complaint is filed on June 29, 2002, while Chapter XX-C itself has been deleted by the Finance Act of 2002 with effect from July 1, 2002, hence the complaint has been filed in a haste and with a view to beat time and harass the accused; this also vitiates the complaint. (h) the object of Chapter XX-C is to prevent the evasion of tax; there is no averment that there is undervaluation of the property with a view to evade tax; even after the issue of the notice under section 269UC, an order of purchase has not been made by the complainant; this establishes that there is no undervaluation of the property; in these circumstances, the complaint is wholly untenable, (i) that the show-cause notice issued to accused Nos.1 to 3 relates to some other property and not related to the properly mentioned in the complaint and on that ground the complaint is not sustainable. 6. On the aforesaid submissions, the learned special public prosecutor for the income-tax cases was heard. 7. Learned special public prosecutor submitted that the property sold by the accused is a single unit property and to avoid the legal obligation, the accused sold the same by splitting the same into two u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immovable property is also included within the definition of immovable property and therefore undivided interest in the immovable property is recognised as immovable property for the purpose of section 269UC and therefore such undivided interest is capable of being transferred and there fore there is no violation of section 269UC is untenable. He also submitted that simply because the registering authority has accepted the two sale deeds and registered the same, it does not mean that the accused have not contravened section 269UC of the Act; similarly, he submitted that simply because the registering authority has not been prosecuted, it does not mean that the accused cannot be prosecuted. He further submitted that there is no provision under the Act to prosecute the registering authority under section 276AB of the Act. If the contention of the learned senior counsel for the petitioners is to be accepted, then, everybody can spilt up a single unit of immovable property into several undivided shares and transfer the same under different sale deeds and defeat the very purpose and the object of section 269UC of the Act and therefore submitted that splitting a single unit into several ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s than Rs. 25 lakhs and that, therefore, the provisions of Chapter XX-C would not apply. We should add that even if the agreement of transfer had been so drawn as to show the transfer of the equal shares of the second and third respondents in the said immovable property, our conclusion would have been the same for, looked at realistically, it was the said immovable property which was the subject of the transfer." 9 Learned special public prosecutor by referring to the contention of the petitioners that the complaint has been filed in a haste on June 29, 2002, while Chapter XX-C itself has been deleted by the Finance Act of 2002 with effect from July 1, 2002, is concerned, submitted that even if the complaint ad been filed after the repealing of the said Chapter in respect of the offences committed while the Act was in force, prosecution can be launched even after the repealing of the Act and therefore there is no substance in the contention that the complaint has been filed in a haste. He further submitted that for prosecuting a person for violation of the provisions contained in section 269UC under section 276AB of the Act, there e not be undervaluation of the property in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id down in Appropriate Authority v. Smt. Varshaben Bharatbhai Shah [2001] 248 ITR 342 (SC) by the apex court is applied to the facts of this case, it could be seen that the immovable property, which is subjected for sale, is the entire property belonging to the first accused. To circumvent the provisions of Chapter XX-C, the said immovable property has been divided into two equal undivided shares and each such undivided share has been transferred under the aforesaid two sale deeds dated January 25, 2001 and March 27, 2001 respectively. This is precisely what is sought to be prevented by Chapter XX-C of the Act. If the immovable property as a single unit had been transferred by the first accused to the third accused, then automatically Chapter XX-C of the Act is attracted and since the apparent sale consideration will exceed the limit prescribed and automatically the vendor and the vendee ought to have filed Form 37-I and sought for no objection certificate from the Appropriate Authority. On the other hand, if certain unit is divided into two undivided halfs and the same is sold under two different sale deeds, then the apparent consideration will fall within the prescribed limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice is issued by the Appropriate Authority for exercising its option to purchase the property and not for prosecuting the person for violating section 269UC of the Act. 16. A reading of section 276AB of the Act does not show that there is any need to issue any show-cause notice before filing the complaint. Similarly, section 279 of the Act also does not contemplate the issue of any show-cause notice. A reading of section 269UD(1A), which reads as follows: "269UD. Order by Appropriate Authority for purchase by Central Government of immovable property.- ..(1A) Before making an order under sub-section (1), the Appropriate Authority shall give a reasonable opportunity of being heard to the transferor, the person in occupation of the immovable property if the transferor is not in occupation of the property, the transferee and to every other person whom the Appropriate Authority knows to be interested in the property." shows that before making an order under sub-section (1) of section 269UD of the Act by the Appropriate Authority for purchase of the immovable property, an opportunity of hearing should be accorded to the transferor etc., which includes a show-cause notice. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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