TMI Blog1993 (8) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... pursuance of criminal complaints which have been filed against the petitioners. The facts are common to all these petitions. The petitioners in each of these petitions were originally the tenants of various premises in a building known as Shikhar Kunj situated at 29A Carmichael Road, Bombay-400 026, which was owned by one Sahu Brothers (Saurashtra) Pvt. Ltd. The share capital in this company was held by some of the tenants. Each of the petitioners was paying a monthly rent to the said company. The premises were covered by the Bombay Rents Hotel and Lodging House Rates (Control) Act, 1947. The said company entered into an agreement dated March 10, 1966, with another company known as Carmichael Properties Pvt. Ltd. for the sale of its entir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the year 1971 and the tenants purchased the flats so allotted to them on payment of the agreed price as per the agreement of January 7, 1966. Each of the tenants who are the petitioners before us in these petitions had filed their wealth-tax returns for the assessment years 1966-67 to 1971-72. In the original wealth-tax returns filed by the petitioners they had not disclosed their tenancy rights in the said building as an asset liable to wealth-tax. Between March 27, 1975 and February 16, 1978, notices were issued to them under section 17 of the Wealth-tax Act for reopening wealth-tax assessment of the petitioners for the assessment years 1966-67 to 1971-72. Between October 27, 1976, and June 16, 1978, the petitioners filed fresh wea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 18(1)(c) against the petitioners for the assessment years 1966-67 to 1971-72. The petitioners filed appeals before the Commissioner (Appeals). They pointed out that they did not include the value of the said asset in their returns of wealth-tax in the bona fide belief that this did not constitute, in law, an asset for the purposes of wealth-tax. And hence there was no concealment of any asset on their part. The Commissioner (Appeals) accepted the contention and held that the appellants did not conceal their wealth or furnish inaccurate particulars thereof within the meaning of section 18(1)(c) of the Wealth-tax Act. He cancelled the penalty levied for all these years. The Department filed appeals before the Income-tax Tribunal. These ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs in the Court of the Metropolitan Magistrate, Esplanade, Bombay, in respect of the offences alleged to have been committed by the petitioners under sections 35A(1) and 35D of the Wealth-tax Act. Section 35A(1) states that if a person wilfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act, he shall be punishable with imprisonment and fine as set out in that section. Section 35D provides that if a person makes a statement in any verification under this Act (other than section 34AB) or under any rule made thereunder, which he either knows or believes to be false, or does not believe to be true, he shall be punishable as provided in that section. Both these sections require a wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reference under the Income-tax Act cannot come in the way of the institution of criminal proceedings under section 276C or section 277 of the Income-tax Act. This decision in our view does not help the Department in any manner because in the present case, looking to the circumstances which are before us, not even a prima facie case of any offence having been committed under section 35A(1) and section 35D is made out; and we do not see why the petitioners should have to suffer the harassment of a criminal prosecution which is ultimately bound to fail. Our attention was also drawn to the observations of the Allahabad High Court in the case of Shiv Shanker Sitaram v. ITAT [1987] 168 ITR 275. The Allahabad High Court found that the submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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