TMI Blog1987 (8) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... property owned by the petitioner. By exhibit P-4 order, the Tax Recovery Officer, Calicut, came to the conclusion that the petitioner violated the provisions contained in rule 73(1)(a) and (b) of Schedule 11 to the Income-tax Act and, accordingly, ordered his detention in civil prison. By exhibit P-7 order, the Commissioner of Income-tax (Appeals) dismissed the appeal filed by the petitioner against exhibit P-4 order. By exhibit P-10, the Tax Recovery Officer informed the petitioner that proclamation for sale of his property will be settled on March 25, 1987. The learned single judge, after an elaborate survey of the entire facts and circumstances, came to the conclusion that the respondents were justified in finding that there has been a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment to sell the property was executed. Later, in October, 1984, a registered lease was executed and Smt. Jolly Thomas was put in possession of the property in pursuance thereof. The petitioner then received a sum of Rs. 3,00,000 from the lessee. He opened a new bank account with the Catholic Syrian Bank, Cherutty Road Branch, Calicut, and got the said amount deposited in it. Thereafter, he withdrew the entire amount for paying two of his alleged creditors, namely, Don Bosco Enterprises and Ittyavira. The receipt of the amount, the opening of the account with the Catholic Syrian Bank and the withdrawal of the amount for paying the two alleged creditors were kept secret from the income-tax authorities. On March 20, 1985, the petitioner infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... original petition with a direction to the Commissioner to pass a final order on the petitioner's application within one month from that day. By order dated June 24, 1986, the Commissioner of Income-tax refused to issue the certificate unless the petitioner paid the entire amount due as arrears of tax. That order was challenged before this court in 0. P. No. 4877 of 1986. This court, by judgment dated September 30, 1986, directed the Commissioner to reconsider the issue and observed: "There had not been a proper consideration of all the relevant materials. Exhibit P-5 appears to be arbitrary and unreasonable in view of that circumstance. It is necessary that the respondent is directed to reconsider the matter and dispose of the representa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for the petitioner after consulting his client who was present in court. These circumstances lead to the inference that the petitioner was trying to conceal the true nature of the dealings between him and Smt. Jolly Thomas from the Income-tax Department. The petitioner applied for the certificate under section 230A of the Income-tax Act on March 20, 1985. He had registered a lease deed in respect of his property, Bright House, in favour of Smt. Jolly Thomas in October, 1984. In pursuance of that lease deed, Smt. Jolly Thomas was put in possession of the property. The agreement to sell the property referred to earlier was also executed even earlier. The petitioner received Rs. 3,00,000 from Smt. Jolly Thomas. These facts were kept conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forth jenmam and tenancy rights over the property and they are also advancing claims on the amount in deposit. Thus, according to the Officer, nothing substantial will be left to liquidate the arrears of income-tax from the said compensation award. This conclusion of the Tax Recovery Officer was further scrutinised by the Commissioner of Income-tax in exhibit P-7 order and he has come to the same conclusion. Under the above circumstances, the learned single judge came to the conclusion that the petitioner had not disclosed to the Department the entire facts and the true facts in relation to his properties. We do not find any way to take a different view in the matter. As stated earlier, the petitioner did not inform the Department about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the agreement of sale as a shield against the Department when the Department tries to proceed against the property. In this view of the matter, we are of the opinion that the petitioner has dishonestly removed his property, Bright House, from the reach of the Income-tax Department as contemplated by rule 73(1)(a) of the Second Schedule to the Income-tax Act. As stated earlier, the appellant concealed the receipt of three lakhs rupees from the Department. His liability to pay the income-tax and wealth-tax arose not later than the close of the respective accounting years. The receipt of a substantial sum of Rs. 3,00,000 was after the liability to the Department came into existence. He failed to pay even a substantial portion of the arrea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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