TMI Blog2022 (2) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... bogus. When the Appellate Tribunal has factually recorded the finding that there was no suppression of facts and the assessee has originally disclosed the receipt of the sale property, merely claimed deduction it cannot be said that there was wilful evasion of Tax. As recorded by the Appellate Tribunal the disclosure has been made. There is no suppression of facts. Therefore, it cannot be said that merely exemption is claimed to the property and the investment has not been made, the wilful evasion cannot be presumed as the Appellate Tribunal has found that there was no suppression. Therefore, initiation of prosecution on the similar allegations is nothing but futile exercise. It is also to be noted that the land in question measuring around 3.9 acres. Merely on the statement it is situated in urban area and the agriculture was not carried out at the relevant point of time, it cannot be said that there was suppression. At any event considering the factual aspects which was dealt by the Income Tax Appellate Tribunal, this Court is of the view that the continuation of the prosecution is waste of time and futile exercise. Accordingly, the proceedings initiated in E.O.C.C.75 of 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,043/- and the Long Term Capital Gains of ₹ 1,89,97,630/- was not offered to tax by claim of exemption under Section 54B of ₹ 1,90,00,000/-. 2.d. Crl.O.P.No.4205 of 2017 : [E.O.C.C.No.78 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 ₹ 11,64,684/-. During the Financial Year 2009-10 relevant to assessment year 2010-11 the assessee sold lands at Neelangarai for a total consideration of ₹ 1,15,01,811/- and claimed exemption under Section 54 of ₹ 80,00,000/-. 2.e. Crl.O.P.No.4206 of 2017 : [E.O.C.C.No.79 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 ₹ 82,870/-. During the Financial Year 2009-10 relevant to assessment year 2010-11 the assessee sold lands at Neelangarai for a total consideration of ₹ 57,67,728/- and the Long Term Capital Gains of ₹ 54,97,837/- was not offered to tax by claim of exemption under Section 54B of ₹ 55,00,000/-. 2.f. Crl.O.P.No.4207 of 2017 : [E.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 of the complaint that but for the Survey, the incorrect claim of deduction would have been allowed unnoticed and exemption was claimed in the return of income filed on 29.03.2012 with mala-fide intention and the assessee had concealed taxable income and provided inaccurate particulars of income. Therefore, penalty proceedings under Section 271(1)(c) was initiated and penalty was ordered on 26.09.2014 which was challenged before CIT (Appeals)-4, Chennai, which was also dismissed confirming the penalty imposed under Section 271(1)(c). Consequent to the order of Commissioner of Income Tax (appeals) confirming the order of penalty for the Assessment Year 2010-11, a show cause notice was issued on 29.01.2016 as to why proseuction proceedings should not be initiated for wilful attempt to evade tax/penalty as enumerated under Section 276C of the Act. Hence, prosecution has been launched under Sections 276C and 277 of the Income Tax Act, by a private complaint by the Income Tax officers. 3. The learned Senior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 prosecution cannot be initiated. The Appellate Tribunal in its finding held that there was no false claim or bogus such claim is binding on the revenue and his contention is that there is no appeal whatsoever filed against the Income Tax Appellate Tribunal order. Hence submitted that the prosecution in this case is nothing but abuse of process of law. 5. He has also placed much reliance of the judgment of this court in Karti P. Chidambaram and another vs. Deputy Director of Income Tax [(2021) 1 MLJ (Crl.) 193] and the judgment of the Apex Court in K.C. Builders and Another vs. Assistant Commissioner of Income Tax [(2004) 2 Supreme Court Cases 731] 6. Whereas the learned Special Public Prosecutor (Income Tax) Mr.L. Muralikrishnan appearing for the Respondent submitted that Section 54 of the Income Tax Act required two conditions to be satisfied by the Assessees to claim exemption. The land sold must be agricultural property and the same has to be invested for the purchase of the property. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn 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 activities carried out on that land. Such statement recorded by the Income Tax Officer triggered the prosecution for the wilful evasion of the tax. It is not disputed by the Respondent that sale consideration has been properly set out in their original returns. However, they claimed exemption under Section 54B of the Income Tax Act towards capital gain. It is also not disputed that the Survey was conducted under Section 133A of the Act on 13.09.2012 and the notice was issued on 25.10.2012. Thereafter revised return was filed by the assessee on 27.12.2012. Revised return of income filed after excluding the incorrect claim of deduction under Section 54B. It is also not disputed that the differential amount of tax has been paid by the assessee. Assessment order was subsequently passed and the same was challenged before the Commissioner of Income Tax (Appeals) with delay. However, the same was dismissed. Thereafter Appellate Tribunal set aside the above order and remitted the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 property. The AO observed that just because the assessee has remitted the demand raised by the Department, it cannot be a reason for levying the penalty. However, he has not found the claim of the assessee that the assessee has handed over the money to M/S Alpha Commercial for investment in residential property. Further, when the assessee has given explanation that he has given money to Alpha Commercials for the purpose of investment in residential house, it is the duty of the AO to examine the records of M/S Alpha Commercials to find out whether, the claim of the assessee is genuine or not. The AO without making investigation, cannot presume that the explanation given by the assessee is false or bogus. In the present case, the assessee submitted a detailed explanation before the AO. Thereafter, it is the duty of the AO to establish that the assessee has concealed income or furnished inaccurate particulars of income. In the present case, the AO has accepted the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 Company and that finding has been set aside by the Income-tax Appellate Tribunal. If that is the position then we are unable to see as to how criminal proceedings can be sustained. 15. In Commissioner of Income Tax, Mumbai vs. Bhupen Champal Lal Dalal Another [(2001) 3 SCC 459] the Apex Court has held as follows: 3. The prosecution in criminal law and proceedings arising under the Act are undoubtedly independent proceedings and, therefore, there is no impediment in law for the criminal proceedings to proceed even during the pendency of the proceedings under the Act. However, a wholesome rule will have to be adopted in matters of this nature where courts have taken the view that when the conclusions arrived at by the appellate authorities have a relevance and bearing upon the conclusions to be reached in the case necessarily one authority will have to await the outcome of the other authority. 4. This Court in G.L.Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 exoneration in adjudication proceeding is on technical ground and not on merit, prosecution may continue; and (vii) In case of exoneration, however, on merits where allegation is found to be not sustainable at all and person held innocent, criminal prosecution on the same set of facts and circumstances can not be allowed to continue underlying principle being the higher standard of proof in criminal cases. 17. Considering the above postion, when the Tribunal has held that the Assessing Officer has presumed that the claim is bogus or false without making any enquiry. It is not the case of the Assessing Officer that the Claim is false or bogus. The Assessing Officer has not examined the claim of assessee and found whether they have given money to M/s. Alpha Commercials for the purpose of investment in the property. In the absence of any materials the Assessing Officer has presumed that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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