SOFFIA SOFTWARE LTD Vs. KALPAGAM BHASKARAN

JUDGEMENT

(1.) COMMON Order: The petitioners, who are the firs and second accused in E.O.C.C.No,594 of 2002 on the file of the Additional chief Metropolitan Magistrate (E.O.1), Egmore, Chennai, wherein, they are facing trial for the alleged offences under sections 276 AB read with 269 UC and 269 UL (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 25.01.2001 and 27.03.2001, 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 1200 sq. ft. with the building thereon having built up area of 3400 sq.ft. bearing Municipal Door No.AH 151, 3rd street, Anna Nagar, Chennai - 40, was sold by the first accused to the fourth accused for a consideration of Rs.20 lakhs each totalling Rs.40 lakhs, with wilful intention to evade the legal obligations to be performed as required under Chapter XX-C of the Income Tax Act, 1961 and they have subjected the impugned property which is one single unit by two sale deeds of absolute sale for a total consideration of Rs.40 lakhs. b) The first accused to the fourth accused ought to have entered into an agreement for the sale of the aforesaid property the apparent consideration of which exceeds Rs.25 lakhs and filed Form 37-I as required under Section 269 UC of the Act within the statutory time limit prescribed thereunder, thereby the accused 1 to 4 have contravened the provisions of Section 269 UC of the Act and committed an offence under Section 276 AB of the Act. c) Accused 1 to 4 ought not to have completed the sale transaction without obtaining 'No Objection Certificate' from the complainant as required under Section 269 UL (2) of the Act, thereby they committed an offence punishable under Section 267AB of the Act. d) Accused 1 to 4 have prevented the complainant, Appropriate Authority from exercising its pre-emptive right of purchase of the impugned property as provided under Section 269 UD of the Act. e) Though there are two sale deeds, the property transferred is one single unit for a consideration of Rs.40 lakhs and therefore, the provisions of Chapter XX-C of the Act clearly applies to the said transaction and the accused have contravened the provisions of Section 269 UC and Section 269UL (2) of the Act, which is punishable under Section 276 AB of the Act.

(3.) LEARNED senior counsel for the petitioners made the following submissions: (a) that the property was sold by the petitioners under two sale deeds for a consideration of Rs.20 lakhs each, which is below the prescribed limit of Rs.25 lakhs as provided under Section 269 UC and the property conveyed under each sale deed is not a single unit property as alleged by the complainant, but it is different and 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 269 UC. (b) that to proceed under Section 276 AB 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 276 AB, 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 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 269 UC 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 therefore, the complaint has to be quashed. (d) Section 269 UC requires that no transfer of immovable property of specific value shall be effected except in accordance with the said section immovable property is defined under Section 269 UA to include any land and building including any right therein hence any right, title or interest in the immovable property is also included within the definition of immovable property hence undivided interest in the immovable property is recognised as immovable property for the purpose of section 269 UC any specific undivided interest in a property by any document which is legally executed and which has been accepted for registration by the registering authority would constitute immovable property the Registering Authority who is aware of the provisions of Chapter XX-C and is an authority appointed by the Government has accepted the transaction and registered the transaction of sale consequently it is not open to the complainant to take the stand that there is a contravention of Section 269 UC such an act would be violative of the stand taken by another authority of Government which is competent to act in the matter the complaint is hence totally malafide and is intended only to harass the petitioners. (e) the complaint is based on the averment that the two transactions of sale under two different documents of sale executed on 25th January 2001 and 27th March 2001 should be deemed to be a single transaction and combined value of the two properties sold under two documents of sale should be taken for the purpose of Section 269 UC this stand is totally untenable in law and is in fact opposed to law the two documents are legal documents accepted and registered by the Appropriate Authority under law each document conveys a different property thereunder hence it is against law to assume that two different documents constitute a single document. (f) the two documents of sale have been registered by the Registering Authority who has accepted the transactions as legally valid, just and proper if there is a contravention of Section 269 UC, the Registering Authority is equally responsible for the same the very fact that the complaint has not arrayed the Registering Authority among the accused clearly shows that the complaint is filed with malafide intention, with a view to harass the accused named in the complaint. (g) the complaint is filed on 29th June 2002, while Chapter XX-C itself has been deleted by the Finance Act of 2002 with effect from 01.07.2002 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 under-valuation of the property with a view to evade tax even after the issue of the notice under section 269 UC, an order of purchase has not been made by the complainant this establishes that there is no under-valuation of the property in these circumstances, the complaint is wholly untenable. (i) that the show cause notice issued to accused 1 to 3 relates to some other property and not related to the property mentioned in the complaint and on that ground the complaint is not sustainable.