RASIK RAMJI KAMANI Vs. S I TRIPATHI

JUDGEMENT

(1.) RULE returnable forthwith. Shri Jetley for respondents waives service. Heard counsel.

(2.) BY this petition filed under article 226 of the Constitution of India, the petitioner is challenging the order dated November 23, 1989, passed by the Income-tax Settlement commission under section 245ha of the Income-tax Act, 1961, and under section 22ha of the wealth-tax Act, 1957. The petitioner had filed Income-tax and wealth-tax applications under section 245c (1) of the Income-tax Act and section 22c (1) of the Wealth-tax Act on July 22, 1976. The application was admitted for income-tax and wealth-tax on December 15, 1976. For income-tax, the application was admitted for the assessment years 1974-75 and 1975-76, while, in respect of wealth-tax, the application was admitted for the assessment years 1973-74 to 1975-76. On admission of the applications, the petitioner was directed to file statements of facts on December 24, 1976, and December 27, 1976, for Income-tax and wealth-tax, respectively. The petitioner files statements on March 7, 1978, and reserved his right to make alterations and additions as subsequently deemed necessary.

(3.) THE petitioner belonged to the Kamani family which is in charge of several Indian companies. The family created specific foreign assets for which a very broad, general and rudimentary account was given by the petitioner. The petitioner claimed that the foreign exchange position in the country deteriorated progressively from 1955 onwards and the taxation went on increasing with several restrictions. With these constraints, the Kamani group decided to have a second line of defence for its security and even with full knowledge that to acquire or possess any valuable assets outside India without obtaining permission under Foreign Exchange, Income-tax and other central Acts would be illegal, the Kamani group created legal agencies on its behalf in foreign countries but scrupulously avoided having any direct involvement with the companies set up abroad. Initially, the scheme was implemented by the elder brother of the petitioner, but after his death, the petitioner continued to operate the foreign assets. The group formed five foreign companies and appointed foreign nationals as directors. The companies were formed for the benefit of Kamani Group and members of the Kamani family used to receive the profits made by the companies. Subsequently, there were allegations regarding misappropriation of the foreign company funds by the foreign directors and thereupon certain suits were filed in the foreign countries against the directors on the ground that they were holding assets as trustees for the kamani family. As general information about these companies was furnished without disclosing the particulars, the petitioner was called upon to furnish particulars. The petitioner filed a supplementary statement of facts on December 1, 1983, but that was also totally inadequate.