R. Rajagopalmember-I, Appellate Authority Income Tax Departmentchennai - 600 034 v. V.n. Sudhagaran2. M/S. Anjaneya Printers (P) Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS Reserved on : 30.09.2015Pronounced on : 04-11-2015 Coram : THE HONOURABLE MR. JUSTICE B. RAJENDRAN Criminal Revision Case Nos. 967, 1553 and 1554 of 2004 R. RajagopalMember-I, Appellate Authority Income Tax DepartmentChennai - 600 034.. Petitioner in all the CriminalRevision Cases Versus Smt. S. Ramayamma.. Respondent in Crl.RC 9671. Smt. N. Sasikala2. Smt. J. Elavarasi3. M/s. J.S. Housing Development represented by its Partner Smt. N. Sasikala No.36, Poes Garden Chennai - 600 086..Respondents in Crl.RC 1553 1. V.N. Sudhagaran2. M/s. Anjaneya Printers (P) Ltd., represented by its Chairman Shri. V.N. Sudhagaran Son of T.V. Vivekanandan No.69, Habibullah Road T. Nagar, Chennai - 600 017..Respondents in Crl.RC 1554 Crl.R.C. No. 967 of 2004:- Criminal Revision Case filedunder Section 397 and 401 of Criminal Procedure Code praying tocall for the records relating to EOCC No.239 of 1999 on thefile of the Additional Chief Metropolitan Magistrate (EO-1),Egmore, Chennai - 600 008 and set aside the impugned order ofdischarge passed by the Additional Chief MetropolitanMagistrate (EO-1), Egmore, Chennai - 600 008 on 12.03.2004 inCrl.M.P. No. 770 of 2001 in EOCC No. 239 of 1999. Crl.R.C. No. 1553 of 2004:- Criminal Revision Case filedunder Section 397 and 401 of Criminal Procedure Code praying tocall for the records relating to EOCC No.239 of 1999 on thehttps://hcservices.ecourts.gov.in/hcservices/file of the Additional Chief Metropolitan Magistrate (EO-1),Egmore, Chennai - 600 008 and set aside the impugned order ofdischarge passed by the Additional Chief Metropolitan Magistrate (EO-1), Egmore, Chennai - 600 008 on 12.03.2004 inCrl.M.P. No. 2806 of 2003 in EOCC No. 239 of 1999. Crl.R.C. No. 1554 of 2004:- Criminal Revision Case filedunder Section 397 and 401 of Criminal Procedure Code praying tocall for the records relating to EOCC No.239 of 1999 on thefile of the Additional Chief Metropolitan Magistrate (EO-1),Egmore, Chennai - 600 008 and set aside the impugned order ofdischarge passed by the Additional Chief MetropolitanMagistrate (EO-1), Egmore, Chennai - 600 008 on 12.03.2004 inCrl.M.P. No. 206 of 2003 in EOCC No. 239 of 1999. All these Criminal Revision Cases are filed by the IncomeTax Department aggrieved by the common order dated 12.03.2014passed by the learned Additional Chief Metropolitan Magistrate,Egmore, Chennai. By the said order dated 12.03.2004, thepetitions filed by the respondents herein for discharging themfrom the purview of Criminal Prosecution has been allowed. Asthe criminal revision cases are filed against a common orderand common argument has been advanced by counsel for bothsides, these Criminal Revision Cases are taken up and aredisposed of by this common order. 2.1 Thecaseoftheprosecution/revisionpetitioner/complainant is that one Ramayamma (in short "TheVendor") has sold the property situated at No.1/1, Luz Avenue,Chennai - 600 004 in favour of the respondents in Crl.R.C. Nos.1553 and 1554 of 2004 (in short the purchasers) by executingsix sale deeds during March 1995 in their favour thereby shetransferred 1/6th of undivided share of the aforesaid propertyfor a sale price of Rs.9,00,000/- each having a total saleconsideration of Rs.54,00,000/-. It is claimed by the vendorhttps://hcservices.ecourts.gov.in/hcservices/that out of the sale price of Rs.54,00,000/-, a sum ofRs.44,00,000/- has been remitted to the account of Indian Bankto discharge the debt and the balance sum of Rs.10,00,000/- has 2.1 Thecaseoftheprosecution/revisionpetitioner/complainant is that one Ramayamma (in short "TheVendor") has sold the property situated at No.1/1, Luz Avenue,Chennai - 600 004 in favour of the respondents in Crl.R.C. Nos.1553 and 1554 of 2004 (in short the purchasers) by executingsix sale deeds during March 1995 in their favour thereby shetransferred 1/6th of undivided share of the aforesaid propertyfor a sale price of Rs.9,00,000/- each having a total saleconsideration of Rs.54,00,000/-. It is claimed by the vendorhttps://hcservices.ecourts.gov.in/hcservices/that out of the sale price of Rs.54,00,000/-, a sum ofRs.44,00,000/- has been remitted to the account of Indian Bankto discharge the debt and the balance sum of Rs.10,00,000/- has been received by her in cash. Thereafter, a search wasconducted under Section 132 of the Income Tax Act, 1961(hereinafter referred to as "The Act") in the residence of thevendor. During the course of such raid, certain documents weresaid to have been seized by the department, based on which, theprosecution claimed that the sale value of the property sold bythe vendor is nearly Rs.130 lakhs and it was grossly under-valued as Rs.54,00,000/- to evade payment of tax. Therefore,on 16.10.1996, a show cause notice was issued by the Departmentunder Section 158 BCX of the Act calling upon the vendor toshow cause as to why action should not be initiated underSection 276 AB of the Act for contravening the provisions ofSection 269 UC of the Act for the transactions effected by herfor the Assessment years 1987 to 1988 to 1996-1997. Similarnotices have been issued to the purchasers/respondents hereinon 22.10.1996 stating that no immovable property of the valueexceeding Rs.10,00,000/- should be transferred without anagreement for transfer and by submitting Form 37-I and Rule 48L of the Income Tax Rules, 1962. A reply was sent by thepurchasers/respondents stating that each of them have onlypurchased 1/6th of undivided share of the property for aconsideration of Rs.9,00,000/- and therefore there is no legalobligation cast on them to get the No Objection Certificate northe appropriate authority could assume jurisdiction under theprovisions of the Act. 2.2. Notwithstanding such explanation offered by thevendor as well as the purchasers, who are respondents herein,the Assistant Commissioner of Income Tax, Central Circle 11(2), Chennai has passed an order of assessment dated 24.10.1997assessing the total undisclosed income at Rs.96,38,355/- andarrived at the tax due @ 60% at Rs.57,83,013/-. Aggrieved bythe order of assessment dated 24.10.1997, the Vendor haspreferred an appeal on 17.11.1997 before the Income TaxAppellate Tribunal. When the statutory appeal preferred by theVendor was pending, the Department has introduced a schemecalled "Kar Vivad Samadhan Scheme - 1998" (hereinafter referredto as The Scheme) in exercise of powers conferred under ChapterIV of the Finance (No.2) Act, 1998. Therefore, withoutprejudice to the appeal preferred, the Vendor has chosen toavail the benefit of the scheme. Accordingly, on 30.01.1999,the Vendor has opted for the said scheme and filed herdeclaration in Form-1A before the Commissioner of Income Tax,Central Circle-II, Chennai. Such declaration filed by thevendor is in respect of the matters covered under theAssessment period from 01.04.1986 to 03.10.1996 against whichthe statutory appeal was filed and pending before the IncomeTax Appellate Tribunal. The designated authority under theScheme issued a Certificate of Intimation dated 18.02.1999 inForm 1A determining the amount payable by the vendor towardsfull and final settlement of the tax arrears for the blockhttps://hcservices.ecourts.gov.in/hcservices/period of assessment from 01.04.1986 to 03.10.1996 quantifyingthe arrears as Rs.47,83,018/- and the vendor also paid the taxdue at Rs.31,88,675/-. On receipt of such payment, the designated authority under the scheme issued an immunitycertificate dated 24.03.1999 in favour of the vendor towardsfull and final settlement of tax arrears. 2.3. Thereafter, on 25.11.1999, after eight months ofissuance of immunity certificate in favour of the vendor, theDepartment launched prosecution against the vendors as well asthe purchasers by filing a Complaint in E.O.C.C. No. 239 of1999 for the offence punishable under Section 269 UC and 276 ABof the Act. According to the complainant/department, thevendor as well as the purchasers have failed to file thestatement in Form 37-I in respect of the sale transactioneffected between them and thereby they have contravend theprovisions of Section 269 UC of the Act, which is an offencepunishable under Section 276 AB of the Act. 2.4.Aggrieved by the filing of the complaint by theDepartment, the vendor has filed WP No. 20364 of 1999 beforethis Court praying to quash the proceedings in E.O.C.C. No.239of 1999 and to issue a consequential direction directing thedepartment not to proceed against her in any manner in respectof Form -3 issued under the Scheme. According to the vendor,the immunity certificate issued under the scheme was not takeninto account by the Department and that the offence allegedagainst her is not made out by the department especially whenshe has paid the entire tax arrears and later immunitycertificate was given in respect of all matters. By an orderdated 23.02.2001, this Court disposed of WP No. 20364 of 1999with a direction to the trial Court to permit the vendor tomake an application to drop the proceedings initiated againsther on the ground that she had been granted immunity by thedepartment itself under the scheme. The trial Court wasfurther directed to afford an opportunity of hearing to thevendor to raise her objection and thereafter to decide whetherthe immunity already granted to her under the scheme was thesubject matter of the complaint on its file or not. 2.5 Before the trial court, the purchasers have filed aseparate petition under Section 258 of Code of CriminalProcedure contending that Section 269 UC of the Act does notplace any obligation on their part to obtain any clearance fromany of the authorities of the Income Tax Department and theyhave nothing to do with the obligation to seek permissionbefore purchasing the property in question. 2.6 A reply was filed by the Department contendinginter alia that the petition filed by the vendor shall not bedecided along with the petition filed by the purchasers as theDepartment would be left with no option to putforth their caseagainst the purchasers. Notwithstanding such objection, thetrial court rejected the prayer of the Department. Aggrievedhttps://hcservices.ecourts.gov.in/hcservices/by such procedure adopted by the trial Court, the departmentfiled Crl.OP No. 6067 of 2004 and 6068 of 2004 against Crl.M.P.Nos. 2806 of 2003 and 206 of 2004 in EOCC No. 239 of 1999 to quash the petition filed by the vendor as well as thepurchasers under Section 258 of Cr.P.C. This Court, by anorder dated 23.02.2014 directed the trial Court to pass anorder on the petition filed by the purchaser as well as vendorwithin a period of three weeks, however, the main petitions inCrl.OP Nos. 6067 and 6068 of 2004 were kept pending. Asdirected by this Court, arguments have been advanced by bothsides and on 12.03.2004, the impugned orders were passeddischarging the vendor as well as the purchasers from thepurview of prosecution. As against the same, the presentCriminal Revision Cases are filed. 2.7. One more factor to be noted is that when thepresent Criminal Revision Cases are pending, this Court, by anorder dated 28.10.2004, dismissed Crl.OP Nos. 6067 and 6068 of2004 filed by the Department on the ground that the reliefsought for therein have become infructuous. Aggrieved by thesame, a Special Leave Petition No. 6072 and 6073 of 2005 havebeen preferred by the Department before the Honourable SupremeCourt and they were dismissed by an order dated 21.11.2005 onthe ground that as against the order of discharge passed by thetrial Court, the present Criminal Revision Cases are pendingbefore this Court and therefore, no relief could be granted.Accordingly, the Criminal Original Petitions were dismissed ashaving become infructuous. 2.7. One more factor to be noted is that when thepresent Criminal Revision Cases are pending, this Court, by anorder dated 28.10.2004, dismissed Crl.OP Nos. 6067 and 6068 of2004 filed by the Department on the ground that the reliefsought for therein have become infructuous. Aggrieved by thesame, a Special Leave Petition No. 6072 and 6073 of 2005 havebeen preferred by the Department before the Honourable SupremeCourt and they were dismissed by an order dated 21.11.2005 onthe ground that as against the order of discharge passed by thetrial Court, the present Criminal Revision Cases are pendingbefore this Court and therefore, no relief could be granted.Accordingly, the Criminal Original Petitions were dismissed ashaving become infructuous. 3.1. The learned senior Special Public Prosecutor forIncome Tax Cases, appearing for the petitioner mainly arguedthat the order dated 23.02.2001 passed by this Court in WP No.20364 of 1999 filed by the vendor, directing the trial Court totake note of the immunity certificate granted to her and topass an order afresh, cannot be made applicable to thepurchasers herein. Even to the vendor, the immunitycertificate granted by the Department under the scheme will notenure to her benefit to get discharged from the criminalprosecution as the criminal prosecution is launched for non-filing of Form 37-I, which is a statutory obligation ascontemplated under Section 269 of the Act. The criminalprosecution launched against the vendor and the purchasers is aseparate proceeding inasmuch as the vendor as well as thepurchasers have contravened the provisions contained in the Actand Rules. Even assuming without admitting that immunitycertificate was granted to the vendor under the scheme, it hasnothing to do with the violation committed by her in not filingthe declaration under Form 37-I of the Act. It is also not thecase of the purchasers that this Court issued any direction tothem to file appropriate petition for dropping the proceedingsagainst them, as in the case of the vendor, therefore, thebenefits of the scheme availed by the vendor cannot be madeapplicable to the purchasers herein. According to the learnedSenior Public Prosecutor, the filing of declaration is veryhttps://hcservices.ecourts.gov.in/hcservices/important and the immunity certificate obtained by the vendorhas nothing to do with the filing of declaration. It is hiscontention that the provisions under Section 276 AB does not speak about any tax at all and the failure to file thedeclaration under Form 37 I is an offence punishable under theprovisions of the Act. Section 276C, 276CC and 276CCC of theAct clearly indicate that there is a premtive right on the partof the Central Government to take away the property of anyassessee for non filing of Form 37-I of the Act. Therefore, ascontemplated under Section 269 UA2 (3) of the Act, the personinterested has to be taken note of. speak about any tax at all and the failure to file thedeclaration under Form 37 I is an offence punishable under theprovisions of the Act. Section 276C, 276CC and 276CCC of theAct clearly indicate that there is a premtive right on the partof the Central Government to take away the property of anyassessee for non filing of Form 37-I of the Act. Therefore, ascontemplated under Section 269 UA2 (3) of the Act, the personinterested has to be taken note of. 3.2 The learned Senior Special Public Prosecutorwould contend that the compliance of provisions under Chapter20-L is not an assessment at all. When the vendor does notdisclose the execution of agreement and not filed Form 37-I ofthe Act, it gives a right for the department to purchase theproperty and it has nothing to do with the payment of taxarrears. Even as per the scheme availed by the vendor, thefiling of Form 37-I is mandatory, but she did not do so. Thelearned Senior Special Public Prosecutor has placed reliance onthe decision of the Honourable Supreme Court in the cases of(i) (M/s. Jamnaprasad Kanhaiyalal vs. Commissioner of IncomeTax, M.P., Bhopal) (1981) 3 Supreme Court Cases 441 and (ii)(Income Tax Officer, New Delhi and others vs. Rattan Lal andothers) reported in (1986) (Supp) Supreme Court Cases 370 tocontend that the voluntary declaration of the tax due under aparticular scheme or the immunity certificate obtained thereonwill only confer to the declararant and not to the creditingfirm or any other person. In such circumstance, the Departmentis justified in launching prosecution against them toinvestigate the true nature and source of the cash credits andto assess the firm under Section 68 of the Act. 3.3 The learned Senior Special Public Prosecutorfurther placed reliance on the decision of the HonourableSupreme Court in the case of (John Thomas vs. Dr. K.Jagadeesan) reported in (2001) AIR SCW 2529 to contend thatSection 258 of Cr.P.C. is included in Chapter 20 of the Code inthe form of an exception to the normal progress chart of thetrial in summon cases. The power under Section 258 todischarge an accused at midway stage is restricted to thosecases instituted otherwise than on complaints wherein nomaterial witness was examined at all. Placing reliance on thisdecision, it is contended by the learned Senior Special PublicProsecutor that the prosecution has made out a prima facie casefor proceeding against the accused by producing documentaryevidence while so, the trial Court is not justified indischarging them. The assessee was proceeded with only on thebasis of the materials seized during the raid and it is for theassessee to rebut the material evidence during the course oftrial. It is vehemently contended by the learned SeniorSpecial Public Prosecutor that the vendor as well as thepurchasers have wantonly splitted the property in to sixhttps://hcservices.ecourts.gov.in/hcservices/components and executed six separate sale deeds only tosuppress the value of the property and to make it as if theyhave no obligation to pay tax. Therefore, the learned Senior Special Public Prosecutor for the department prayed forallowing the Criminal Revision Cases. Special Public Prosecutor for the department prayed forallowing the Criminal Revision Cases. 4. On the contrary, the learned Senior counsel appearingfor the respondents in Crl.R.C. No. 1353 of 2004 and the firstrespondent in Crl.R.C. No. 1354 of 2004 would contend that theprosecution initiated against the purchasers is withoutauthority of law and there is no jurisdiction to launchprosecution against the purchasers. Chapter 20-C and Section269 U of the Act was pressed into service by the Act on13.05.1986 and it came into force on 01.10.1986 and it wasrepealed with effect from 01.07.2000 by bringing in amendmentsto Section 269 of the Act. Therefore, even as per the Act, thepurchasers have no obligation under the Act to obtain clearanceor No objection from the Department prior to purchasing theproperty. This is more so that the value of the propertypurchased by the respective purchaser does not exceedRs.10,00,000/- and therefore it is in accordance with Section259 UC of the Act which contemplates that if any immovableproperty is purchased having value exceeding Rs.10 lakhs, thenit should be disclosed by Form 37-I of the Act before theappropriate authority. In any event, the vendor has availedthe benefits under the Scheme and settled all the tax dues andobtained an immunity certificate. In such circumstances, thelaunch of prosecution against the purchasers is unnecessary. 5. The learned Senior counsel appearing for thepurchasers/respondents would rely on the decision of theCalcutta High Court in the case of (MOI Engineering Limited andanother vs. Appropriate Authority and others) Volume 198 IncomeTax Reports Page No.270 to contend that the appropriateauthority in exercise of his powers under Section 269UD of theAct does not have the jurisdiction to adjudicate on thelegality of the transaction proposed to be entered into by theapplicant. The only order that could be passed under Section269 UD of the Act is an order of purchase. 6. The learned Senior counsel appearing for the solerespondent in Crl.R.C. No. 967 of 2004, who is the vendor,would contend that the vendor has availed the benefit of theScheme introduced by the Department. On the application of thevendor, under the scheme, the sum payable by her was determinedand it has become conclusive with respect to the matters statedtherein. The vendor also obtained an immunity certificate fromthe Department which duly covers the sale transaction made byher with the purchasers. Further, after issuing immunitycertificate to her, the department, for the reasons best known,waited for eight months to launch prosecution for the allegednon-filing of declaration in Form 37-I of the Act. When theimmunity certificate was obtained, the vendor has no obligationto file the declaration form. Even other wise, the non-filinghttps://hcservices.ecourts.gov.in/hcservices/of such declaration form will not entitle the department tolaunch prosecution against the vendor. Having issued theimmunity certificate, the department virtually foreclosed their right to further proceed against the vendor especially when thevendor paid the tax amount and availed the benefits under thescheme during the pendency of statutory appeal filed by herbefore the Income Tax Appellate Tribunal. The immunitycertificate issued in favour of the vendor duly protects herfrom launch of any prosecution by the department for therelevant assessment year which is duly covered under theimmunity certificate. Further, the Department has notproceeded further to set aside the sale made by the vendor infavour of the purchasers but only contend that the amountmentioned therein has been under-valued. The department failedto take note of the fact that the property was sold by thevendor for Rs.9 lakhs each to six different purchasers byexecuting six separate sale deeds. While so, there is noobligation on the part of the vendor to submit Form 37-I beforethe Income Tax Authorities. Further, the vendor has alreadyintimated the sale of the property to the department as perSection 239-A of the Act and obtained a No Objectioncertificate thereon. When the vendor availed the benefits ofthe scheme, there is no bar for dropping all furtherproceedings against her as also against the purchasers. Thetrial Court, in exercise of power conferred upon it, hasrightly assessed the materials placed by department and rightlydischarged the vendor. 7. In this context, reliance was placed on the decisionin the case of (Hira Lal Hari Lal Bhagwati vs. Central Burealof Investigation, New Delhi) reported in (2003) (3) CTC 356 =262 ITR 466 (SC) wherein it was held that when the immunitycertificate obtained under a particular scheme and it isreferable to or related to the tax due payable towards aparticular assessment scheme, the immunity certificate obtainedwill enure to the benefit of the assessee and the prosecutionlaunched against the assessee is not maintainable. 8. It is further submitted by the learned Senior counselfor the vendor that there is no restriction either in theTransfer of Property Act or any other enactment to sell aportion of the property and to execute sale deeds thereof infavour of more number of persons. It is the desire andinterest of the parties to enter into sale transaction todispose of the entire building or a portion of the building andsuch sale will not in any manner be construed as an offenceunder any of the enactments. Under Section 269 UA (2) (e) ofThe Act, immovable property is defined and includes a part ofthe building. When there is no restriction on the part of thevendor or the purchaser to enter into a sale transaction topurchase the entire property or a portion thereof, thecontention of the prosecution that six sale deeds have beenexecuted only to evade tax liability is unsustainable. https://hcservices.ecourts.gov.in/hcservices/9. I heard the counsel for both sides and perused thematerials placed on record. It is seen from the Certificateissued in favour of the vendor under the Kar Vivad Samadhan Scheme Rules in Form -3 that a sum of Rs.31,88,675/- has beenpaid by the vendor towards tax due which fell during the blockassessment period 01.04.1986 to 03.10.1986. The relevantportion of the form of certificate for full and finalsettlement of tax arrears under Section 90 (2) read withSection 81 of the Finance (No.2) Act, 1988 in respect of thescheme issued to the vendor herein reads as follows:-"And whereas, the designated authority, byorder dated 18.02.1999 determined the amount ofRs.31,88,675/- rupees payable by the declarant inaccordance with the provisions of the scheme andgranted a certificate setting forth therein theparticulars of the tax arrears and the sum payableafter such determination towards full and finalsettlement of tax arrears as per details givenbelow:- And whereas the declarant has paid RupeesThirty One Lakhs being the sum determined by thedesignated authority. And whereas the declarant had declared in thedeclaration made under Section 88 that no writpetition or appeal or reference before any HighCourt or the Supreme Court against any order inrespect of the tax arrears has been filed by suchdeclarant. Now therefore in exercise of the powersconferred by sub-section (2) of Section 90 readwith Section 91 of the Finance (No.2) Act, 1988,the designated authority hereby issues thiscertificate to the said declarant(i) Certifying the receipt of paymentfrom the declarant towards full and finalsettlement of tax arrears determined in the orderdated 18.02.1999 on the declaration made by theaforesaid declarant(ii) granting immunity subject to theprovisions contained in the Scheme from institutingany proceeding for prosecution for any offenceunder Income Tax Act, 1961 or from the impositionof penalty under said enactment in respect ofmatters covered in the aforesaid declaration madeby the applicant. 10. It is clear from the above certificate issuedunder the Scheme that such certificate was issued for the taxamount which fell due during the assessment year 01.04.1986 tohttps://hcservices.ecourts.gov.in/hcservices/03.10.1996. In the present case, the prosecution came to belaunched against the vendor and the purchasers in connectionwith the sale transaction took place during March 1995 and it is duly covered by the certificate issued in favour of thevendor. As rightly pointed out, having received the tax amountdue from the vendor, the prosecution came to be launchedagainst the vendor as well as the purchasers after eight monthsfrom the date on which such certificate has been issued infavour of the vendor. 11. It is further seen from Form of Declaration underSection 89 of the Finance (No.2) Act, 1988 in respect of theScheme that column (e) thereof relates to tax arrearoutstanding as on 31.03.1998 to the tune of Rs.52,83,013/-.Similarly, column (f) relates to amount of tax arrear as on thedate of making the declaration under Section 88, against which,a sum of Rs.35,91,194/- is indicated. In the declaration form,there is a separate column for "verification" which reads asunder:- "I, S. Ramayamma (name in block letters)son/daughter/of Shri. Shambu Prasad, solemnlydeclare that to the best of my knowledge andbelief(a) the information given in thisdeclaration,statementsandannexuresaccompanying it is correct and complete andamount of tax arrears and other particularsshown therein are truly stated and relate tothe previous years relevant to the assessmentyears indicated in this declaration.(b) I am not disqualified in anymanner from making a declaration under thescheme with reference to the provisions ofSection 95 of Finance (No.2) Act, 1988..." "I, S. Ramayamma (name in block letters)son/daughter/of Shri. Shambu Prasad, solemnlydeclare that to the best of my knowledge andbelief(a) the information given in thisdeclaration,statementsandannexuresaccompanying it is correct and complete andamount of tax arrears and other particularsshown therein are truly stated and relate tothe previous years relevant to the assessmentyears indicated in this declaration.(b) I am not disqualified in anymanner from making a declaration under thescheme with reference to the provisions ofSection 95 of Finance (No.2) Act, 1988..." 12. This declaration was made by the vendor on30.01.1999. A perusal of the declaration would indicate thatthe alleged disputed quantum of tax amount and the actual rateof tax payable by the vendor has been duly mentioned. Further,the declaration states that it is referable to the previousyears relevant to the assessment years indicated in thisdeclaration. When the vendor has made such declaration andalso made the tax arrears, the prosecution launched against herand the purchasers is unnecessary. Thus, what has beendeclared by the vendor in the declaration form is inclusive ofthe sale of the property during March 1995 in favour of thepurchasers. This declaration also covers the value assessed bythe Department at Rs.130 lakhs and only after analysing thesame, the dispute was settled between the vendor and thedepartment by availing the benefits of a scheme mooted by thedepartment. Therefore the prosecution can be lodged for anaction, which is not covered under the declaration by thedepartment is not at all correct. The declaration clearly saysabout the tax due taking into consideration the entire salehttps://hcservices.ecourts.gov.in/hcservices/consideration of all the sale deeds, including of the allegedexcess payment. 13. The learned Senior counsel for the Departmentrelied on the decision in the case of (Appropriate Authorityand Commissioner of Income Tax vs. Varshaben Bharatbhai Shah(Smt) and others) reported in (2001) 4 Supreme Court Cases pageNo.1 wherein the Honourable Supreme Court had an occasion toconsider that the transferors were co-owners and agreed totransfer their undivided share in the immomvable property. Inthat context, it was held that what has to be seen for thepurpose of attracting Chapter XX-C is that the property, whichis the subject matter of transfer and what is apparentconsideration for such transfer. This has to be seen in a reallight with due regard to the object of the chapter and not inan artificial or technical manner. In that case before theHonourable Supreme Court, the parties to the transaction filedForm 37-I with the appropriate authority and the total apparentsale consideration of immovable property was Rs.47 lakhs.Therefore, it was held by the Honourable Supreme Court that thequestion of sale of share of individual rights does not ariseand the sale consideration was to be taken as Rs.47 lakhs.This decision will not lend support to the facts of this case.In this case, a raid was conducted in the residence of thevendor and the department has assessed the total tax due.Against the assessment of tax, the vendor has filed an appeal.During the pendency of statutory appeal, the vendor has availedthe benefits of the scheme introduced by the Department andobtianed a certificate thereof. While so, it cannot be saidthat the non-filing of Form 37-I of the Act will entitle thedepartment to launch prosecution either against the vendor orthe purchasers after issuance of immunity certificate in favourof the vendor. Admittedly, in this case, form 37-I was notfiled by the vendor as according to her, it is not required atall. The subject matter in that case before the HonourableSupreme Court is totally different, especially in this case, aportion of the undivided property has alone be sold in favourof the vendors. 14. Before proceeding further, let us have a lookinto the provisions of Section 269UC and 279 AB of the Act,which reads as follows:-"269 UC. Restrictionsontransferofimmovable property - Notwithstanding anythingcontained in the Transfer of Property Act, 1882 (4of 1882) or in any other law for the time being inforce, no transfer of any immovable property insuch area and of such value exceeding five lakhs,as may be prescribed shall be effected exceptafter an agreement for transfer is entered intobetween the person who intends transferring theimmovable property (hereinafter referred to as thetransferor) and the person to whom it is proposedto be transferred (hereinafter referred to as thehttps://hcservices.ecourts.gov.in/hcservices/transferee) in accordance with the provisions ofsub-section (2) at least four months before theintended date of transfer. (2) The agreement referred to in sub-section(1) shall be reduced to writing in the form of astatement by each of the parties to such transferor by any of the parties to such transfer actingon behalf of himself and on behalf of the otherparties. (3) Every statement referred to in sub-section (2) shall-(i) be in the prescribed form(ii) set forth such particulars as maybe prescribed; and(iii) be verified in the prescribedmanner and shall be furnished to the appropriateauthority in such manner and within such time asmay be prescribed by each of the parties to suchtransaction or by any of the parties to suchtransaction acting on behalf of himself and onbehalf of the other parties (4) Where it is found that the statementreferred to in sub-section (2) is defective, theappropriate authority may intimate the defect tothe parties concerned and give them an opportunityto rectify the defect within a period of fifteendays from the date of such intimation or withinsuch further period which on an application madein this behalf, the appropriate authority may, inthe discretion, allow and if the defect is notrectified within the said period of fifteen daysor as the case may be, the further period soallowed, then, notwithstanding anything containedin any other provision of this chapter, thestatement shall be deemed never to have beenfurnished." "As per Rule 48K of the Income Tax Ruleswhere the value of the sale deed exceeds Rs.10lakhs only, form 37-I has to be filed in so far asCity of Madras is concerned upto 31.07.1995. From01.08.1995, it was incresed to Rs.25 lakhs." 279 AB - Power of Principal Commissioner orCommissioner to grant immunity from prosecution. (1) A person may make an application to theprincipal Commissioner or Commissioner forgranting immunity from prosecution, if he has madehttps://hcservices.ecourts.gov.in/hcservices/an application for settlement under Section 245Cand the proceedings for settlement have abatedunder Section 245HA (2) The application to the PrincipalCommissioner or commissioner under sub-section (1)shall not be made after institution of theprosecution proceedings after abatement. (3) Theprincipalcommissionerorcommissioner may, subject to such conditions as hemay think fit to impose, grant to the personimmunity from prosecution for any offence underthis Act, if he is satisfied that the person has,after the abatement, co-operated with the incometax authority in the proceedings before him andhas made a full and true disclosure of his incomeand the manner in which such income has beenderived. Provided that where the application forsettlement under section 245C had been made beforethe 1st day of June 2007 the principalcommissioner or commissioner may grant immunityfrom prosecution for any offence under this Act orunder the Indian Penal Code (45 of 1980) or underany other Central Act for the time being in force. (3) Theprincipalcommissionerorcommissioner may, subject to such conditions as hemay think fit to impose, grant to the personimmunity from prosecution for any offence underthis Act, if he is satisfied that the person has,after the abatement, co-operated with the incometax authority in the proceedings before him andhas made a full and true disclosure of his incomeand the manner in which such income has beenderived. Provided that where the application forsettlement under section 245C had been made beforethe 1st day of June 2007 the principalcommissioner or commissioner may grant immunityfrom prosecution for any offence under this Act orunder the Indian Penal Code (45 of 1980) or underany other Central Act for the time being in force. (4) The immunity granted to a person undersub-section (3) shall stand withdrawn, if suchperson fails to comply with any conditions subjectto which the immunity was granted and thereuponthe provisions of this Act shall apply as if suchimmunity had not been granted. (5) The immunity granted to a person undersub-section (3) may, at any time, be withdrawn bythe principal commissioner or commissioner, if heis satisfied that such person had, in the courseof any proceedings, after abatement, conceded anyparticulars material to the assessment from theincome-tax authority or had given false evidenceand thereupon such person may be tried for theoffence with respect to which the immunity wasgranted or for any other offence of which heappears to have been guilty in connection with theproceedings." 15. As per the provisions of Section 279AB of theAct, immunity was granted by the department in favour of thevendor in respect of "any proceedings". Let me now considerthe scope and ambit of the word "any proceedings" indicated inthe declaration made by the vendor. The term "any proceeding"under the Act should in the normal nomenclature also includeshttps://hcservices.ecourts.gov.in/hcservices/any action to be taken for contravention of any of theprovisions of the Act and Rules in respect of a transaction, inthe present case, the alleged sale transaction. The further action as contemplated under Section 269 UC of the Act is non-filing of Form 37-I of the Act which was originally started inthe year 1996 itself by issuing a show caue notice. A replywas also given by the respondents herein and subsequentassessment was made in favour of the vendor. Therefore, theterm "any proceeding" in the facts and circumstances of thecase, will also include the proceedings contemplated underSections 269 UC and 276 AB of the Act. While so, thedepartment is not justified in initiating separate actioneither against the vendor or purchasers because submission ofform 37-I of the Act is not required to be submitted by them.As far as the purchasers are concerned, they are only requiredto jointly sign with the vendor. The vendor has to submit form37-I of the Act. What applies to the vendor will equally applyto the purchasers. When the vendor was issued with an immunitycertificate in respect of the very same action itself, can thepurchasers be made to suffer on the alleged non-filing of Form37-I, which according to the department it is only a jointdeclaration. Further, in this case, as discussed earlier, thevendor has already obtained No Objection Certificate from thedepartment for execution of six different sale deeds in favourof six different purchasers. Therefore, there is no obligationat all for the purchasers to even think of filing form 37-I.The department was very well aware of the six different saledeeds executed by the vendor and that is the reason why thedepartment gave the No Objection Certificate to the vendor forexecution of the sale deeds. 16. The learned Senior Counsel appearing for theDepartment also relied on the decision of the HonourableSupreme Court in the case of (Appropriate Authority (IT Deptt)and others vs. M. Arifulla and others) (2002) 10 Supreme CourtCases 342 to contend that vendor is only a co-owner and valueof the each of the property sold by her has to be determinedbearing in mind the provisions of Section 269 UC of the Act. 17. The learned Senior counsel for the Departmentalso relied on (Killick Nixon Limited, Mumbai vs. DeputyCommissioner of Income Tax, Mumbai and others) (2003) 1 SupremeCourt Cases 145 to contend that immunity from prosecutioncannot be restricted only for the offences covered therein andthat the scheme is to cut short litigations pertaining to taxeswhich were frittering away the energy of the Revenue Departmentand to encourage litigants to come forward and pay up areasonable amount of tax in accordance with the scheme afterdeclaration made thereunder. 18. Yet another point for consideration is that soonafter prosecution was launched, the vendor has approached thisCourt and filed Writ Petition No. 20364 of 1999 to quash theproceedings initiated against her in E.O.C.C. No. 239 of 1999https://hcservices.ecourts.gov.in/hcservices/and to direct the department not to proceed against her in anymanner by taking into account Form No.3 issued in her favourunder the Scheme. This Court, by order dated 23.02.2001 directed the trial Court to consider the request of thepetitioner to drop the prosecution against her in the light ofthe immunity certificate issued in her favour. This Court alsodirected the trial Court to consider whether the immunitycertificate granted to the vendor also covers the period duringwhich the sale transaction took place. On the basis of suchclear direction issued by this Court, the vendor has filed apetition in Crl.M.P. No. 770 of 2001 to drop all furtherproceedings against her and it was contested by the department.The trial Court, after analysing the entire evidence on record,held that the immunity granted to the vendor is for the vendorand also the purchasers as a whole and therefore, they areentitled for protection against the criminal prosecution. directed the trial Court to consider the request of thepetitioner to drop the prosecution against her in the light ofthe immunity certificate issued in her favour. This Court alsodirected the trial Court to consider whether the immunitycertificate granted to the vendor also covers the period duringwhich the sale transaction took place. On the basis of suchclear direction issued by this Court, the vendor has filed apetition in Crl.M.P. No. 770 of 2001 to drop all furtherproceedings against her and it was contested by the department.The trial Court, after analysing the entire evidence on record,held that the immunity granted to the vendor is for the vendorand also the purchasers as a whole and therefore, they areentitled for protection against the criminal prosecution. 19. On the other hand, the Department has approachedthis Court by filing Criminal Original Petition Nos. 6067 and6068 of 2004 against the order passed by the trial Courtrefusing to hear the application filed by the vendor and thepurchaser separately. This Court, by the order dated23.02.2004 directed the trial Court to pass orders on thepetition filed by the vendor as well as the purchaser withinthree weeks and kept the Criminal Original Petitions pending.Pursuant to such direction issued by this Court, the orders,which are impugned in these Criminal Revision Cases came to bepassed. It is seen from the orders passed by the trial Courtthat it had taken into account the clear direction issued bythis Court to dispose of the petitions on merits byindependently analysing the evidence made available todischarge the vendor as well as the purchasers from the purviewof prosecution. Thus, the Department was given opportunity tocontest the applications to drop the criminal prosecutionagainst the vendor and purchasers and only thereafter, thelower Court has passed the orders after a detailed analysis ofthe submissions made on both sides. In view of the orderpassed by the trial Court, this Court dismissed the CriminalOriginal Petition Nos. 6067 and 6068 of 2004 filed by theDepartment as infructuous. The Department again contended thatthe Criminal Original Petition Nos. 6067 and 6068 of 2004should not have been dismissed and raised a plea before theHonourable Supreme Court. The Special Leave Petitions filedthereagainst were also dismissed by the Honourable SupremeCourt on merits. Thus, identical arguments raised by theDepartment has been considered by this Court twice andpursuance to such directions issued by this Court, the impugnedorders have been passed by the trial Court, which was alsoconfirmed by the Supreme Court. 20. It is the specific case of the prosecution thatthe property owned by one person namely the vendor herein andshe has wantonly and wilfully sold the undivided share of theproperty by executing six sale deeds. In other words,