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TMI Blog1995 (4) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale price in purchasing a residential house. Exhibit P-7 is the undertaking letter given by him for investment in the house property. He also filed income-tax return exhibit P-2 for 1984-85 on April 30, 1984, but he did not mention the notional rental income for his self-occupied property in Baliah Avenue. When the assessee owns another housing property other than the property for which exemption is claimed, he is not entitled to the benefit under section 54F of the Income-tax Act to claim exemption for the capital gain. But, in this case, as the revision petitioner owned the housing site in Giriyappa Road and a residential flat in Baliah Avenue, he was not entitled to claim exemption. However, he claimed exemption under exhibit P-7. The Income-tax Officer who perused his income-tax returns for the previous year had found that though for 1982-83 and 1983-84, the petitioner had mentioned the notional rental income from the self occupied property, he deliberately omitted to mention the notional rental income for the self occupied flat, namely, No. 15, Baliah Avenue, in exhibit P-2 return filed for 1984-85 deliberately to conceal the ownership of more than one housing property. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lude the notional rental income is not wilful on the part of the revision petitioner herein and also has acquitted the revision petitioner on that ground of the charge under section 276C(1). When such view has been taken by the learned Principal Sessions Judge for the offence under section 276C(1) of the Act, he cannot take a different view for the offence under section 277 of the Income-tax Act, holding that the return exhibit P-2, submitted for 1984-85, is a false statement attracting punishment under section 277 of the Income-tax Act, 1961, and, therefore, the order of the learned Principal Sessions Judge convicting the revision petitioner for the offence under section 277 of the Income-tax Act, 1961, has to be set aside. Learned senior counsel, Mr. G. Subramanian, would concede that the revision petitioner was not entitled to the benefits of section 54F of the Income-tax Act, 1961, to claim exemption of capital gain in view of the fact that he owned two premises, that the department also had subsequently levied the tax on capital gain but the revision petitioner was claiming exemption from the capital gain on wrong advice and that claim has nothing to do with the filling of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer's case is that the assessee concealed his income from the Baliah Avenue flat with the ulterior motive of claiming exemption under section 54, section 54F. We are convinced that section 271(1)(c) is not designed to rope in such cases ; nor is it the egislative intent that the said section should be invoked in such a fashion." Therefore, as it was contended by the Income-tax Officer that the rental income was suppressed for the purpose of claiming the exemption, the Tribunal held that section 271(1)(c) could not be invoked. The Tribunal has further observed. " 10. . . . We could have readily appreciated his stand had the Income-tax Officer come to the conclusion that the assessee was guilty of concealment of income from the self-occupied Baliah Avenue property. That, however, is not the Income-tax Officer's case." From the above view taken by the Tribunal, the approach of the Tribunal is not in relation to the point urged in this matter as the revision petitioner herein is convicted for the suppression of his income by filing a false statement. Therefore, exhibit D-1 is not in any way helpful to the revision petitioner. As mentioned above, the learned Principal Sessions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding that when the statement exhibit P-2 is found to be false and untrue, irrespective of the mens rea on the part of the assessee, he is liable to be punished under section 277 of the Income-tax Act, 1961. The learned Principal Sessions Judge proceeds on the footing that no mens rea or criminal intention is required for the offence under section 277 of the Income-tax Act, 1961, and when once the return filed by the assessee is found to be false or incorrect, it will constitute the offence punishable under section 277 of the Income-tax Act, 1961. The learned Principal Sessions Judge observes : " According to learned counsel appearing for the appellant, it is only a mistake. Whether it is a mistake or a deliberate action, the fact remains that the assessee has signed the statement under verification which contains particulars which are not true. Concealing the income in the income-tax return per se being an offence, the appellant has been rightly found guilty of the offence under section 277(ii) of the Act by the trial court. . . . " But on a reading of section 277 of the Income-tax Act, 1961, it does not reveal that a statement with incorrect particulars, per se, becomes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act, because of the absence of mens rea or criminal intention. The learned Principal Sessions Judge has observed that sections 182, 196 and section 420 read with section 511 of the Indian Penal Code, 1860, also have been proved against the revision petitioner since no mens rea is contemplated for these offences also. This view of the learned Principal Sessions Judge also cannot be accepted, because these sections read that the offence should have been committed intentionally. Learned counsel for the Department, Mr. Ramasamy argued that even though the observation of the learned judge that criminal intention is not a necessity to constitute the offence, cannot be countenanced, taking into consideration the conduct of the petitioner accused in suppressing the notional rental income purposely for one year, i.e., for 1984-85, to claim exemption from capital gains tax, there cannot be a contra view that the petitioner has no mens rea to file a false statement, for which he has to be dealt with according to law. This argument will have force, had the respondent-department filed an appeal against the order of acquittal of the learned Principal Sessions Judge for the offence u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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