HC dismisses Moin Qureshi's plea against invalidation of tax settlement application

The Delhi High Court today dismissed the plea of controversial meat exporter Moin Akhtar Qureshi against a 2017 order of the Income Tax Settlement Commission (ITSC) which invalidated his tax settlement application as he had failed to make full and true disclosure of his income.

A bench of justices Chander Shekhar and Sanjiv Khanna said that it is "not a fit case to be allowed to be proceeded with as the applicant (Qureshi) has not made a full and true disclosure of all the material facts in absence of which it would not be possible for us to determine the income of the applicant".

The ITSC had said in its order on May 12, 2017, that the petitioner had two off-shore bank accounts of Barro Holdings Limited and Bulova Holding Limited in the BSI Bank Limited, Singapore, through which he had purchased a property in London.

The Commission had also said he was the beneficial owner of two bank accounts even though he had not filled up the account opening forms.

Qureshi in his appeal against the Commission's order said that it completely disregards and was contrary to the High Court's April 13, 2017 decision which said that there was no failure on his part to make full and true disclosure as far as bank accounts were concerned.

Qureshi claimed that he was not a shareholder of the two companies and, therefore, he had no interest in the companies. He had said that his brother-in-law Yusuf Mehboob Khan, a citizen of Pakistan, was the beneficial owner of the property in London.

The ITSC on the basis of the Know Your Customer information and details obtained from the Singapore government under the Double Taxation Avoidance Agreement had found that Qureshi had authorized the board of directors of Bulova Holdings Limited to purchase the London property in 2012.

Details of the income, payments from Barro Holdings Limited to Bulova Holdings Limited were also referred to by the ITSC.

The bench said, "Now that it is established that he is the beneficial owner of a bank account in Singapore through which substantial amount of funds had been transferred...."

The bench said that "as the flow of funds from this account and the purchase of property in London are intricately linked on both the issues the disclosure is not full and true."

It said that the provisions of Settlement under the Income Tax Act, 1961 were introduced to allow an errant taxpayer who desires to follow the path of rectitude to make a clean breast of his affairs and file an application under section 245C(1) for the settlement of its tax disputes before the Settlement Commission.

"However this once in a lifetime opportunity is available to an errant taxpayer only if he comes out clean. It cannot be allowed to a taxpayer who fails to disclose such a material fact as for ownership of a foreign bank account," it said.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)