Frivolous petition

This is not a bonafide petition but an attempt to settle some personal score with those in power at the Bombay Parsi Punchayet (BPP), held the division bench of Justice V. C. Daga and Justice J. P. Devdhar of the Bombay High Court. They dismissed the "frivolous” petition filed by Syrus Merchant, a tenant of Cusrow Baug, alleging substantial income-tax evasion by the BPP.

According to Merchant, the BPP was accepting donations for transferring tenancy but not paying income-tax thereon. The corpus of the trust had increased from Rs 11 lakh to Rs 15 crore by avoiding tax, he maintained. Contending that if the Income-tax department properly investigates the matter it will be able to recover crores of rupees, Merchant was claiming that as an infor­mant he was entitled to a 10 percent reward.

Viewing the petition as a harassment to the trust, the judges requested Merchant to withdraw his application but his counsel Jayesh Bhat refused and insisted on continuing with the suit. Finally instead of earning a reward Merchant was ordered to pay Rs 10,000 to the defendants as compensatory costs.

On behalf of the BPP trustees counsel R. A. Dada pointed out that since Merchant had already filed a complaint against the trustees before the charity commissioner there is an alternate remedy available for him, negating the need for this petition. He further asserted that there is no violation by trustees under the provisions of the Income-tax Act and that the accounts of the trust are audited periodically and assessed by the Income-tax department. Appearing for the trustees were Dada and Burjor Antia with P. J. Pardiwala and Homiar N. Vakil instructed by M/s Mulla and Mulla and Craigie Blunt and Caroe.

This is not a case where the assessee has concealed his income and/or not disclosed a particular income entitling the informer to claim reward, declared the judges who viewed Mer­chant’s action as abusing the process of law. They further noted that all citizens are entitled to do their tax planning. Tax evasion is a crime but not tax planning.