Skip to main content

Prosecution can be launched before Income Tax Assessment completion

 In Rohit Kumar Nemchand Piparia vs The Deputy Director of Income Tax (Inv), petition was filed before the High Court to quash the preceding initiated against the Appellants before the  Court of the Additional Chief Metropolitan Magistrate, Economic Offences-II, Egmore, Chennai, taking cognizance for the offence under Section 276C(1) of the Income Tax Act, 1961.

The Dept. alleged that the petitioner had entered into 165 share transaction during the financial year 2007-08 and filed his return of income for the assessment year 2008-09. Though the tax has been deducted, it was not fully deducted and the petitioner did not disclose in his return of income under the head Capital Gain and paid the tax. Thus, the petitioner failed to show the same in his return of income and attempted to evade payment of tax. Only after deduction by the income tax department, the petitioner had share transactions during the relevant financial year and accepted the same. Therefore, the petitioner committed the offence punishable under Section 276C(1) of the Income Tax Act, 1961.

The petitioner claimed that the said assessment order has been challenged by the petitioner before the Income Tax Appellate Authority and by an order dated 28.08.2018, the said assessment order has been set aside. Therefore, the very basis of the lodgement of the complaint itself set aside and as such the petitioner is not at all liable to be prosecuted. He further submitted that while being so, suppressing the said fact that the said assessment order itself was set aside, the respondent herein granted sanction order dated 16.10.2018 to prosecute the petitioner under the Income Tax Act. Therefore, on this ground alone, the complaint cannot be sustained as against the petitioner.

The High Court disagreeing with the Petitioner and referring to the judgment of the Supreme Court in Radheshyam Kejriwal Vs. State of West Bengal & anr, (2011) 3 SCC 437, held that :-

(i) Adjudication proceeding and criminal prosecution can be launched simultaneously; 

(ii)Decision in adjudication proceeding is not necessary before initiating criminal prosecution; 

(iii)Adjudication proceeding and criminal proceeding are independent in nature to each other;

(iv)The finding against the person facing prosecution in the adjudication proceeding is not binding on the proceeding for criminal prosecution;

(v) Adjudication proceeding by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20 (2) of the Constitution or Section 300 of the Code of Criminal Procedure; 

(vi)The finding in the adjudication proceeding in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceeding is on technical ground and not on merit, prosecution may continue; and 

(vii) In case of exoneration, however, on merits where allegation is found to be not sustainable at all and person held innocent, criminal prosecution on the same set of facts and circumstances can not be allowed to continue underlying principle being the higher standard of proof in criminal cases.


Comments

Post a Comment

Most viewed this month

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more

Flat owner without legal title has consumer rights

In a significant judgment, the South Mumbai Consumer Forum has held that a flat owner legally occupying the flat would be a consumer, even if his title to the flat might be in dispute before a competent court. Thurlow owned a flat in a co-operative society. Appuswami was residing with him. In 1976, Appuswami got married in the same flat, and his wife started residing in the same flat. They had three children, born and brought up in the same flat. After Thurlow expired in 2004, Appuswami approached the High Court for inheritance to Thurlow's estate but expired while the matter was pending. His wife and children were brought on record. Subsequently, the society intervened, contending Appuswami did not have any right to the flat and it should be handed over to the Society. The Appuswami family continued to reside in the flat, and even pay the society's outgoings and maintenance charges. Later, the society stopped collecting maintenance charges from all members, as it earned...
Post a Comment
Read more

NCLT - Mere admission of receipt of money does not qualify as a financial debt

Cause Title : Meghna Devang Juthani Vs Ambe Securities Private Limited, National Company Law Tribunal, Mumbai, CP (IB) No. 974/MB-VI/2020 Date of Judgment/Order : 18.12.2023 Corum : Hon’ble Shri K. R. Saji Kumar, Member (Judicial) Hon’ble Shri Sanjiv Dutt, Member (Technical) Citied:  Carnoustie Management India Pvt. Ltd. Vs. CBS International Projects Private Limited, NCLT Swiss Ribbons Pvt. Ltd. & Anr vs. Union of India & Ors. (2019) Sanjay Kewalramani vs Sunil Parmanand Kewalramani & Ors. (2018) Pawan Kumar vs. Utsav Securities Pvt Ltd 2021 Background Application was filed under section 7 of the Insolvency and Bankruptcy Code, 2016 alleging loan of Rs, 1.70 cr is due. The Applicate identified herself as the widow and heir of the lender but could not produce any documents proving financial contract between her Late husband and the CD but claimed that the CD has accepted that money was received from her husband. The applicant subs...
Post a Comment
Read more