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J. K. MAHESHWARI, VIJAY BISHNOI
Vijay Krishnaswami @ Krishnaswami Vijayakumar – Appellant
Versus
Deputy Director of Income Tax (Investigation) – Respondent
JUDGMENT :
J.K. MAHESHWARI, J.
1. Leave granted.
2. The appellant invoked the jurisdiction of the High Court1 [High Court of Judicature at Madras] in Crl. OP. No. 28763 of 2018 for quashing of the proceedings of EOC No. 242 of 2018 initiated by the Revenue, before the Additional Chief Metropolitan Magistrate (E.O. II), Egmore, Chennai, for offence under Section 276C(1)2 [Wilful attempt to evade tax, etc.] of the Income Tax Act, 1961 (in short “IT Act”) for assessment year 2017-2018. The High Court vide the impugned judgment dismissed the quashing petition filed by the appellant. Challenging the same, he has knocked the doors of this Court preferring the instant appeals. The consequence of the dismissal of quashing petition has led to the appellant facing trial for an offence in which settlement was entered by the Revenue with the appellant, granting him immunity from levy of penalty.
3. Shorn of unnecessary details, the facts are that, on 24.04.2016, search under Section 1323 [Search and seizure] of the IT Act was conducted at the residence of the appellant, and unaccounted cash of
(1) Wilful tax evasion – Mens rea of assessee is required to be proved – In absence, lodging such prosecution would result into futility.(2) Wilful tax evasion – Circulars issued by Revenue are bindi....
An annulled penalty under the Income Tax Act negates the foundation for criminal prosecution for concealment unless reversed, thus quashing ongoing prosecution.
Immunity from levy of penalty and prosecution – Section 245C read with Section 245H of Income Tax Act, 1961 only contemplates full and true disclosure of income to be made before Settlement Commissio....
object of launching criminal prosecution for wilful default in complying with the provisions of the Income Tax Act is to prevent evasion of tax
The main legal point established in the judgment is that the Settlement Commission had exclusive jurisdiction from the date of the petitioner's application, and the penalty imposed was without jurisd....
The main legal point established is that the failure to remit tax, without evidence of a wilful attempt to evade tax, does not constitute an offence under Section 276 C (2) of the Income Tax Act.
The court upheld the validity of the prosecution's sanction and found the complaints valid, confirming that pending assessments do not impede criminal complaints under tax evasion laws.
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