Prosecution under the Black Money Act can proceed without prior assessment, provided there is prima facie evidence of an attempt to evade taxes.

JUDGMENT :

DINESH KUMAR SHARMA, J.

A. BRIEF FACTS

1. The present petition has been filed seeking the quashing of Criminal Complaint No. 2121/2019, pending in the Court of the learned ACMM, Tis Hazari Court, Delhi, and the summoning order dated 10.05.2019. The Additional Commissioner of Income Tax (Central), New Delhi, has filed the complaint under Section 51(1) of the Black Money (Undisclosed Foreign Income and Assets and Imposition of Tax) Act, 2015 (hereinafter referred to as the "Black Money Act"). The complaint alleges that a search and seizure operation was conducted on the assessee's premises at B-217, Greater Kailash-I, New Delhi, on 27.04.2016.

2. During the search and seizure operation, incriminating documentary evidence and information were discovered, establishing that the accused (Sanjay Bhandari) held the following undisclosed bank accounts and properties, tabulated as under:

3. It was alleged that as per provisions of the Income Tax, 1961 along with the return of income from the assessment year 2012-13 the accused failed to disclose as is evident below:

4. The complainant alleged that information was received through Foreign Tax and Tax Research regarding undisclosed foreign bank accounts, foreign properties, etc.

5. The complainant further alleged that a search operation under Section 132 of the IT Act, 1961 was conducted against Sh. Sanjeev Kapur, a Chartered Accountant, on 07.02.2017 at IGI Airport, Delhi, and at his office in South Extension, Part-II, New Delhi. Sh. Kapur was allegedly involved in backdating and fabricating documents for Sh. Sanjay Bhandari. Searches were also conducted on 10.02.2017 against Sh. Anirudh Wadhwa and Sh. Abhinandan Banerjee, advocates allegedly involved in similar activities under Section 132 of the IT Act, 1961.

6. The complainant alleged that incriminating evidence and documents were unearthed during these searches. Statements recorded under oath established that the accused, Sanjay Bhandari, was preparing to alienate his foreign assets and offshore entities by backdating documents to evade taxes under the Black Money Act, 2015. The investigation revealed that the accused held foreign assets in the form of foreign bank accounts, immovable properties, and interests in foreign entities. He had incorporated entities in Dubai as a director and/or beneficial shareholder, and further inquiries indicated he had financial interests in an entity incorporated in Panama. Notices under Section 10(1) of the Black Money Act, 2015, were issued to the accused on 22.09.2016 and 10.10.2016, which he responded to on 03.11.2016.

7. The complainant alleged that evidence, including the admission of Sh. Sanjeev Kapoor, the accused’s Chartered Accountant, revealed a scheme to appoint the accused as the sole trustee of the Alrahma Trust (based in the UAE) effective from 2006, to show that all foreign assets/offshore entities held by him were in a fiduciary capacity as trustee rather than in his individual capacity. It was alleged that the accused planned to transfer the sole trusteeship to Sumit Chadha, a close associate and UK national, from March 2015, just before the Black Money Act, 2015, came into effect. This would have enabled the accused to alienate his foreign assets by placing them under the trust's umbrella, achieved through fabrication and backdating of documents. Further, during the search of Sh. Sanjeev Kapoor at IGI Airport on 07.02.2017, incriminating evidence regarding the fabr