9911796707
|
Home
Issues:
Challenge to initiation of criminal proceedings under section 35(1)(a) of the Gift-tax Act. Detailed Analysis: The petitioner transferred shares to his wife and son, claiming it was in partial discharge of legal obligations. He did not file a return of gift as he believed the transfers were not taxable gifts. The Income-tax Officer had jurisdiction over the petitioner's tax matters but did not issue any notice under the Gift-tax Act. The Gift-tax Officer lodged a complaint under section 35 without initiating assessment proceedings. The petitioner argued that without a proper assessment, criminal proceedings should not have been initiated. The court found that the complaint was lodged without a proper basis and in a colorable exercise of power. The petitioner disclosed the transactions in his wealth-tax returns, and the officer-in-charge did not proceed against him under the Gift-tax Act. The court held that a criminal complaint should not be based solely on a prima facie finding of a gift without considering if a return was not furnished without reasonable cause. The officer's change in view and the casual initiation of criminal proceedings were deemed unjustified. The court criticized the casual manner in which the criminal proceedings were initiated and noted the lack of explanation for the sudden enquiry in 1980 regarding the gift-tax return. The failure to serve a notice under section 16 for assessment year 1967-68 raised doubts about the validity of the proceedings. The petitioner's argument that criminal proceedings require a filed return with false information was dismissed, emphasizing the obligation to file a return under section 13(1) for criminal liability. In conclusion, the court allowed the writ petition, quashing the criminal complaint and ordering relief as per the petitioner's prayers. The court refused the oral prayer for a stay of operation of the order.
|
