2020 (10) TMI 1266 - HC - Income Tax

Quashing of the complaint u/s 276-B, 276-C and 277 read with Section 417 of IPC, 1860 in Financial Year 2016- 17 - attempt to approach the Settlement Commissioner to pay the tax as per the disclosure made by them - HELD THAT - When we have gone through the pleadings it is observed that the grounds urged by the petitioners in contending that when the petitioner has approached settlement commissioner to resolve the matter regarding payment of tax on escaped income, question of initiating proceedings by filing complaint does not arise is not acceptable in the light of judgment 1993 (4) TMI 50 - PUNJAB AND HARYANA HIGH COURT as contended by the counsel for the respondent. We find that the question of entertaining this writ petition either to quash the complaint registered against the petitioners dated 02.04.2019 vide Annexure P-1 or to interefere with the same at this juncture in any manner does not arise.

Summary

Issues: Seeking quashing of complaint under Sections 276-B, 276-C, and 277 of the Income Tax Act, 1961 read with Section 417 of IPC, 1860 filed in Financial Year 2016-17 and seeking stay on consequential proceedings.

Analysis:
The petitioners sought to quash a complaint filed against them under various sections of the Income Tax Act, 1961 and the IPC, 1860, and requested a stay on all consequential proceedings. They argued that since they had approached the Settlement Commissioner to pay the tax on disclosed income, the Income Tax Department had no right to initiate complaint proceedings alleging suppression of income and nonpayment of tax. However, the respondents contended that the initiation of complaint proceedings was valid, citing a judgment from 2004. The court noted that the Settlement Commission had not yet allowed the proceedings to proceed further when the complaint was filed, and thus, the Commissioner had the authority to order the prosecution at that time. The court emphasized that the Settlement Commission allowing the proceedings did not automatically stay the criminal proceedings initiated by the Commissioner.

In light of the arguments presented and the legal precedent cited, the court found that the grounds raised by the petitioners had already been addressed in the previous judgment. The court concluded that there was no basis to entertain the writ petition to quash the complaint or interfere with it at that stage. Therefore, the court dismissed the writ petition seeking to quash the complaint filed against the petitioners in April 2019.

This detailed analysis of the judgment highlights the legal arguments put forth by both parties, the court's interpretation of relevant legal provisions, and the application of precedent in reaching the decision to dismiss the writ petition.