2022 (8) TMI 1434 - HC - Income Tax

Offence u/s 276 CC - allegation of Clear case of willful and deliberate commission of default of the accused by not furnishing the return of income for the Assessment Year 2014 2015 within the due time allowed under Section 139 (1) - Petitioner submitted that sanction suffers from non application of mind - respondent further submitted that once cognisance has taken against a person by the trial Judge the High Court cannot be said to have erred in leaving the question of validity of sanction open for consideration by the trial Court - HELD THAT - A perusal of the sanction order would indicate that the reply of some other assessee has been considered and no show cause notice has been issued to the assessee whereas some other assessee s reply has been taken note of while considering the case of the petitioner. It is the admitted case of both sides that charges have not been framed and that the respondent has let in only pre-charge evidence and thus the petitioner would be entitled to file an application for discharge under Section 245 of Cr.P.C. In the event any discharge petition is filed it is open to the trial Court to consider the same on its own merits. In such a view of the matter this Court is not inclined to grant the relief as sought for by the petitioner since the cognisance has already been taken. Accordingly this Criminal Original Petition is dismissed. However it is made clear that the respondent Department cannot substitute any new sanction order in the name of additional documents the respondent is not entitled to create/file any other document to show that sanction has been given. As petitioner requested this Court to dispense with the presence of the petitioner. Taking into consideration the facts and circumstances of the case the presence of the petitioner before the Trial Court is dispensed with except for receipt of copies answering the charges questioning under Section 313 Cr.P.C. or on any other date as may be required by the trial Court. They shall be represented by a counsel who shall cross examine the witnesses on the same day when they are examined in Chief.

Summary

Issues involved:
1. Validity of sanction under Section 276 CC of the Income Tax Act, 1961.
2. Consideration of reply of another assessee in the sanction order.
3. Entitlement to file an application for discharge under Section 245 of Cr.P.C.
4. Discretion of the Court in granting relief after cognizance has been taken.

Analysis:
1. The primary issue in this case revolves around the validity of the sanction under Section 276 CC of the Income Tax Act, 1961. The petitioner contended that there was no valid sanction as the reply of a third party was considered instead of the assessee's reply, leading to a lack of proper application of mind in granting the sanction. The respondent argued that the accused willfully defaulted in filing the income tax return for the Assessment Year 2014-2015, constituting an offense under Section 276 CC. The respondent further emphasized that once cognizance is taken by the trial Judge, the question of the validity of the sanction can be raised during the trial, as per legal precedents cited.

2. Another issue highlighted was the consideration of the reply of a different assessee in the sanction order, raising concerns about the procedural fairness and correctness of the sanction process. The Court noted that the sanction order indicated the consideration of another assessee's reply without issuing a show cause notice to the petitioner. This discrepancy in the sanction process was a point of contention in the case.

3. The Court acknowledged that charges had not been framed, and only pre-charge evidence was presented by the respondent. Consequently, the petitioner was deemed entitled to file an application for discharge under Section 245 of the Criminal Procedure Code (Cr.P.C). The Court clarified that if a discharge petition is submitted, the trial Court has the authority to evaluate it based on its merits, ensuring due process in the legal proceedings.

4. Lastly, the Court exercised its discretion in deciding not to grant the relief sought by the petitioner since cognizance had already been taken. The Court dismissed the Criminal Original Petition but explicitly prohibited the respondent Department from substituting any new sanction order or introducing additional documents to support the sanction. Furthermore, the Court dispensed with the petitioner's presence before the Trial Court for most proceedings, allowing representation by counsel except for specific instances like receiving copies, answering charges, or questioning under Section 313 Cr.P.C. This decision concluded the case, closing all connected Criminal Miscellaneous Petitions.