2017 (5) TMI 1424 - HC - Income Tax

Cognizance against the petitioner under Section(s) 276C (1) and 276C (2) - Held that - In the instant case from the facts mentioned, in detail, it is apparent that the petitioner has not been exonerated by the Income Tax Department in the adjudication proceeding till date. The assessment done by the Income Tax Department has been upheld by the Hon ble High Court. As per own averment of the petitioner, Special Leave Petition filed by the petitioner is still pending in the Hon ble Supreme Court of India. In such circumstances, this Court does not find any illegality in the impugned order dated 01.02.2013 passed by the Presiding Officer (Special Court), Economic Offences, Patna, in Complaint Case taking cognizance against the petitioner under Section(s) 276(1) and 276(2) of the Income Tax Act.

Summary

Issues:
1. Quashing of order dated 01.02.2013 passed by the Special Court, Economic Offences, Patna.
2. Allegations of income tax evasion and prosecution under Section(s) 276 C(1) and 276 C(2) of the Income Tax Act.
3. Assessment process, scrutiny of returns, and subsequent proceedings.
4. Transfer of case jurisdiction, notices issued, and assessment completion.
5. Appeals filed before various authorities and subsequent outcomes.
6. Appeal before the Hon'ble High Court and Special Leave Petition before the Supreme Court.
7. Legal arguments regarding the validity of criminal proceedings and exoneration in adjudication proceedings.

Analysis:
1. The application under Section 482 of the Code of Criminal Procedure sought to quash the order dated 01.02.2013 passed by the Special Court, Economic Offences, Patna, taking cognizance against the petitioner under Section(s) 276 C(1) and 276 C(2) of the Income Tax Act. The complaint alleged income tax evasion, leading to prosecution.
2. The petitioner, a former partner and then proprietor of a business, faced allegations of evading income tax for the period 1993-94. The Assessing Officer initiated proceedings under Section 276 C(1) and 276 C(2) of the Income Tax Act, with permission from the Commissioner of Income Tax, based on the complaint filed.
3. The assessment process involved filing returns, scrutiny by the Assessing Officer, and subsequent completion of assessment under Section 143(3) of the Act, resulting in raised demands and penalty initiation.
4. The case saw transfers of jurisdiction, issuance of notices, and completion of assessment under Section 143(3) read with Section 147 of the Act, leading to raised demands and penalty initiation.
5. Appeals were filed at various levels, including before the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal, with differing outcomes for the petitioner and the Revenue.
6. The petitioner filed an appeal before the Hon'ble High Court, challenging the Tribunal's decision, which was dismissed on the grounds that no substantial question of law arose for consideration.
7. Legal arguments were presented regarding the validity of criminal proceedings based on the assessment order, with references to the Supreme Court's decision on exoneration in adjudication proceedings leading to potential abuse of the court process.

This detailed analysis covers the legal journey of the case, from the initial complaint and assessment process to the appeals filed and the subsequent legal arguments presented before the High Court and the Supreme Court, providing a comprehensive understanding of the issues involved and the judicial decisions made at each stage.