2018 (5) TMI 1388 - HC - Income Tax

Eligibility to scheme known as Income Declaration Scheme, 2016 - charges framed by the Special Judge, Anti Corruption, CBI against the petitioner - Held that - Admittedly Section 420 of IPC is an offence which comes under Chapter XVII of the IPC. The Scheme, of which the petitioner is seeking benefit, categorically stipulates that in case prosecution is going on against a person for any offence punishable under Chapter IX or Chapter XVII of the IPC, he is not liable to get benefit of the Scheme. Although the order dated 24.10.2016 does not refer to prosecution under Section 420 of IPC but of Corruption of Prevention Act, but since prosecution is going on against the petitioner for an offence which comes under Chapter XVII of the IPC, petitioner is not liable to be granted benefit of the said Scheme.

Summary

Issues:
1. Eligibility under the Income Declaration Scheme, 2016.
2. Denial of benefit due to prosecution under specific acts.
3. Interpretation of relevant legal provisions.
4. Impact of charges framed under IPC on Scheme eligibility.

Analysis:
1. The judgment dealt with the eligibility criteria under the Income Declaration Scheme, 2016, introduced by the Government of India to allow assessees to disclose undisclosed assets/income. A crucial condition for availing the scheme was the exclusion of individuals facing prosecution under specific acts, including the Prevention of Corruption Act, 1988.

2. The petitioner sought benefit under the Scheme but was denied by the Income Tax Authorities citing a prosecution initiated by the CBI against the promoters of a company associated with the petitioner. The petitioner argued that the prosecution pertained to plots purchased by a different company before an amalgamation, and the charges framed did not fall under the Prevention of Corruption Act.

3. The court analyzed the legal provisions and found that while the charges framed against the petitioner were under Sections 120-B, 420, 468, and 471 of the IPC, which are part of Chapter XVII, the Scheme explicitly excluded individuals facing prosecution under Chapter IX or Chapter XVII of the IPC from availing its benefits. Despite the absence of specific mention of IPC Section 420 in the denial order, the court concluded that since the petitioner faced prosecution under an IPC chapter, they were ineligible for the Scheme.

4. Consequently, the court dismissed the writ petition, emphasizing that the petitioner's ongoing prosecution under IPC provisions rendered them ineligible for the benefits of the Income Declaration Scheme, 2016. The judgment underscored the importance of strict adherence to the eligibility criteria outlined in the Scheme, even in cases where the specific offense mentioned in the denial order differed from the IPC sections under which charges were framed against the petitioner.