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2018 (12) TMI 413 - HC - Income TaxStay of demand - Held that - Short term and long term capital gains are supported by the documentary evidence and that the transactions relating two shares are routed through the registered stock broker and through the concerned stock exchange and each and every financial transactions are through bank and it is submitted that without evidence of the falsification of the records or evidence of a false statement by the petitioner, there is no scope for any prosecution of the petitioner under Section 277 of the Income Tax Act, 1961. In terms of order dated 22.06.2018, the photocopy has been received and the same has been perused by this Court. Considering the nature of complaint and the stand taken by the petitioner herein, this Court having seen that since notice was issued on 26.03.2018 and more than 5 months have been passed, this Court is inclined to stay being proceedings of pending before the learned Court of the Chief Judicial Magistrate, Kamrup(M), Guwahati-cum- Judicial Magistrate, First Class, Kamrup(M), Guwahati till the next returnable date.
Issues:
1. Prayer for interim relief regarding prosecution under Section 277 of the Income Tax Act, 1961. 2. Stay on proceedings of C.R. Case No.837/2018 before the Chief Judicial Magistrate. Analysis: 1. The petitioner's senior counsel argued that the complaint petition by the Income Tax authorities did not disclose any cognizable offense. It was contended that the petitioner's income statements regarding short term and long term capital gains were supported by documentary evidence. The transactions were conducted through registered stockbrokers, stock exchanges, and banks. The counsel emphasized the lack of evidence for falsification or false statements, asserting no grounds for prosecution under Section 277 of the Income Tax Act, 1961. 2. The Court, after reviewing the nature of the complaint and the petitioner's submissions, noted that more than five months had passed since the notice was issued. In light of this, the Court decided to stay the proceedings of C.R. Case No.837/2018 before the Chief Judicial Magistrate until the next hearing date. The matter was adjourned to 08.01.2019 for further proceedings. The Court directed a copy of the order to be provided to the Standing Counsel for the Income Tax Department, acknowledging the need for additional time to obtain instructions in the matter.
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