2020 (10) TMI 1151 - HC - Income Tax

Jurisdiction for initiating prosecution proceedings u/s 276C(1) - competent Authorities as defined in Section 279 - Unaccounted cash seized in search - Show Cause Notice of Prosecution of the Assessee/Petitioner under Section 276C - HELD THAT - Writ Appeal has been rendered infructuous and we need not decide on the merits of the contentions sought to be raised before us for the simple reason that the assailed Show Cause Notice dated 31.10.2017 since ended in final prosecution order dated 21.6.2018, which was neither under challenge before the learned Single Judge nor before us. Appellant is free to challenge the said order in accordance with law by taking appropriate remedies and lest our observations prejudice the case of the Assessee in any manner since Crl.O.P. filed by the Assessee under Section 482 of the Code of Criminal Procedure is also pending, we are not inclined to pronounce upon the merits of the contentions raised by the learned counsel for the Appellant/Assessee. Writ Appeal is dismissed as having been rendered infructuous in view of the subsequent developments and leaving the Appellant free to assail the impugned sanction order in accordance with law or to raise his defence before the learned Competent Court which is seized of the Trial in the matter.

Summary

Issues:
Jurisdiction of the Respondent to issue Show Cause Notice of Prosecution under Section 276C of the Income Tax Act, 1961.

Analysis:
The Writ Appeal was filed by the Assessee against the order dismissing W.P.No.29464 of 2017 challenging the Show Cause Notice of Prosecution under Section 276C of the Income Tax Act, 1961. The Assessee's residence was searched, and unaccounted cash was seized by the Income Tax Authorities. The main contention raised was the lack of jurisdiction of the Respondent-Principal Director of Income Tax (Investigation) to issue the Show Cause Notice as per Section 279 of the Act.

The Senior Standing Counsel for the Respondent contended that the Writ Appeal had become infructuous as the sanction order for prosecution against the Assessee had been passed, and a Complaint Case was pending trial in the court of Additional Chief Metropolitan Magistrate. The Assessee had also filed a petition under Section 482 of the Criminal Procedure Code, which was pending before a Single Judge of the court.

The court opined that the Writ Appeal had become infructuous due to subsequent developments, as the Show Cause Notice had culminated in a final prosecution order which was not challenged before the court. The court held that the Assessee was free to challenge the order in accordance with the law and declined to pronounce on the merits of the contentions raised by the Assessee's counsel. The Writ Appeal was dismissed, allowing the Assessee to challenge the sanction order or present a defense before the Competent Court handling the trial. No costs were awarded, and the connected Miscellaneous Petition was also dismissed.