2020 (11) TMI 276 - HC - Income Tax

Tax Evasion Petition - Black Money (Undisclosed Foreign Income and Assets) - petition has been filed u/s 482 Cr.P.C. seeking setting aside the order passed by learned ACMM (Spl. Acts), Central District, Tis Hazari Courts, Delhi - status report regarding the status of complaint of Applicant and investigation, if any, carried out on complaint of Applicant be called, in the interest of justice - HELD THAT - ACMM has usurped the inherent jurisdiction of this Court which is impermissible under the law. Moreover, in cases pertaining to Tax evasion petitions like the present case, this Court also exercises its powers sparingly and it is a well-settled principle that only the broad outcome of the Tax evasion petition may be communicated to the complainant, that too upon culmination of the investigation. The Income Tax Department has a specific framework of investigations dealing with the TEPs and information in respect of the investigation carried out by the office of Directorate General of Income Tax (Investigation) is not required to be intimated to the complainant as the said office is even outside the purview of the RTI Act, 2005. Providing information regarding an ongoing investigation to its informer is not only inappropriate, but also injurious to the ongoing investigation. Without observing much in the present petition, since the application filed by respondent no.1 before the learned ACMM was without the provisions of either Cr.P.C. or Income Tax Act which is bad in law. Moreover, the orders passed in such versions by learned Judge are also illegal, perverse and without jurisdiction.

Summary

Issues:
1. Jurisdiction of the ACMM to call for a status report from the Investigation Wing of the Income Tax Department.
2. Compliance with court directions by the Principal Director of Income Tax (PDIT).
3. Applicability of Cr.P.C. and Income Tax Act provisions in the case.
4. Usurpation of inherent jurisdiction by the ACMM.
5. Confidentiality of ongoing investigations and information sharing with informers.

Jurisdiction of ACMM:
The petitioner filed a petition under section 482 Cr.P.C. seeking to set aside orders passed by the ACMM calling for a status report from the Income Tax Department. The petitioner argued that the ACMM lacked jurisdiction to issue such orders, citing a case precedent where it was held that only the High Court possesses inherent powers under Cr.P.C. The ACMM was criticized for not specifying the legal provisions under which the orders were issued, leading to a challenge on the jurisdiction of the ACMM in calling for the status report.

Compliance with Court Directions:
The PDIT was accused of deliberate disobedience of court orders by failing to file a status report as directed by the ACMM. The petitioner sought contempt proceedings against the PDIT for non-compliance. The court expressed disappointment in the conduct of the PDIT, emphasizing the importance of adhering to court orders. Despite the PDIT's claim of not receiving the court order, the court granted one more opportunity for compliance before considering further action.

Applicability of Legal Provisions:
The petitioner argued that the ACMM's orders were passed without jurisdiction as there is no provision in Cr.P.C. for calling a status report from the Income Tax Department when no complaint is pending before the court. The petitioner highlighted the absence of procedural compliance and the ACMM's alleged misuse of powers under Cr.P.C. and the Income Tax Act. Additionally, the ACMM was criticized for not considering the relevant provisions of the Black Money Act in the case history.

Usurpation of Inherent Jurisdiction:
The ACMM was accused of usurping the inherent jurisdiction of the High Court by issuing orders beyond the scope of its authority. The petitioner contended that the ACMM's actions were impermissible under the law, emphasizing that only the High Court possesses inherent powers. The ACMM's failure to follow specified legal provisions and its alleged overreach were central to the petitioner's argument.

Confidentiality of Ongoing Investigations:
The court emphasized the importance of maintaining confidentiality in ongoing investigations, particularly in cases of tax evasion petitions. It highlighted that sharing information with informers can impede investigations and expose officers to external pressures. Relying on a previous decision, the court stressed the detrimental effects of intrusive supervision on investigative processes. The court concluded that the application filed by the respondent before the ACMM lacked legal basis and the orders passed were deemed illegal, perverse, and without jurisdiction.

This detailed analysis covers the various issues raised in the judgment, providing a comprehensive overview of the legal arguments and decisions made by the court.