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2023 (10) TMI 274 - HC - Income TaxProper authority / Jurisdiction to launch Prosecution Proceedings - Prosecution launched by the Assistant Director of Income Tax - Offences punishable u/s 276C(1) and 278B - complaint under Section 190 R/w. Section 200 of Cr.P.C. - HELD THAT - As rival contentions of both the parties and the precedents relied upon by them, it is evident that once sanction has been given to a particular authority, i.e., the Deputy Director of Income Tax, the prosecution has to be launched by him alone and not by the Assistant Director of Income Tax, who did not have the power to launch the prosecution proceedings. Though it is the contention of the learned Standing Counsel for the respondent that the Deputy Director of Income Tax is a senior officer and the Assistant Director of Income Tax is a junior officer and both were doing the same duties, the said contention cannot be taken into consideration as in the present case, the sanction is accorded to the Deputy Director of Income Tax for initiating prosecution and not to the Assistant Director of Income Tax. In view of the above discussion, this Court is of the considered opinion that it is a fit case to quash the proceedings against the petitioner.
Issues Involved:
1. Legality of the prosecution initiation. 2. Competence of the authority granting sanction. 3. Validity of the prosecution by a lower-ranked officer. Summary: 1. Legality of the Prosecution Initiation: The petitioner/accused sought to quash the proceedings in C.C.No.263 of 2017 under Section 482 of Cr.P.C. The respondent filed a complaint under Section 190 R/w. Section 200 of Cr.P.C. for offences under Sections 276C(1) and 278B of the Income Tax Act, 1961. The complaint was based on a survey operation under Section 133A of the Act, revealing that the petitioners sold land at rates below the Sub-Registrar Office value and failed to file income tax returns or pay taxes for the assessment years 2015-2016 and 2016-2017. 2. Competence of the Authority Granting Sanction: The petitioners contended that the Principal Director of Income Tax (Inv.), Hyderabad, who issued the sanction under Section 279(1) of the Act, was not the competent authority. The sanction should have been accorded by an officer at the level of Chief Commissioner of Income Tax/Director General of Income Tax. Even if the Principal Director was competent, the sanction was granted to the Deputy Director of Income Tax, not the Assistant Director who initiated the prosecution. 3. Validity of the Prosecution by a Lower-Ranked Officer: The prosecution was initiated by the Assistant Director of Income Tax, who is lower in rank to the Deputy Director of Income Tax. The petitioners argued that this was a grave irregularity. The respondent countered that the duties of the Deputy Director and Assistant Director are similar, and the change in incumbency due to transfers justified the Assistant Director's actions. However, the court found that once sanction is given to a particular authority, the prosecution must be launched by that authority alone. Judgment: The court concluded that the prosecution initiated by the Assistant Director of Income Tax, who did not have the power to do so, was invalid. The proceedings against the petitioner in C.C.No.263 of 2017 were quashed. The court emphasized that the authority initiating prosecution must have the proper sanction, and any deviation constitutes an illegal action.
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