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2019 (11) TMI 217 - HC - Income TaxStay of criminal proceedings against the petitioners in the competent court - assessee wilfully not filed the return of income tax for the assessment year 2007-08 within the prescribed time and that they have committed the offence punishable under Section 276CC - HELD THAT - In the instant case, the prosecution is u/s 276CC of the Act for wilful failure to file returns within due time. It does not depend on the assessment of tax. The decision in Sasi Enterprises 2014 (2) TMI 19 - SUPREME COURT squarely applies to the facts of the present case. Therefore, I find that this is not fit case in which the supervisory jurisdiction of this Court under Article 227 of the Constitution should be invoked to stay the criminal proceedings against the petitioners in the competent court. Petitioners has argued at length on the merits of the complaint filed against them. This is not a petition for quashing the proceedings against the petitioners. Therefore, it is not necessary to advert to those contentions.
Issues:
1. Petition to keep criminal proceedings in abeyance pending appeal before Commissioner of Income Tax. 2. Interpretation of Section 276CC of the Income Tax Act, 1961. 3. Relevance of appellate proceedings on criminal prosecution. 4. Application of legal precedents in determining the outcome of the case. Issue 1: The petitioners sought a direction to keep criminal proceedings on hold in a case where they were accused of wilfully not filing income tax returns for the assessment year 2007-08. They argued that the decision in their appeal before the Commissioner of Income Tax would impact the prosecution against them. Issue 2: The Court analyzed the provisions of Section 276CC of the Income Tax Act, 1961, under which the petitioners were charged. It was noted that the offence of wilful failure to file returns within due time, as per Section 276CC, is not contingent upon the assessment of tax, unlike in other sections related to concealment of income. Issue 3: Legal precedents were cited by both parties to support their arguments regarding the relevance of appellate proceedings on criminal prosecution. The Court differentiated cases where the conclusions of appellate authorities impact criminal proceedings from the present case, where the prosecution under Section 276CC was deemed independent of the appeal process. Issue 4: The Court examined various judgments, including K.C.Builders and Commissioner of Income Tax v. Bhupen Champak Lal Dalal, to determine their applicability to the current case. The decision in Sasi Enterprises was found to be directly relevant, emphasizing that the pendency of appellate proceedings does not preclude the initiation of prosecution under Section 276CC. Consequently, the Court dismissed the petition, stating it was not a suitable case to stay the criminal proceedings against the petitioners based on the legal analysis and precedents cited.
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