2024 (12) TMI 1180 - SCH - Income Tax

Prosecution Proceedings initiated u/s 276C - Bogus LTCG - guilty mind i.e., mens rea - willful evasion of tax on claims made under the head LTCG/Short Term Capital Loss - allegation of crime invoking Section 200 of the CrPC for offence punishable under Section 276C - As decided in 2024 (1) TMI 1007 - KARNATAKA HIGH COURT mens rea is an element that is to be present in a proceeding u/s 271. The mere fact of not accurate tax, not exact tax or erroneous tax would not lead to the proceedings u/s 276 of the Act. Court taking Cognisance ought to have referred to and recorded the reasons why the said Court believes that an offence is made out so as to take Cognisance more so on account of the fact that it is on taking Cognisance that the criminal law is set in motion insofar as accused is concerned and there may be several cases and instances where if the Court taking Cognisance were to apply its mind, the Complaint may not even be considered by the said Court taking Cognisance let alone taking Cognisance and issuance of Summons. Thus the order taking Cognisance is not in compliance with applicable law and therefore is set aside. Proceedings pending before the Special Court (Economic Offences) Bengaluru in these cases stand quashed. HELD THAT - After hearing learned Additional Solicitor General, we are not satisfied that any case for interference is made out under Article 136 of the Constitution of India. Special Leave Petitions are, accordingly, dismissed, leaving the question of law to be decided, if necessary in some other appropriate case.

Summary

The Supreme Court dismissed the Special Leave Petitions, stating that no case for interference was made out under Article 136 of the Constitution of India. Delay was condoned, and pending applications were disposed of.