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TMI Blog2023 (3) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... e not continued without periodic application of mind by the Originating Agency. In the present case, the following facts are borne in mind by this Court- (i) The Petitioner has participated in the investigation of the Income Tax department and his statements stand recorded. (ii) The assessment is already completed and the demand has been raised. (iii) 20% of the demand has already been deposited before the CIT (Appeals) and the proceedings are now pending before the CIT (Appeals). (iv) The proceedings under the Black Money Act have been concluded and the demanded amount has been paid. (v) No prosecution has been launched by the Respondent under the Income Tax Act. (vi) No prosecution has been launched even under the Black Money Act. (vii) The LOC has been continued since 2019 without being reviewed. In view of the above factual and legal position under the OM, the LOC does not deserve to be continued and the same is quashed. The petition is allowed in the above terms. - W.P.(C) 11604/2022 and CM APPL. 8921/2023 - - - Dated:- 22-3-2023 - JUSTICE PRATHIBA M. SINGH For the Petitioner Through: Mr. R. K. Handoo, Mr. Yoginder Handoo, Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been raised against the Petitioner. Further, it is stated that the assessment orders have been challenged by the Petitioner before the CIT (Appeals) for AY 2019 -20 and 2020-21. 7. The submission of Mr. Handoo, ld. Counsel appearing for the Petitioner is that in the appeal before the Commissioner of Income Tax (Appeals) for AY 2019-20 and 2020-21, the Petitioner has paid 20% of the demand. The same is in terms of the Memorandum issued by the CBDT, where, if the assessee is in appeal before the CIT(Appeals), the assessing officer shall grant stay of demand till disposal of appeal upon payment of 20% of the demand. It is stated that 20% of the demand of Rs. 9,21,30,796/- for AY 2019-20 and AY 2020-21 which comes to Rs. 1,84,26,159/- ( Rs.1,33,36,159/- vide challans dated 24th June 2022 bearing challan serial nos. 13318 14635 and the balance Rs. 50,90,000/- adjusted towards cash seized during the search) has been deposited. Thus, it is submitted that there is a stay of the demand. The matter is now pending adjudication with the CIT (Appeals). 8. It is further submitted that the Petitioner has repeatedly requested for withdrawal of the LOC. However, the said LOC continues to op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... might jeopardize interest of revenue due to following reasons: a. Avoidance of payment of huge demand under Income Tax Act, 1961 b. Avoidance of penalty proceedings and penalty demand u/s 271AAB(1A) of Income Tax Act, 1961 for AY 2020-21 in range of 10% to 30% of undisclosed income. c. Avoidance of penalty proceedings and penalty demand u/s 271AAC for AY 2019-20 which would result in penalty of 10% of tax payable u/s 115BBE of Income Tax Act, 1961. d. Avoidance of penalty proceedings under Black Money Act. e. Evasion of prosecution proceedings which may also be contemplated under Income Tax Act, 1961 or Black Money Act, 2015 for tax evasion. 13. He further submits that under Section 276C of the IT Act, if there is a wilful evasion of tax, the person can be prosecuted by the Income Tax department. However, he concedes that till date no sanction for prosecution has been granted under Section 279. 14. A perusal of the IT Act would show that clearly under Section 279A of the IT Act, certain offences under the Act are not treated as cognizable offences in terms of the Code of Criminal Procedure, an offence under Section 276C being one of them. Moreover, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 79. Prosecution to be at instance of Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. (1) A person shall not be proceeded against for an offence under section 275A, section 275B, section 276, section 276A, section 276B, section 276BB, section 276C , section 276CC, section 276D, section 277, section 277A or section 278 except with the previous sanction of the Principal Commissioner or Commissioner or Commissioner (Appeals) or the appropriate authority: Provided that the Principal Chief Commissioner or Chief Commissioner or, as the case may be, Principal Director General or Director General may issue such instructions or directions to the aforesaid income-tax authorities as he may deem fit for institution of proceedings under this sub-section. Explanation . For the purposes of this section, appropriate authority shall have the same meaning as in clause (c) of section 269UA. (1A) A person shall not be proceeded against for an offence under section 276C or section 277 in relation to the assessment for an assessment year in respect of which the penalty imposed or imposable on him under section 270A or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or directions (including instructions or directions to obtain the previous approval of the Board) to other income-tax authorities for the proper composition of offences under this section. 279A. Certain offences to be non-cognizable. Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), an offence punishable under section 276B or section 276C or section 276CC or section 277 or section 278 shall be deemed to be non-cognizable within the meaning of that Code. 15. The assessment order is already under challenge before the CIT (Appeals) where 20% of the demand amount has already been stated to have been deposited. Insofar as the Black Money Act proceedings are concerned, the Petitioner has already deposited the amount demanded. 16. A perusal of the Paragraphs (H), (I) and (J) of the OM clearly shows that the LOC requires a periodic review. The said clauses read: (H) Recourse to LOC is to be taken in cognizable offences under IPC or other penal laws. The details in column IV in the enclosed Proforma regarding reason for opening LOC must invariably be provided without which the subject of an LOC will not be arreste ..... X X X X Extracts X X X X X X X X Extracts X X X X
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