The High Court held that prosecution u/ss 276C, 277, 278B, and ...

Prosecution for tax evasion invalid without confirmed penalty exceeding Rs. 50,000. Penalty deleted by ITAT, so prosecution unwarranted. Mens rea essential for prosecution.

Case Laws Income Tax

July 2, 2024

The High Court held that prosecution u/ss 276C, 277, 278B, and 278E for tax evasion was invalid as it violated CBDT guidelines. Prosecution was premature without the penalty confirmed by ITAT, against the instructions. The CBDT policy requires processing for prosecution only after a penalty exceeding Rs. 50,000 is confirmed. As the ITAT set aside the penalty, prosecution was deemed unwarranted. Mens rea is essential for prosecution, and since ITAT deleted the penalty, continuing prosecution was unjust. The Supreme Court precedent establishes that penalty and prosecution go together; when penalty is deleted, prosecution cannot proceed. With no appeal filed against the ITAT order, prosecution was barred by finality. Following a SC ruling, exoneration in departmental proceedings leads to the failure of criminal prosecution. Petitions were allowed.

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The High Court held that prosecution u/ss 276C, 277, 278B, and ...

Prosecution for tax evasion invalid without confirmed penalty exceeding Rs. 50,000. Penalty deleted by ITAT, so prosecution unwarranted. Mens rea essential for prosecution.

Case Laws Income Tax

July 2, 2024

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