2020 (10) TMI 1151 - HC - Income Tax

Court dismisses Writ Appeal challenging Income Tax Act prosecution notice, advises Assessee on further legal steps

Krishnaswami Vijayakumar Versus The Principal Director of Income Tax (INV), Chennai

Krishnaswami Vijayakumar Versus The Principal Director of Income Tax (INV), Chennai - TMI Issues:Jurisdiction of the Respondent to issue Show Cause Notice of Prosecution under Section 276C of the Income Tax Act, 1961.Analysis:The Writ Appeal was filed by the Assessee against the order dismissing W.P.No.29464 of 2017 challenging the Show Cause Notice of Prosecution under Section 276C of the Income Tax Act, 1961. The Assessee's residence was searched, and unaccounted cash was seized by the Income Tax Authorities. The main contention raised was the lack of jurisdiction of the Respondent-Principal Director of Income Tax (Investigation) to issue the Show Cause Notice as per Section 279 of the Act.The Senior Standing Counsel for the Respondent contended that the Writ Appeal had become infructuous as the sanction order for prosecution against the Assessee had been passed, and a Complaint Case was pending trial in the court of Additional Chief Metropolitan Magistrate. The Assessee had also filed a petition under Section 482 of the Criminal Procedure Code, which was pending before a Single Judge of the court.The court opined that the Writ Appeal had become infructuous due to subsequent developments, as the Show Cause Notice had culminated in a final prosecution order which was not challenged before the court. The court held that the Assessee was free to challenge the order in accordance with the law and declined to pronounce on the merits of the contentions raised by the Assessee's counsel. The Writ Appeal was dismissed, allowing the Assessee to challenge the sanction order or present a defense before the Competent Court handling the trial. No costs were awarded, and the connected Miscellaneous Petition was also dismissed.