Court Dismisses Petition Against Process Order for Income Tax Offences; Trial to Address Petitioner's Residence.

The HC dismissed the writ petition challenging the process issuance order against the petitioner for alleged offences under Sections 276B and 278B of the Income Tax Act, 1961. The court held that the complaint, sanction order, and Commissioner's order sufficiently established the petitioner's liability as a Director Incharge, despite the petitioner's claim of non-involvement and residence in the Netherlands. The court found the allegations in the complaint adequate to proceed with prosecution, emphasizing that the petitioner's residence would be addressed during the trial. No costs were awarded.

---

---

Issues:
The challenge in this petition is to the order dated 18th November, 2019 issuing process against the petitioner and others for alleged offence under Section 276B read with Section 278B of the Income Tax Act, 1961.

Judgment Summary:

Issue 1: Alleged Offence under Section 276B and 278B of the Income Tax Act, 1961

The petitioner, a professional executive director, claimed non-involvement in the company's affairs for the past six years and being a resident of Netherlands. The petitioner argued that the complaint's averments were insufficient to establish the alleged offence. The respondent, however, pointed to the sanction order designating the petitioner as a Director Incharge and responsible for the company's affairs, supported by the Commissioner's satisfaction of fulfilling conditions under Section 276B and 278B. The court found the complaint, sanction order, and Commissioner's order sufficient to establish the petitioner's liability, citing relevant case laws.

Issue 2: Sufficiency of Averments in the Complaint

The complaint detailed the accused's failure to pay taxes deducted under various sections of the Income Tax Act, 1961, attributing liability to the directors for the company's acts and omissions. The sanction order identified the directors responsible for the company's conduct and liable for prosecution under Section 278B. The court concluded that the complaint, along with the sanction order and Commissioner's order, met the necessary pleading requirements to establish a person's responsibility for the company's affairs.

Issue 3: Residence of the Petitioner

The petitioner's claim of residing in Netherlands for six years was disputed by the respondent, referring to the sanction order listing the petitioner's address as Navi Mumbai, Maharashtra. The court determined that the petitioner's actual residence would be addressed during the trial, emphasizing the current inquiry's focus on the sufficiency of the complaint's allegations. Considering the material before the Magistrate, including the sanction order and Commissioner's order, the court found no basis to interfere with the process issuance order.

In conclusion, the court dismissed the writ petition, stating that the respondent had established a sufficient case to proceed against the petitioner, with no costs awarded.

---