Prosecution sanction under the Income-tax Act challenged for denial of hearing and alleged non-compliance with CBDT approval circulars.

The article discusses a challenge to prosecution sanction under Section 279(1) of the Income-tax Act, 1961, on the grounds that personal hearing was denied and the approvals required under CBDT Circular No. 24/2019 and Circular No. 5/2020 were not properly demonstrated. It notes the grievance that the sanction process should have reflected consideration by the prescribed collegium of two CCIT-rank officers, but the original approval record was not produced at the hearing. No final determination on the validity of the sanction was made; the matter was adjourned for production of the original record and further proceedings based on the impugned sanction were temporarily restrained.

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Issues: Challenge to the sanction for prosecution under Section 279(1) of the Income-tax Act, 1961 on the grounds of denial of personal hearing and non-compliance with CBDT Circular No. 24/2019 dated 09.02.2019 and Circular No. 5/2020 dated 23.01.2020.

Analysis: The petitioner assailed the prosecution sanction on the basis that a request for personal hearing was not considered and that the requisite prior approval contemplated by the circulars, including approval by the collegium of two CCIT-rank officers, was not shown. The respondent was unable to produce the original approval record at that stage and sought time to do so.

Outcome: No final adjudication was made on the validity of the sanction. The matter was adjourned for production of the original record, and further proceedings on the basis of the impugned sanction were restrained temporarily.

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