2024 (4) TMI 459 - HC - Income Tax

Settlement Commission immunity from prosecution under Section 276CC quashes all criminal proceedings against petitioner

Jasbir Singh Ryait Versus Assistant Commissioner of Income Tax

The Punjab and Haryana HC quashed prosecution proceedings under Section 276CC of the Income Tax Act, 1961, after the Settlement Commission granted ... Prosecution u/s 276CC - Settlement Commission has already granted immunity from prosecution to the petitioner - HELD THAT:- In Ashirvad Enterprises and others Vs. State of Bihar and another, 2004 (3) TMI 10 - SUPREME COURT there were allegations of tax evasion. Complaint u/s 276C of the Act was filed. However, on application moved before the Settlement Commission, the orders were passed according immunity from prosecution. Said order was passed before the institution of the proceedings for prosecution. The decision was not questioned by the Income Tax Authorities and attained finality. In these circumstances, Hon’ble Supreme Court quashed the proceedings. In Mohan Lal Darshan Kumar and others Vs. S.P. Bookal Income Tax Officer and another,1996 (3) TMI 124 - PUNJAB AND HARYANA HIGH COURT, quashing under Section 482 CrPC was sought in respect of offence under Section 276(c)(1) of the Act besides Section 193, 467, 471, 34 IPC. The application of the petitioner under Section 245H of the Act was allowed by the Settlement Commission vide which the immunity from prosecution under the Act/IPC was granted. In these circumstances, this Court allowed the quashing of the complaint. Both the aforesaid authorities are applicable to the facts of the present case. In the present case also, after filing of the complaint, but before framing of charge, the Settlement Commission has already granted immunity from prosecution to the petitioner. Therefore, continuation of the complaint will be gross misuse of the process of law. The complaint pending in the Court of ld. Chief Judicial Magistrate, Ludhiana, u/s 276CC of Income Tax Act, 1961, besides summoning order framing charges against the petitioner and all the consequential proceedings arising from are hereby quashed. Issues involved: Petition for quashing of complaint u/s 482 CrPC, Prosecution under Section 276CC of Income Tax Act, 1961, Settlement Commission's order granting immunity.Issue 1: Quashing of Complaint under Section 276CCThe petitioner filed a petition u/s 482 CrPC seeking to quash a complaint under Section 276CC of the Income Tax Act, 1961, along with summoning order and charges framed against him. The petitioner argued that the matter had already been settled by the Settlement Commission, which granted him immunity from prosecution. The complaint was based on a delay in filing the Income Tax Return, and the petitioner had provided detailed reasons in response. Despite the Settlement Commission's order, the respondent continued to prosecute the petitioner, leading to the petition for quashing the complaint.Issue 2: Settlement Commission's OrderThe Settlement Commission had granted immunity to the petitioner from prosecution after he applied for settlement of the case. The order dated 21.06.2018 under Section 245D(4) of the Act settled the matter for various assessment years, including notice under Section 153A and 143(2) of the Act. The petitioner's compliance with the disclosure requirements and cooperation with the Commission led to the grant of immunity. The petitioner's case was similar to past cases where immunity was granted before the institution of prosecution proceedings, as highlighted in legal precedents.Issue 3: Legal PrecedentsLegal precedents such as Ashirvad Enterprises and Mohan Lal Darshan Kumar cases were cited to support the petitioner's argument for quashing the complaint. These cases emphasized that once immunity from prosecution was granted by the Settlement Commission, the continuation of the complaint would amount to a misuse of the legal process. The judgments highlighted the importance of full disclosure and cooperation by the applicant in settlement proceedings to qualify for immunity.ConclusionThe High Court, in the absence of representation from the respondent, quashed the complaint, summoning order, and charges against the petitioner. The court noted that the Settlement Commission had already granted immunity to the petitioner, making the continuation of the complaint unjustified. The legal precedents and the Settlement Commission's order supported the decision to quash the proceedings, ensuring that the petitioner was protected from prosecution based on the settled matter.