2024 (9) TMI 1456 - HC - Income Tax

Acquitted Petitioner Eligible for Settlement Under Tax Act Despite Pending Appeals; Future Conviction May Reopen Case.

Sharad Kumar Versus The Principal Commissioner of Income Tax, The Income Tax Officer, Corporate Ward 3 (1), Chennai

The HC allowed the writ petition, ruling that the petitioner, acquitted before filing declarations under the Direct Tax Vivad Se Vishwas Act, 2020, was ... Benefit of Direct Tax Vivad Se Vishwas - HELD THAT:- No doubt, there is an embargo and certain categories of persons from availing the benefit of the amnesty under the Act. As far as the petitioner is concerned, sting if any would stand attracted in terms of Section 9(c) of the Act which reads as under:- “9(c) to any person in respect of whom prosecution for any offence punishable under the provisions of the Unlawful Activities (Prevention) Act, 1967, the Narcotic Drugs and Psychotropic Substances Act, 1985, the prevention of Corruption Act, 1988, the Prevention of Money Laundering Act, 2002, the Prohibition of Benami Property Transactions Act, 1988 has been instituted on or before the filing of the declaration or such person has been convicted of any such offence punishable under any of those Acts;” A reading of the above provisions indicates that either a criminal case should be pending or it should have resulted in a conviction. There is no embargo for settling the dispute in respect of a person who has be acquitted before filing of the declaration. Therefore, there is no merits in the stand of the respondents. Thus, inclined to allow this Writ Petition with liberty to the respondents to recall the order in case conviction is sustained by the Delhi High Court against the petitioner. Issues:1. Whether the petitioner's declarations under the Direct Tax Vivad Se Vishwas Act, 2020 should be accepted despite the pendency of criminal cases.2. Whether the rejection of the petitioner's declarations was arbitrary and violated fundamental rights.3. Whether the appeal against the petitioner's acquittal affects the petitioner's eligibility to settle the case under the Act.Analysis:The petitioner sought a mandamus to direct the respondents to accept their declarations filed under the Direct Tax Vivad Se Vishwas Act, 2020. The petitioner had been acquitted in a criminal case but faced an appeal by the Department. The respondents contended that the petitioner's case fell under Section 9(c) of the Act due to pending criminal cases. The rejection of the declarations was justified, according to the respondents, and challenging the rejection was necessary before seeking a mandamus. The appeal against the petitioner's acquittal was seen as a continuation of the prosecution, rendering the petitioner ineligible to settle under the Act.In response, the petitioner cited a previous court decision to support their argument that the petitioner should not be deprived of settlement opportunities due to pending appeals. The court considered the arguments from both sides, reviewed the relevant provisions of the Act, and noted that the Act does not bar settlement for individuals acquitted before filing declarations. The court found no merit in the respondents' position and allowed the writ petition, granting liberty to recall the order if the petitioner is convicted by the Delhi High Court.In conclusion, the court allowed the writ petition, emphasizing that there was no prohibition for individuals acquitted before filing declarations to settle disputes under the Act. The judgment provided the respondents with the option to recall the order if the petitioner is convicted in the future.