2025 (5) TMI 1428 - HC - Income Tax

High Court Nullifies Non-Bailable Warrant for Bailable Tax Offense Due to Insufficient Reasoning and Procedural Flaws Under Section 276C(2)

HC quashed a non-bailable warrant for a bailable tax offence under Section 276C(2), finding the Magistrate's order 'cryptic' and lacking reasoned ... Non bailable warrant issued by the trial court against the petitioner for offence punishable u/s 276C (2) - HELD THA:- Having perused the provisions of Section 276C (2) of the IT Act under which the maximum sentence is only three years and the offence is bailable in nature, which the parties would not dispute. Magistrate however not taking into consideration such position, has mechanically passed the order issuing the non-bailable warrant against the petitioner in a bailable offence. On a perusal of the said order, it is clear that no reasons are recorded. It is a cryptic order which lacks application of mind. This would cause prejudice to the petitioner in the given the facts and circumstances as he would face an order of non bailable warrant in a case of bailable offence. Further according to the learned counsel for the petitioner, the Advocate for the petitioner was very much present when the said order dated 9 April 2025 was passed, which was overlooked by the learned Magistrate. In such circumstances, such order would be contrary to law. Revenue would seek time for instructions today. However, fairly he would not oppose this limited relief sought for by the petitioner at this stage.The order passed by the Additional Chief Metropolitan Magistrate is quashed and set aside. The Bombay High Court, under Article 482 CrPC and Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, quashed the Additional Chief Metropolitan Magistrate's order dated 9 April 2025 issuing a non-bailable warrant against the petitioner for an offence under Section 276C(2) of the Income Tax Act, 1961. The Court emphasized that Section 276C(2) prescribes a maximum sentence of three years and is a bailable offence. The Magistrate's order was 'cryptic,' lacked 'application of mind,' and failed to record reasons, thereby causing prejudice by issuing a non-bailable warrant in a bailable offence. The Court noted that the petitioner's Advocate was present and had filed a Vakalatnama and an application for exemption from appearance, which the Magistrate overlooked. The Court held the order 'contrary to law' and accordingly set it aside, clarifying that this does not affect the merits of the ongoing proceedings. The challenge to the earlier order dated 5 December 2019 remains pending and is adjourned for further consideration on 16 June 2025. The revenue is directed to file a reply by then.