2010 (12) TMI 54

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.... appeal of the assessee holding that the assessee was entitled to the Voluntary Discloser Income Scheme ( for short VDIS) under Finance Act, 1997. (2) The question of law involved in this appeal is as under:- Whether the ITAT wrongly interpreted the expression " in relation to prosecution" in section 78 (b) of Finance Act, 1997, in holding that the assessee against whom First Information Report was lodged (but no charge sheet was filed ) was entitled to the benefit of VDIS ? (3) Brief facts of the case :- On receiving the information from Central Bureau of Investigation (CBI) a notice under section 148 Income Tax Act was issued to the assessee by the Assessing Officer (for short AO) as to why the assessment be not made in respec....

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.... not apply :- (a).......... (b) in relation to prosecution for any offence punishable under Chapter IX or Chapter XVII of the Indian Penal Code, 1860, (45 of 1860), the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985), the Terrorists and Disputive Activities (Prevention) Act, 1987 (28 of 1987), the Prevention of Corruption Act, 1988 (49 of 1988) or for the purpose of enforcement of any civil liability; (c) ........." (6) It is not disputed that assessee/respondent Meena Goyal filed her Income Tax return on 17.12.1997, for the assessment year 1993-1994, in the status of individual showing her income at Rs. 38,910/-. It appears that an information was received by the Income Tax Authorities from the CBI relating to....

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....s whether the person against whom only First Information Report is lodged, but the charge sheet is not filed , was barred from taking benefit of the scheme of VDIS, or not, in view of the provision contained in Sub section (b) of section 78 of the Finance Act, 1997. Clause (b) begins with the expression " in relation to prosecution". Learned counsel for the appellants submitted that since the assessee could have been prosecuted under Prevention of Corruption Act, 1988, due to the investigation pending against her, as such, she was not entitled to VDIS. (7) We have carefully gone through the provision contained in section 78 (b) of Finance Act, 1997. It does not say anything as to pending investigation. In our opinion a prosecution can be....