TaxTMI 
TaxTMI 
2018 (6) TMI 1473
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....TCP-1 vide F.No.4/TRO.CR-1/CC- Belgaum/ M.A. Zahid/2013-14 dated 18.06.2013 drawn up by the then Tax Recovery Officer (Central Range-1), Bangalore for A.Y. 2007-08 for recovery of arrears in your case along with the interest payable under section 220(2) of the Income Tax Act, 1961 and it is proposed to execute the above certificate by arrest and imprisonment of your person; You are hereby required to appear before the undersigned on the 02nd day of April 2018 at 11:05 AM and to show cause why you should not be committed to the civil prison in execution of the said certificate. Given under my hand and seal at Bangalore this 28th day of March 2018." 2. The case of the petitioner is that he has been carrying on business in the name and style of S.M.S.K. Mineral Trading Company at Hospet, Karnataka. He is an income tax assessee paying taxes regularly. In connection with the said business there have been certain demands from the Income Tax department, which were in excess to the taxes paid by the petitioner and as such, there was some dispute regarding the actual tax to be paid by the petitioner. 3. The petitioner received three notices to show cause in Form No. ITCP-25 dated 28.3.2....
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....sanction for offence punishable under section 276C(2) of the Act. The petitioner has to reply to the said notice. The Principal Commissioner of Income Tax either can accept the explanation or drop the proposal or issue sanction for filing complaint under section 200 of Cr.P.C. before the Special Court in terms of section 280A of the Act and the same would be dealt by the Special Court as per the provisions of the Criminal Procedure Code. The Income Tax Department has no power to arrest in the course of proceedings under section 276C(2) of the Income Tax Act. Therefore, the apprehension expressed by the petitioner is misplaced. 4(6) Show cause notice under Rule 73 of the Second Schedule is for non-payment of the tax dues pursuant to the demand raised by the Assessing Officer. Whereas the show cause notice under section 276C(2) of the Act is for willful attempt to evade payment of any tax, penalty or interest. In the present case, show cause notice under section 276C(2) of the Act has been issued for non-payment of admitted tax on the income voluntarily admitted by the petitioner, which is not under dispute. The attempt of the petitioner interlinking these two different proceedings ....
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.... on conviction by a Court in respect of any cognizable offence; (iii) the possibility of the applicant to flee from justice; and (iv) where the accusation has been made with the object of injuring or humiliating the applicant by having him so arrested, either reject the application forthwith or issue an interim order for the grant of anticipatory bail: Provided that, where the High Court or, as the case may be, the Court of Session, has not passed any interim order under this sub-section or has rejected the application for grant of anticipatory bail, it shall be open to an officer-in-charge of a police station to arrest, without warrant the applicant on the basis of the accusation apprehended in such application. * * * * * * (3) If such person is thereafter arrested without warrant by an officer in charge of a police station on such accusation, and is prepared either at the time of arrest or at any time while in the custody of such officer to give bail, he shall be released on bail, and if a Magistrate taking cognizance of such offence decides that a warrant should issue in the first instance against that person, he shall issue a bailable warrant in conformity with the ....
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....penalty that may be imposable on him under any other provision of this Act, he punishable,- (i) in a case where the amount sought to be evaded exceeds (twenty five hundred thousand rupees), with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine. There cannot be two opinions that section 276 is a penal provision which constitutes evasion of tax, penalty or interest an offence under the Income Tax and therefore by virtue of the First Schedule Part II of Cr.P.C., the offence under section 276 has to be classified as a non-bailable offence. 11. The scheme of the Income Tax Act provides for a separate machinery to try the offences under the Income Tax Act. By virtue of section 280-B of the Act, the offences under the Act are made triable by the Special Court. Section 280-B is extracted herebelow: 280-B. Offences triable by Special Court- Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974)- (a) the offences punishable under this Chapter shall be triable only by the Special Court, if so designated, for the area or areas or for cases or class or group of cases, as the case m....
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....Second Schedule of the Income Tax Act provides for the various modes of recovery. As per the said provision, if the amount mentioned in the notice is not paid within the time specified therein or within such further time as the Tax Recovery Officer may grant in his discretion, the Tax Recovery Officer shall proceed to realize the amount by one or more of the following modes:- (a) by attachment and sale of the defaulter's movable property; (b) by attachment and sale of the defaulter's immovable property; (c) by arrest of the defaulter and his detention in prison; (d) by appointing a receiver for the management of the defaulter's movable and immovable properties. 14. The petitioner in the instant case is not an 'offender' but a 'defaulter' as defined in the Second Schedule. Part V of the Second Schedule deals with arrest and detention of the defaulter. Rule 73 provides for issue of show cause notice. It states: Rule 73. Notice to show cause-(1) No order for the arrest and detention in civil prison of a defaulter shall be made unless the Tax Recovery Officer has issued and served a notice upon the defaulter calling upon him to appear before him on the date specified i....
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....satisfying the arrears, the Tax Recovery Officer may, before making the order of detention leave the defaulter in the custody of the officer arresting him or of any other officer for a specified period not exceeding 15 days, or release him on his furnishing security to the satisfaction of the Tax Recovery Officer for his appearance at the expiration of the specified period if the arrears are not so satisfied. (2) When the Tax Recovery Officer does not make an order of detention under sub- rule(1), he shall, if the defaulter is under arrest, direct his release. 16. Further Rule 86 provides for the remedy of appeal. It reads as follows, Rule 86 Appeals -[(1) An appeal from any original order passed by the Tax Recovery Officer under this Schedule, not being an order which is conclusive, shall lie to the (Principal Chief Commissioner or Chief Commissioner) or (Principal Commissioner or Commissioner) (2) Every appeal under this rule must be presented within thirty days from the date of the order appealed against. (3) Pending the decision of any appeal, execution of the certificate may be stayed if the appellate authority so directs, but not otherwise. 17. In the wake of the ....