TaxTMI 
TaxTMI 
2020 (11) TMI 228
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....funds were debited for investment in the stock market. The petitioner had entered into 165 share transaction during the financial year 2007-08 and filed his return of income for the assessment year 2008-09 on 05.02.2009 declared taxable income of Rs. 3,10,226/-. However, the petitioner has not disclosed any capital gain in the return of income filed for financial year 2007-08 relevant to the assessment year 2008-09. 2.1. Further alleged that the petitioner entered into 165 share transactions to the tune of Rs. 155.20 crores and short term capital gain arose from the said transactions is Rs. 52.13 crores. Though the tax has been deducted, it was not fully deducted and the petitioner did not disclose in his return of income under the head Capital Gain and paid the tax. Thus, the petitioner failed to show the same in his return of income and attempted to evade payment of tax. Only after deduction by the income tax department, the petitioner had share transactions during the relevant financial year and accepted the same. Therefore, the petitioner committed the offence punishable under Section 276C(1) of the Income Tax Act, 1961. 2.2. The learned Senior Counsel further submitted that ....
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....pital gain arose from the said transaction is Rs. 52.13 crores. After remitted the matter back for fresh consideration, the entire quantum of tax has been deducted and reduced the income tax. In fact, in the reduced amount major portion is interest for the tax and it is challenged by way of appeal. Therefore, the impugned complaint is nothing but clear abuse of law and it cannot be sustained as against the petitioner. Hence, he sought for quashment of the entire proceedings. 3. Per contra, the learned counsel appearing for the respondent filed counter and submitted that the complaint is not filed on the basis of any assessment order or assessment proceedings and it is in consequence of the concealment of share transactions in the return of income. The complaint has been filed after analysing the materials with the return of income and concluded that the transactions were suppressed and not brought in the return of income with a view to evade the payment of income tax due to the exchequer, thereby committed offence under Section 276C(1) of the Income Tax Act. 3.1. She further submitted that the petitioner had entered into 165 share transactions to the tune of Rs. 155.20 crores whi....
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....015 dated 28.09.2018 - Arun Arya Vs. Income Tax Officer v) Crl.O.P.No.28469 of 2018 batch dated 18.03.2019 - J.Dinakaran Vs. Deputy Director of Income Tax Therefore, she sought for dismissal of the quash petition. 4. Heard Mr.P.Kumar, learned Senior Counsel appearing for the petitioner, and Ms.M.Sheela, learned Special Public Prosecutor for IT cases appearing for the respondent. 5. The petitioner is a sole accused in the complaint lodged by the respondent for which the offence punishable under Section 276C(1) of the Income Tax Act, 1961, alleging that the petitioner had entered into 165 share transactions to the tune of Rs. 155.20 crores and it was not disclosed in the return of income filed for the assessment year 2008-09. The petitioner has filed return of income for the assessment year 2008-09 for Rs. 3,10,226/-. However, the above said transactions have been taxable income of Rs. 52,13,72,203/- and it was not brought as Capital Gain in the return of income by the petitioner. Further alleged that the petitioner being a Non Resident of India, residing in Dubai and carrying gold business in the name of M/s.Al Rayan Jewellery, Dubai and he assessed the tax under the jurisdic....
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....etitioner. The act of the petitioner established that he was with a view to evade the payment of tax with was due to the exchequer. Therefore, the order of assessment is nothing to do with the present proceeding. 8. Subsequently, the Income Tax department initiated assessment proceedings under Section 147 & 148 of the Income Tax Act, and determined the taxable income is would be Rs. 52,13,72,203/- and accordingly the demand was raised. Though it was set aside by the Income Tax Appellate Authority by an order dated 28.08.2018, it was observed that the share transactions were admittedly not disclosed by the assesse viz., the petitioner herein. Further observed that since the figures with regard to share transactions are claimed to be wrongly mentioned by the CIT(Appeals), the matter need to be reexamined. Accordingly remanded the mater back to the Assessing Officer and directed to re-examine the matter a fresh. Accordingly the Assessing Officer completed the assessment proceedings and total demand was reworked as Rs. 40,36,84,241/- and the net amount payable was determined at Rs. 4,21,31,164/-. After adjusting the TDS amount the tax liability and the penalty stood at Rs. 1,45,23,900....
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....ng of prosecution. One of the functions of the Investigation Wing of the Incometax Department is to take deterrent action against large tax evaders. Prosecution being the most potent weapon in the fight against the tax evasion, it is required that prosecution should be filed at the earliest. The proposition that prosecution can be launched without waiting for assessment to be completed is upheld by the Hon'ble Supreme Court in the case of Jayappan Vs. S.K.Perumal, First ITO 1984 AIR 1693." The sanctioning authority further stated that the petitioner has willfully attempted to evade tax by not filing true and correct return of income and thereby not disclosing the correct turnover and the income derived by him. Therefore, the presumption contemplated under Section 278 E of the Income Tax Act comes into play and Court is to presume that the assessee has not admitted the true and correct income and thereby the assessee has committed an offence under Section 276C(1) of the Income Tax Act, 1961. Therefore, the Principal Director of Income Tax considered the submission made by the petitioner and stated the reasons in detail manner and accorded sanction to prosecute the petitioner. ....
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....al ground and not on merit, prosecution may continue; and (vii) In case of exoneration, however, on merits where allegation is found to be not sustainable at all and person held innocent, criminal prosecution on the same set of facts and circumstances can not be allowed to continue underlying principle being the higher standard of proof in criminal cases. In our opinion, therefore, the yardstick would be to judge as to whether allegation in the adjudication proceeding as well as proceeding for prosecution is identical and the exoneration of the person concerned in the adjudication proceeding is on merits. In case it is found on merit that there is no contravention of the provisions of the Act in the adjudication proceeding, the trial of the person concerned shall be in abuse of the process of the court. " She also relied upon the judgment of this Court passed in Crl.O.P.No.28469 of 2018 batch cases dated 18.03.2019 in the case of J.Dinakaran Vs. Deputy Director of Income Tax, which held as follows:- "........The petitioner willfully made false statement of return of income and willfully under reported the income earned. Therefore, the entire proceedings cannot be quashed........