TaxTMI 
TaxTMI 
2023 (10) TMI 274
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....to different parties in the Assessment Years 2015-2016 and 2016-2017 at the rates below the value of the Sub- Registrar Office. It is further contended that the petitioners herein have sold the properties and realized the money and did not file income tax returns and did not pay any tax for the said assessment years and the summons were issued to the petitioners to show cause as to why prosecution should not be initiated against them as the tax was willfully avoided by the petitioners for the said assessment years. 4. Basing on the said complaint, the Special Court of Economic Offences, Hyderabad registered and numbered the case as C.C.No.263 of 2017 for prosecution against the petitioners for the offences punishable under Sections 276C(1) and 278B of the Act, 1961. 5. As already stated supra, challenging the said proceedings in C.C.No.263 of 2017, the petitioners have filed this quash petition contending that the initiation of the prosecution against the petitioner is illegal and void ab-initio. 6. It is the specific contention of the petitioners that the authorization under Section 279(1) of the Act was issued by the Principal Director of Income Tax (Inv.), Hyderabad, to the D....
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....-2017, the petitioner sold Ac.39.11 guntas of land at Budvel Village, Rajendranagar Mandal, Ranga Reddy District, for a total sale consideration of Rs. 11.24 crores as against the Sub-Registrar Office value of Rs. 92.61 crores but has not disclosed the income tax from the sale of property for taxation either under the head 'Income from Capital Gains' or 'Income from Business'. Similarly, there were cash deposits in the bank accounts of the assessee to the tune of Rs. 47.70 lakhs, which remained unexplained and in the absence of books of account maintained by the assessee company is deemed to be the income of the company. Further, the petitioner-company has not filed Income Tax Return for the assessing year 2015-2016 within the due date prescribed under the Act, i.e., on or before 30.09.2015. 8. Heard Sri S. Ravi, learned Senior Counsel for the petitioners and Sri A. Ramakrishna Reddy, learned Standing Counsel for the respondent. 9. It is the specific contention of the learned Senior Counsel that there shall be sanction under Section 279(1) of the Act. As per the said sanction, dated 30.03.2017, the Principal Director of Income Tax (Inv.), Hyderabad issued sanction under Section 2....
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....ion by the Principal Director of Income Tax. 13. It is also contended by the learned Standing Counsel that in the present case, initially, the sanction was issued to the Deputy Director of Income Tax for launching prosecution proceedings against the petitioner company. Meanwhile, during the interregnum period of processing the case for prosecution, there was a change in the incumbency due to Annual General Transfers of the Officers and in his place an Assistant Director of Income Tax was posted, who had filed the prosecution complaint in the Court of law. 14. It is the specific contention of the learned Standing Counsel that the duties performed by the Deputy Director of Income Tax as well as Assistant Director of Income Tax are one and the same, excepting that a senior officer will be termed as Deputy Director of Income Tax and a junior officer as Assistant Director of Income Tax. Therefore, there is no error or irregularity in the present case for launching prosecution against the petitioner-company by the Assistant Director of Income Tax. 15. The learned Senior Counsel for the petitioners in order to support his contentions, relied on the following judgments. 15.1 The judgme....
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....3 forthwith on the petitioner furnishing an undertaking that the subject goods will not be parted with or alienated for a period of six months within which period the respondent can take any action, if so warranted, in accordance with law for recovery of any tax legally liable from the petitioner. I am constrained to conclude this order with a note of caution to the authorities under the Act to the effect that any action taken by the authorities must have the sanction of law and supported by provisions of law. Otherwise, the same would amount to illegal action and harassment of unwary public for extraneous reasons, which is not authorised under any law and cannot be the intention of the law makers. With this observation the writ petitions are allowed." As per the above said proposition, the authority which has initiated the prosecution must have sanction of law. Otherwise, it amounts to illegal action. 15.3 The learned Senior Counsel for the petitioner further relied on the judgment of the Hon'ble Apex Court in the case of Sate of Uttar Pradesh Vs. Singhara Singh and others [(1964) 4 SCR 485] and brought to the notice of this Court paragraph No.8, which reads as under: "8. T....
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....and falls for consideration. In Pukhraj's case, (supra) this court observed that whether sanction is necessary or not may depend from stage to stage. In Matajog's case the Constitution Bench had further observed that the necessity for sanction may reveal itself in the course of the progress of the case and it would be open to the accused to place the material on record during the course of trial for showing what his duty was and also the acts complained of were so inter related with his official duty so as to attract the protection afforded by Section 197 of the Code of Criminal Procedure. This being the position it would be unreasonable to hold that accused even though might have really acted in discharge of his official duty for which the complaints have been lodged yet he will have to wait till the stage under sub section (4) Section 246 of the Code reaches or at least till he will be able to bring in relevant materials while cross examining the prosecution witnesses. On the other had it would be logical to hold that the matter being one dealing with the jurisdiction of the court to take cognisance, the accused would be entitled to produce the relevant and material documents whi....