TaxTMI 
TaxTMI 
2023 (7) TMI 1617
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....ar 2017-18 in connection with impugned prosecution case related to alleged offence under Sections 276C(1), 277, 277A of the Income Tax Act, 1961 as well as impugned sanction order for prosecution, dated 12th June, 2023 under Section 279(1) of the Income Tax Act, 1961 passed by the Principal Commissioner of Income Tax, Central-1, Kolkata. The main grounds of challenge in this writ petition against the aforesaid impugned show cause notice dated 11th May, 2023 and the impugned sanction order dated 12th June, 2023 under Section 279(1) of the Income Tax Act are as hereunder: 1) that the aforesaid sanctioned order is without jurisdiction since the same is contrary to relevant provisions of circular being Circular No. 24/2019 dated 9th Se....
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....ry to the aforesaid circulars. Mr. Khaitan submits that the amount of income alleged to have been evaded is Rs. 27,31,215/- which has not yet been established, the tax effect of the alleged evaded income will be much below Rs. 25 lakh. If the aforesaid two circulars are read with Section 279 of the Income Tax Act, 1961, sanction authority for criminal prosecution against the alleged offence will be two collegium members of Principal Chief CIT if the tax effect of the evaded amount of tax is Rs. 25 lakh or below Rs. 25 lakh and in this case admittedly the tax effect is below Rs. 25 lakh and no proceeding is pending. He strenuously argues that the allegations in impugned show cause notice is a mere allegation not supported by any material or ....
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....tion and such attitude of the authority shows that issuance of the impugned show cause notice is with a predetermined mind a mere idle formality in the name of observing principle of natural justice. Particularly paragraphs 4, 5, 6, 7 and 8 of the aforesaid letter of the petitioner dated 8th June, 2023, are relevant which are quoted hereunder: "4. Given this context, I hereby request that you furnish the basis, relied upon material, and documents used to determine the amount. Furthermore, please provide me with any evidence in your possession that supports your claim of income suppression. Without access to the basis of calculation, the methodology employed to arrive at the undisclosed amount, and the supporting material or evidenc....
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....repare and submit my submissions in response to your show cause notice." 3. Mr. Mitra, learned advocate appearing for the respondent Income Tax Authority concerned submits that on the face of it the approval in the instant case by the Principal CIT and not by two collegiums members of Principal Chief CIT is contrary to the provisions of the aforesaid two circulars of CBDT according to which in the instant case sanction should have been granted by the collegium of two Chief CIT and he could also not deny the allegation of the petitioner that there was a patent violation of principles of natural justice by not considering the petitioner's request made by letter dated 8th June, 2023 by which petitioner had asked the respondents for some mor....
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.... the CBDT: "Circular No. 24/2019 dated 09.09.2019 2. Prosecution is a criminal proceeding. Therefore, based upon evidence gathered, offence and crime as defined in the relevant provision of the Act, the offence has to be proved beyond reasonable doubt. To ensure that only deserving cases get prosecuted the Central Board of Direct Taxes in exercise of powers under Section 119 of the Act lays down the following criteria for launching prosecution in respect of the following categories of offences. i. ...................................... ii. ..................................... iii. Offences u/s 276C(1): Wilful attempt to evade tax, etc. Causes where the amount sought to be evaded or tax on und....
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....ordinarily after the confirmation of the order imposing penalty by the Income Tax Appellate Tribunal. Further, prosecution in other cases, including cases covered u/s 132/132A/133A, may be launched at any stage of the proceedings before an Income-tax Authority, with the previous approval of the Collegium of two CCIT/DGIT rank officers as mentioned in para 3 of the Circular." 6. Considering the facts and circumstances of the case as appears from record and submissions of the parties and in view of involvement of interpretation of Sections 276C(1), 277, 277A & 279(1) of the Income Tax Act, 1961, and the aforesaid circulars of the Board dated 9th September, 2019 and 23rd January, 2020 and in view of challenge to the jurisdiction of the sanc....