The Tax Publishers2020 TaxPub(DT) 4717 (Mad-HC) : (2021) 277 TAXMAN 0549

INCOME TAX ACT, 1961

Section 276C

Non-disclosure of share transaction in income tax return suppressing the fact was concealment of income with a view to evade payment was sufficient to prosecute petitioner and finalization of assessment was not a pre-requisite.

Prosecution - Offence under section 276C - Cognization of offence - Concealment of income with a view to evade tax

Petitioner had entered into 165 share transactions to the tune of Rs. 155.20 crores which was not disclosed in the return of income filed for the assessment year 2008-09. 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. Assessment order had been challenged by the petitioner before the Income Tax Appellate Authority and by an Order dated 28-8-2018, the said assessment order had been set aside. It was the contention of revenue that complaint was off shoot of investigation and was not on the basis of assessment order. Moreover, the assessment order was not set aside on merits but is remanded back by the Tribunal only on the technical aspect to decide the issue afresh. Assessment order for the assessment year 2008-09 was the basis for the lodgemnt of complaint, the order of set aside ought to have been disclosed before the authority concerned before granting sanction to prosecute the petitioner herein. It was categorically established that there was a concealment of income with a view to evade the payment of taxes. Held: Prosecution proceedings are separate and distinct from assessment/reassessment proceedings. There is no requirement in the Act that assessment proceedings should be completed before launching of prosecution. One of the functions of the Investigation Wing of the Income Tax Department is to take deterrent action against large tax evaders. It was established that there was a concealment of income with a view to evade the payment of taxes. Therefore, the order of assessment was nothing to do with the present complaint and it was simultaneous proceeding of the IT Department as share transactions were admittedly not disclosed by the assessee, viz., the petitioner herein. There is no requirement under the Act that the assessment proceedings should be completed before lunching prosecution. Assessee had not admitted the true and correct income and thereby the assessee had committed an offence under section 276C(1).

Relied:CRMC No. 205 of 2015, dated 28-9-2016 : 2018 TaxPub(DT) 6367 (J & K-HC) : 2011 (3) SCC 437, Radheshyam Kejriwal v. State of West Bengal & Anr., Crl. O.P. No. 28469 of 2018 and Batch cases, dated 18-3-2019 in the case of J.Dinakaran v. Dy. Director of IT

REFERRED : Radheshyam Kejriwal v. State of West Bengal & Anr. (2011) 3 SCC 437, (1992) 195 ITR 137 (Mad-HC) : 1992 TaxPub(DT) 0568 (Mad-HC), G.S.R. Krishnamurthi v. M. Govindaswamy 1984 AIR SC 1693, P. Jayappan v. S.K. Perumal, ITO, Cr.MC. No. 205 of 2015, dated 28-9-2018 : 2018 TaxPub(DT) 6367 (J&K-HC), Arun Arya v. ITO, Crl. O.P. No. 28469 of 2018 batch dated 18-3-2019 and J. Dinakaran v. Dy. Director of IT

FAVOUR : Against the petitioner/assessee.

A.Y. : 2008-09



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