LALITA DEVI AGARWAL V. INCOME TAX DEPARTMENT

CRLMP/3977/2022

AI Insights

The case involves Ashish Agarwal, who was accused by the Income Tax Department of failing to file his income tax return on time following a search and seizure operation at his premises. The department issued a notice under Section 153-A of the Income Tax Act, 1961, which Agarwal responded to by requesting necessary documents to file his return. Despite the delay, the return was eventually filed. The Income Tax Department then sought prosecution under Section 276-CC for the delay. The trial court, however, misinterpreted the complaint and took cognizance of the case as one of tax evasion. The High Court found this interpretation to be erroneous and quashed the cognizance order, allowing Agarwal to challenge the prosecution sanction separately.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 756646 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 04-08-2022
• Assessment Year: misc
• Laws Referred To: Income-Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K K BISSA
• Assessee Lawyers: MAHAVEER BISHNOI; JAYRAM SARAN
• Keywords: Cognizance of offence; Delay in filing return; Income Tax Return; Prosecution sanction; Search and seizure
• Section: 153(A); 279(1); 276 CC

Judgement Text

"(1 of 9) [CRLMP-3106/2022] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Criminal Misc(Pet.) No. 3106/2022 Ashish Agarwal S/o Shri Hariram Agarwal, Aged About 36 years, R/o Bachhawaton Ka Mohalla, Bikaner (Raj.) ----Petitioner Versus Income Tax Department, through Assistant Income Commissioner, Central Circle, Income Tax Department, Bikaner. ----Respondents For Petitioner(s) : Mr. Mahaveer Bishnoi with Mr. Jayram Saran For Respondent(s) : Mr. K.K. Bissa JUSTICE DINESH MEHTA Order 04/08/2022 1. Instant petition and those mentioned in the Schedule, involve identical issue of law and facts, hence all of them are being decided by this common order. The facts of S.B. Criminal Misc. Petition No.3106/2022 (Ashosh Agarwal Vs. Income Tax Department) are being taken into consideration for the purpose of disposal of these cases. 2. The petitioner is an assessee under the Income-Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’) and is having Permanent Account No.AGAPA5596A. 3. A search and seizure was conducted at petitioner’s business and residential premises on 24.02.2016, in furtherance whereof, a notice under Section 153-A of the Act of 1961, requiring him to file return of income-tax within 30 days came to be issued. (2 of 9) [CRLMP-3106/2022] 4. It is the case of the petitioner that on receipt of the notice, the petitioner had sent a letter dated 28.07.2016 and requested the Dy. Commissioner, Income-tax to provide copies of the statements recorded during the course of search and other relevant documents so that a return as demanded under Section 153-A of the Act of 1961 can be filed. 5. Later on, the petitioner filed the return of income on 04.07.2016. 6. The Commissioner, Income-tax (Central) thereafter issued a show cause notice dated 28.02.2017 under Section 279(1) of the Act of 1961 and asked him why not prosecution under Section 276-CC of the Act of 1961, for failure to file return of Income-tax in time be launched against him. 7. In response to the show cause notice aforesaid, the petitioner filed a reply and explained the delay of 72 days inter alia contending that there was no intentional delay in filing the return and the petitioner was prevented by sufficient cause, as the requisite documents were not supplied to him despite being demanded. It was also stated that the demand of tax is meagre. And hence, the prosecution sanction be not granted. 8. The petitioner did not hear anything until he came to receive summons issued by the Additional Chief Metropolitan Magistrate, Jodhpur Metro (hereinafter referred to as ‘the trial Court’) requiring the petitioner to appear on 28.05.2022. 9. On inquiry being made, the petitioner came to know that the trial Court had taken cognizance of offence under Section 276-CC of the Act of 1961 prima facie finding to be a case made out against the petitioner. (3 of 9) [CRLMP-3106/2022] 10. The petitioner has assailed the aforesaid order dated 21.02.2018, whereby cognizance has been taken against him so also the proceedings pending before the trial Court. 11. Learned counsel for the petitioner highlighted the fact that the petitioner had furnished his return of income for the Assessment Year 2013-14 and it was only pursuant to search and seizure, which was conducted at petitioner’s premises on 24.02.2016, the Income-Tax Department issued a notice under Section 153-A of the Act of 1961 to the petitioner and asked him to furnish return (revised return). 12. Mr. Bishnoi, learned counsel, invited Court’s attention towards the complaint submitted by the Income-Tax Department and pointed out that the department had prayed for petitioner’s prosecution for late filing of return, as provided under Section 276-CC(ii) of the Act of 1961, whereas the trial Court has treated it to be a case of evasion of tax and has taken cognizance as such. He argued that the order taking cognizance is mechanical and without application of mind to the facts of the case. 13. He navigated the Court through the short order by which cognizance has been taken and submitted that the trial Court has found the case to be a case of evasion of income-tax, whereas the facts pleaded were otherwise. While submitting that the return of income-tax was ultimately filed with a small delay of 72 days, learned counsel emphasized that no additional demand was raised against the petitioner let-alone penalty, and, therefore, it cannot be said that the petitioner had, in any manner, evaded income- tax. 14. He argued that since the departmental authorities themselves have found that no income-tax was evaded by the (4 of 9) [CRLMP-3106/2022] petitioner, neither the learned Commissioner of Income-tax should have accorded prosecution sanction nor should the trial Court have taken cognizance against the petitioner. 15. Learned counsel submitted that immediately on receipt of the notice under Section 153-A of the Act of 1961, the petitioner had requested the Dy. Commissioner, Central Circle, Bikaner to provide copies of the statements recorded during the search proceedings so that the return could be filed and until the same were provided, the return could not be filed. The petitioner was not guilty of filing the return belatedly for which, he can be prosecuted, vehemently contended Mr. Bishnoi. 16. Though copy of the order granting prosecution has not been placed on record, learned counsel argued that the Principal Commissioner of Income-tax has proceeded arbitrarily and has adopted a rather strict approach and granted permission to prosecute. He prayed that prosecution sanction be quashed. 17. Mr. Bissa, learned counsel appearing for the Department, at the outset raised a preliminary objection that against the impugned order dated 21.02.2018, whereby the trial Court has taken cognizance, the petitioner is required to file a revision petition as provided under Section 397 of the Code of Criminal Procedure and invoking inherent jurisdiction of this Court under Section 482 of the Code directly is not proper. 18. While emphasizing that the cognizance has been taken under Section 276-CC of the Act of 1961, which includes evasion of income-tax so also delay in filing return, learned Standing Counsel submitted that the grounds which the petitioner has canvassed before this Court, can very well be raised before the trial Court at (5 of 9) [CRLMP-3106/2022] the time of framing of the charges. He argued that no interference is warranted at this stage. 19. Mr. Bissa, learned counsel further argued that admittedly there is a delay of 72 days in filing the return. While contending that the provisions of Sections 279(1) and 276CC of the Act of 1961 are mandatory, he argued that the prosecution in question has been rightly launched against the petitioner. 20. He argued that unless the order of the Principal Commissioner, Income-tax, granting prosecution is challenged, no fault can be found in the proceedings being undertaken by the trial Court including the order by which the cognizance has been taken. 21. Heard learned counsel for the parties. 22. A simple look at the complaint filed by the respondent- Income-tax Department (Annex.2) leaves no room for ambiguity that the Department wanted petitioner’s prosecution under Section 276-CC(ii) of the Act of 1961, as is evident from the caption of the application. If the application is read, it is apparent that the Income-tax Department had desired petitioner’s prosecution for 72 days’ delay in filing the return. There is not even a whisper of evasion of income-tax, whereas the learned trial Court, claiming to have perused the record, has observed that the accused (petitioner herein) has not filed his return of income for 2013-14 and has evaded the income-tax. 23. In the opinion of this Court, the order of the cognizance shows clear misreading of the complaint and the same suffers from manifest error of law, for which it is liable to be quashed and set aside. (6 of 9) [CRLMP-3106/2022] 24. Mr. Bissa may be correct in saying that the petitioner ought to have preferred a revision petition under Section 397 of the Code but then, considering that the petitioner and his group has filed about 80 petitions of identical nature, relegating the petitioners to file revision petition(s), that too when the order impugned suffers from palpable error of law and facts, would lead to multiplicity of litigation and passing of dockets from this Court to the Revisional Court. 25. The preliminary objection raised by the Income-Tax Department is thus, over-ruled. 26. In view of the aforesaid discrepancy and considering that not only the notice issued to the petitioner before granting prosecution sanction, even the complaint filed by the Department alleges delay in filing return, while eliciting prosecution under Section 276-CC (ii) of the Act of 1961, this Court is of the view that the cognizance, which has been taken for evasion of tax is ex-facie erroneous and deserves to be quashed and set aside. 27. The order granting prosecution sanction has neither been challenged in the present petition nor can the same be permitted to be questioned before this Court in its jurisdiction under Section 482 of the Code. Because, the act of granting prosecution sanction is an administrative or statutory exercise of powers. 28. In view of the discussion foregoing, instant petition so also those enumerated in the appended scheduled are allowed. The cognizance order in each of the case is hereby quashed and set aside. 29. The petitioners shall appear before the trial Court on 03.09.2022 either personally or through counsel. (7 of 9) [CRLMP-3106/2022] 30. The trial Court shall consider the submissions of the Income- tax Department/complainant so also present petitioners (accused) and then, take into account and then pass a speaking order, against which remedies of both the parties shall stand reserved. 31. The petitioners shall be free to challenge order granting prosecution sanction in accordance with law, if so advised. 32. The stay applications also stand disposed of accordingly. (DINESH MEHTA),J 321-402-skm/- (8 of 9) [CRLMP-3106/2022] Schedule S. No. CRMLP No. Petitioner(s) Respondent(s) 1 3885/2022 Ashish Agarwal Income Tax Deptt. 2 3886/2022 Ashish Agarwal Income Tax Deptt. 3 3887/2022 Ashish Agarwal Income Tax Deptt. 4 3888/2022 Ashish Agarwal Income Tax Deptt. 5 3890/2022 Ashish Agarwal Income Tax Deptt. 6 3911/2022 M/s Bhikharam Chandmal Bhujiawala Pvt. Ltd. & Ors. Income Tax Deptt. 7 3912/2022 M/s Bhikharam Chandmal Bhujiawala Pvt. Ltd. & Ors. Income Tax Deptt. 8 3918/2022 Anand Agarwal Income Tax Deptt. 9 3919/2022 Anand Agarwal Income Tax Deptt. 10 3920/2022 Anand Agarwal Income Tax Deptt. 11 3921/2022 Anand Agarwal Income Tax Deptt. 12 3922/2022 Anand Agarwal Income Tax Deptt. 13 3923/2022 Anand Agarwal Income Tax Deptt. 14 3924/2022 M/s Bhikharam Chandmal Bhujiawala Pvt. Ltd. & Ors. Income Tax Deptt. 15 3925/2022 M/s Bhikharam Chandmal Bhujiawala Pvt. Ltd. & Ors. Income Tax Deptt. 16 3926/2022 M/s Bhikharam Chandmal Bhujiawala Pvt. Ltd. & Ors. Income Tax Deptt. 17 3927/2022 M/s Bhikharam Chandmal Bhujiawala Pvt. Ltd. & Ors. Income Tax Deptt. 18 3928/2022 Kishore Kumar Agarwal Income Tax Deptt. 19 3929/2022 Mohini Food Product Pvt. Ltd. & Ors. Income Tax Deptt. 20 3930/2022 Mohini Food Product Pvt. Ltd. & Ors. Income Tax Deptt. 21 3931/2022 Mohini Food Product Pvt. Ltd. & Ors. Income Tax Deptt. 22 3932/2022 Mohini Food Product Pvt. Ltd. & Ors. Income Tax Deptt. 23 3933/2022 Kishore Kumar Agarwal Income Tax Deptt. 24 3934/2022 Kishore Kumar Agarwal Income Tax Deptt. 25 3935/2022 Mohini Food Product Pvt. Ltd. & Ors. Income Tax Deptt. 26 3936/2022 Kishore Kumar Agarwal Income Tax Deptt. 27 3937/2022 Mohini Food Product Pvt. Ltd. & Ors. Income Tax Deptt. 28 3938/2022 Kishore Kumar Agarwal Income Tax Deptt. 29 3939/2022 Kishore Kumar Agarwal Income Tax Deptt. 30 3940/2022 M/s Sunshine Food Products & Ors. Income Tax Deptt. 31 3941/2022 Smt. Ratan Devi Agarwal Income Tax Deptt. 32 3942/2022 M/s Sunshine Food Products & Ors. Income Tax Deptt. 33 3943/2022 Smt. Ratan Devi Agarwal Income Tax Deptt. 34 3945/2022 Smt. Ratan Devi Agarwal Income Tax Deptt. 35 3946/2022 M/s Sunshine Food Products & Ors. Income Tax Deptt. 36 3947/2022 Smt. Ratan Devi Agarwal Income Tax Deptt. 37 3948/2022 Smt. Ratan Devi Agarwal Income Tax Deptt. 38 3949/2022 M/s Sunshine Food Products & Ors. Income Tax Deptt. 39 3950/2022 Smt. Ratan Devi Agarwal Income Tax Deptt. 40 3951/2022 M/s Sunshine Food Products & Ors. Income Tax Deptt. 41 3952/2022 Jai Prakash Agarwal Income Tax Deptt. 42 3953/2022 Jai Prakash Agarwal Income Tax Deptt. 43 3954/2022 M/s Sunshine Food Products & Ors. Income Tax Deptt. 44 3955/2022 Hari Ram Agarwal Income Tax Deptt. 45 3956/2022 Hari Ram Agarwal Income Tax Deptt. 46 3957/2022 Hari Ram Agarwal Income Tax Deptt. 47 3958/2022 Hari Ram Agarwal Income Tax Deptt. 48 3959/2022 Jai Prakash Agarwal Income Tax Deptt. 49 3961/2022 Hari Ram Agarwal Income Tax Deptt. (9 of 9) [CRLMP-3106/2022] 50 3962/2022 Jai Prakash Agarwal Income Tax Deptt. 51 3963/2022 Hari Ram Agarwal Income Tax Deptt. 52 3964/2022 Jai Prakash Agarwal Income Tax Deptt. 53 3966/2022 Navratan Agarwal Income Tax Deptt. 54 3967/2022 Jai Prakash Agarwal Income Tax Deptt. 55 3968/2022 Navratan Agarwal Income Tax Deptt. 56 3969/2022 Navratan Agarwal Income Tax Deptt. 57 3970/2022 Smt. Lalita Devi Agarwal Income Tax Deptt. 58 3971/2022 Navratan Agarwal Income Tax Deptt. 59 3972/2022 Smt. Lalita Devi Agarwal Income Tax Deptt. 60 3973/2022 Smt. Lalita Devi Agarwal Income Tax Deptt. 61 3974/2022 Navratan Agarwal Income Tax Deptt. 62 3975/2022 Smt. Lalita Devi Agarwal Income Tax Deptt. 63 3976/2022 Smt. Lalita Devi Agarwal Income Tax Deptt. 64 3977/2022 Smt. Lalita Devi Agarwal Income Tax Deptt. 65 3978/2022 M/s Bhikharam Chandmal Marketing Pvt. Ltd. Income Tax Deptt. 66 3979/2022 M/s Bhikharam Chandmal Marketing Pvt. Ltd. Income Tax Deptt. 67 3980/2022 M/s Bhikharam Chandmal Marketing Pvt. Ltd. Income Tax Deptt. 68 3981/2022 M/s Bhikharam Chandmal Marketing Pvt. Ltd. Income Tax Deptt. 69 3982/2022 Smt. Saroj Devi Agarwal Income Tax Deptt. 70 3983/2022 M/s Bhikharam Chandmal Marketing Pvt. Ltd. Income Tax Deptt. 71 3984/2022 M/s Bhikharam Chandmal Marketing Pvt. Ltd. Income Tax Deptt. 72 3985/2022 Smt. Saroj Devi Agarwal Income Tax Deptt. 73 3986/2022 Smt. Saroj Devi Agarwal Income Tax Deptt. 74 3987/2022 Smt. Saroj Devi Agarwal Income Tax Deptt. 75 3988/2022 M/s Navhari Food Products Pvt. Ltd. & Ors. Income Tax Deptt. 76 3989/2022 Smt. Saroj Devi Agarwal Income Tax Deptt. 77 3990/2022 M/s Navhari Food Prodcuts Pvt. Ltd. & Ors. Income Tax Deptt. 78 3991/2022 M/s Navhari Food Prodcuts Pvt. Ltd. & Ors. Income Tax Deptt. 79 3992/2022 M/s Navhari Food Prodcuts Pvt. Ltd. & Ors. Income Tax Deptt. 80 3993/2022 M/s Navhari Food Prodcuts Pvt. Ltd. & Ors. Income Tax Deptt. 81 3994/2022 M/s Navhari Food Prodcuts Pvt. Ltd. & Ors. Income Tax Deptt. "