MEENA GOEL V. THE COMMISSIONER OF INCOME TAX and ANOTHER

WPMS/2010/2008

AI Insights

The case revolves around the challenge to an order by the Commissioner of Income Tax, Dehradun, which declined to credit the income tax deposited by the petitioner, Smt Meena Goel, under the Voluntary Disclosure Income Scheme (VDIS) for the assessment year 1994-1995. The refusal was based on the grounds that an investigation was pending with the Central Bureau of Investigation (CBI) concerning offenses under the Indian Penal Code and the Prevention of Corruption Act, 1988. The core legal issue was whether the petitioner was barred from seeking the benefits of VDIS due to the ongoing investigation. The court found that since no prosecution was pending against the petitioner at the time she sought VDIS, she was entitled to its benefits, leading to the quashing of the CIT's order.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 693445 (HC-UTTARAKHAND)
• Appeal Type: Others
• Pronouncement Date: 23-12-2010
• Assessment Year: misc
• Other Referred Cases: Income Tax Appeal No. 54 of 2003
• Laws Referred To: Income Tax Act, 1961, Finance Act, 1997, Prevention of Corruption Act, 1988, Narcotic Drugs and Psychotropic Substances Act, 1985, Terrorists and Disruptive Activities Act, 1987
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ARVIND VASHISTH
• Assessee Lawyers: SIDDHARTHA SINGH
• Keywords: CBI; Central Bureau of Investigation; Income Tax; Investigation; Prosecution; VDIS; Voluntary Disclosure Income Scheme
• Section: 264; 78

Judgement Text

"1 In The High Court of Uttarakhand At Nainital Writ Petition No. 2010 of 2008 Smt Meena Goel W/o Pawan Goel R/o Niranjani Akhara Haridwar, Dist Haridwar …..........Petitioner Versus 1. The commissioner of Income Tax, Dehradun 2. The Income Tax Officer Haridwar 3. The Addl Commissioner of Income Tax Haridwar Range, Haridwar …..................Respondents Shri Siddhartha SinghAdvocate, present for petitioner Shri, Arvind Vashisth Advocate, present for the respondents Coram: Hon’ble Prafulla C. Pant, J. Hon'ble Sudhanshu Dhulia, J. Oral: Hon'ble Prafulla C.Pant, J. 2 By means of this writ petition, moved under Article 226 of Constitution of India, the petitioner has challenged order dated 27.02.2002, passed by Commissioner of Income Tax Dehradun (for short CIT) under section 264 of Income Tax Act, 1961, (for short ITA) declining to credit the income tax deposited by the petitioner (assessee) under Voluntary Disclosure Income Scheme (VDIS) for the assessment year 1994- 1995. (2) Heard learned counsel for the parties. (3) Brief facts of the case, are that VDIS was sought by the petitioner Meena Goel for the assessment year 1994-1995 under Finance Act, 1997, and she made certain disclosers which were accepted, and income tax was accordingly paid by the assessee. However, since investigation was pending with Central Beauro of Investigation (CBI) in respect of offences provisions of I.P.C., and Prevention of Corruption Act, 1988, the income tax authorities declined to credit the income tax deposited by the assessee consequent to the acceptance of VDIS. (4) Short question raised before this court is that whether the petitioner was barred from seeking benefit of VDIS in view of the provisions contained in clause 3 (b) of section 78 of Finance Act, 1997, or not. Said provision of the Finance Act, 1997, provides that VDIS would not apply to the persons in relating to prosecution of an offence under chapter IX or chapter XVII of I.P.C., Narcotic Drugs and Psychotropic Substances Act, 1985, the Terrorists and Disputive Activities Act, 1987 and the Prevention of Corruption Act, 1988. The case of the revenue is that since investigation was pending against the petitioner as such she was not entitled to the benefit of VDIS. On the other hand the petitioner has pleaded that since no prosecution ever took place against the petitioner , as such, clause (b) of section 78 of the Finance Act 1997, does not apply to her. (5) In Income Tax Appeal No. 54 of 2003 similar question of law was raised which was answered by us by a separate judgment after hearing the parties upholding the order of Income Tax Appellate Tribunal that clause (b) of section 78 does not bar the present assessee from seeking VDIS as no prosecution was pending against her. We have taken note of the fact that neither any charge sheet was pending against the petitioner, nor was filed consequent to the investigation pending against her, nor any summons were issued by the court, as such, it can not be said that she was barred by clause (b) of section 78 of the aforesaid Act. Had 4 there been a prosecution pending on the date assessee sought VDIS, or had there been any prosecution initiated consequent to the investigation pending on the date she sought VDIS, it could have been said that she was not entitled to seek VDIS, but in the present case she was neither facing prosecution nor prosecuted, rather final report was said to have been submitted by CBI closing the investigation, we find that CIT Dehradun has erred in law and declining to credit the income tax deposited by the assessee after her discloser was accepted under VDIS. (6) Accordingly, the writ petition is allowed to the extend that the impugned order dated 27.02.2002, passed by CIT Dehradun is liable to be quashed. The same is quashed, with the direction that the authority concerned (CIT Dehradun) may pass fresh order in accordance with law, in the light of the observations made above. (Sudhanshu Dhulia, J.) (Prafulla C. Pant, J.) 23.12.2010 Nahid "