IN THE COURT OF SH. NARINDER KUMAR:SPECIAL JUDGE-2 NDPS ACT: (CENTRAL DISTRICT)

TIS HAZARI COURT : DELHI

Decided on: 14.09.2017

CR No. :407 of 01.09.2017

Sh. Raj Kumar Kedia  …..Revisionist

Versus

Income Tax Office,

Through Sh. Neeraj Kumar, DDIT (Inv.), Unit 3 (3), Income Tax Department,

Jhandewalan, New Delhi …..Respondent

JUDGMENT

By way of present petition, petitioner – accused in complaint case no. 516645/16 has challenged order dated 28.06.2017 passed by learned Additional Chief Metropolitan Magistrate, Special Case, Central District, Delhi whereby charge for offences under Section 276-C(1) and 277A of the Income Tax Act (hereinafter referred to as “the Act”) was ordered to be framed against him, prima facie case having been made out against him for these two offences in view of the material available on record.

2. Learned counsel for petitioner referred to provisions of Section 279(1) of the Act and submitted that prosecution for the aforesaid two offences can be launched only with the sanction of Principal Commissioner or Commissioner, or Commissioner (Appeals) or the appropriate authority. Reference has also been made to proviso to this Section, which postulates that the Principal Chief Commissioner or Chief Commissioner or, as the case may be, Principal Director General or Director General may issue such instructions or directions to the aforesaid income - tax authorities as he may deem fit for institution of proceedings under this sub-section.

The argument is that herein sanction for prosecution having been granted by Principal Director of Income Tax, same has not been granted by Competent Authority and as such no charge could be framed against the petitioner. In support of his contention, learned counsel has referred to decision in Dr. Nalini Mahajan v. DIT (Inv.) 257 ITR 123 (Delhi).

3. On the other hand, learned counsel for respondent submitted that in this case Principal Director of Income Tax was the competent person to grant sanction for prosecution of the petitioner. As regards decision in Dr. Nalini's case (supra) learned counsel submitted that that was a case where the illegality or legality of search and seizure and interpretation of provisions of Section 132 of the Act were in question and as such the decision is not applicable to the present case, as has been rightly observed by learned Trial Court.

4. Undisputedly, prosecution has been launched on the basis of sanction granted by Principal Director of Income Tax (Investigation). Section 2(16) of the Act defines “Commissioner”, as a person appointed to be Commissioner of Income Tax or Director of Income Tax or Principal Commissioner of Income Tax or Principal Director of Income Tax under Sub-section (1) of Section 117 of the Act. Section 117 empowers the Central Government to appoint such persons  as  it  thinks  fit  to  be  income  tax  authorities. Principal Directors of Income Tax is one of the Income Tax authorities as provided under Section 116(ba) of the Act.

In Dr. Nalini Mahajan's case (supra), point of search and seizure in the premises of the petitioners was subject matter of the writ petitions. Interpretation of Section 132 of the Act was also involved. Interpretation of provisions of Section 279 of the Act was not the subject matter. Therefore, decision in Dr. Nalini Mahajan's case (supra) does not come to the aid of the petitioner, so as to observe at this stage of framing of charge that the prosecution of the petitioner has been launched without sanction by competent authority.

5. Learned counsel for petitioner submitted that an application, filed on behalf of the petitioner for dismissal of the complaint filed by the respondent, was to be considered at the time of arguments on the point of charge, as mentioned in order dated 05.11.2015, but the said application was not taken into consideration at the time of passing of the impugned order and as such impugned order deserves to be set aside.

6. Trial Court record reveals that arguments on the point of charge were advanced before the Trial Court by Mr. Prakash Kumar, learned counsel for the petitioner herein.

Impugned order dated 28.06.2017, does not reveal that attention of learned Trial Court was drawn to the application dated 05.11.2015 by learned counsel for petitioner at the time arguments were advanced on charge.

Learned counsel for petitioner has not been able to point out as to which of the arguments advanced by him before the Learned Trial Court has not been discussed in the impugned order.

7. Learned counsel for the petitioner referred to observations made by learned Trial Court in para 18 of the impugned order which is to the effect that parties can lead evidence explaining the situation on the point of sanction in post charge evidence.

No illegality has been pointed in this observation. It appears that learned Trial Court has so observed considering that grant of sanction can still be proved at a later stage, by the parties during trial, and at this stage, charge has been ordered to be framed only keeping in view that prima facie case for the two offences is made out against the petitioner.

8. Learned counsel for the petitioner has referred to the directions issued by learned Trial Court in para 20 of the judgment thereby calling explanation from the complainant department as to in how many cases, the power to grant sanction were exercised by Principal Director instead of Commissioner of Income Tax. The submission is that in view of these directions learned Trial Court should not have made observations that prima facie case for two offences was made out against the accused – petitioner.

On the other hand, learned counsel for complainant- respondent has pointed out that in terms of these direction simply report was called and filed before the Trial Court on 26.07.2017.

The aforesaid direction in para 20 appears to have been issued by learned Trial Court to know from the department about the exercise of powers for grant of sanction. But from these directions, at this stage, as discussed above, it cannot be said that Principal Director of Income Tax (Investigation) granted sanction for prosecution of the petitioner, without any authority.

9. Learned counsel for the petitioner has referred to ground (J) in the petition that the present petition deserves to be dismissed on the ground of lack of jurisdiction.

Learned counsel for respondent – complainant submitted that procedure followed for assessment under Section 153 of the Act is different from the procedure that is followed for prosecution.

In support of his submission, learned counsel for the respondent has rightly referred to decision in P. Jayappan v. S. K. Perumal, First Income Tax Officer, Tuticorin 1984 AIR 1693.

Section 153 A of the Act provides for assessment in case of search or requisition. The proceedings conducted under Section 153A of the Act by the Assessing Officer are different and do not pertain to the jurisdiction of the investigating unit for the purpose of prosecution.

10. One of the contention raised by learned counsel for the petitioner is that the judgments cited by him, which find mention in para 9 of the impugned order, have not been discussed by learned Trial Court.

11. In the impugned order, learned Metropolitan Magistrate has no where specifically discussed the decisions which finds mention in para 9 of the impugned order, but it is significant to note that during the course of arguments before this Court learned counsel for petitioner has relied only on Dr. Nalini Mahajan's case (supra).

It appears that after having regard to the decision in Dr. Nalini Mahajan's case (supra), learned Trial Court opted not to discuss the decision in six other cases which find mention in para no. 9 of the order.

12. In view of the above discussion and having regard to the facts and circumstances of the case, Court does not find any illegality or irregularity in the impugned order. Accordingly, revision petition is hereby dismissed.