Initiation Of Prosecution Not Dependent On Completion Of Assessment If Conditions U/S 51 Of Black Money Act Are Fulfilled: Delhi HC

The Delhi High Court observed that the initiation of the prosecution is not dependent on the completion of assessment, if the conditions as required under Section 51 of the Black Money (Undisclosed Foreign Income and Assets and Imposition of Tax) Act, 2015 are fulfilled.

The Court observed thus in a Petition seeking quashing of a Criminal Complaint pending before the Tis Hazari Court and the Summoning Order.

A Single Bench of Justice Dinesh Kumar Sharma held, “The bare perusal of Section 48 of the Black Money Act makes it clear that the offences and prosecution which falls in Chapter V of the Black Money Act are independent of any order made under this Act. It is relevant to note that the assessment under the Black Money Act is being made under Section 10, which falls in Chapter III of the Act. Therefore, this submission of the petitioner does not hold any force in the eyes of the law. The initiation of the prosecution is not dependent on the completion of assessment, if the conditions as required under Section 51 Black Money Act are fulfilled.”

Senior Advocate Dayan Krishnan appeared for the Petitioner while Senior Standing Counsel (SSC) Zoheb Hossain appeared for the Respondent.

Factual Background -

It was alleged that a search and seizure operation was conducted on the assessee’s premises in 2016 and during the same, incriminating documentary evidence and information were discovered, establishing that the Appellant/accused held the undisclosed bank accounts and properties. It was alleged that as per provisions of the Income Tax Act, 1961 (ITA) along with the return of income from the assessment year 2012-13 the accused failed to disclose the same. The complainant alleged that information was received through Foreign Tax and Tax Research regarding undisclosed foreign bank accounts, foreign properties, etc.

Statements recorded under oath established that the accused was preparing to alienate his foreign assets and offshore entities by backdating documents to evade taxes under the Black Money Act. The investigation revealed that the accused held foreign assets in the form of foreign bank accounts, immovable properties, and interests in foreign entities. Thereafter, Notices were issued to the accused and then the Tis Hazari Court summoned him. Being aggrieved by the Summoning Order, he was before the High Court.

The High Court after hearing the arguments from both sides, noted, “Section 51 of Black Money Act would come into play if even before filing of a return of income, the person is found to have done any of the acts as prescribed in Section 51(3) of Black Money Act, 2015. Apparently the prosecution under this provision cannot be dependent on the assessment. As the offence, if proved, stands completed as soon as the conditions as required under Section 51(3) of Black Money Act, 2015 are fulfilled, irrespective of return of income.”

Furthermore, the Court noted that if there is an adequate efficacious alternative remedy available and the jurisdiction of the High Court has been invoked without availing the same, except in the exceptional cases, such a Writ Petition is not required to be entertained.

The Court also took note of the fact that the Petitioner’s affidavit has not been property attested and even he has not disclosed his address at the United Kingdom. The Court added that it has been alleged that the Petitioner is evading the process of law.

“The party who approaches the Court must come with clean hands. The Petitioner in the present case as alleged has not disclosed his United Kingdom address. The petitioner is thus has not approached the Court with clean hand. In view of the discussions made herein above, the Court is of the considered view that the petition is liable to be dismissed”, it concluded.

Accordingly, the High Court dismissed the Petition.

Cause Title- Sanjay Bhandari v. Income Tax Office (Neutral Citation: 2024:DHC:8713)

Appearance:

Petitioner: Senior Advocate Dayan Krishnan, Advocates Avneesh Arputham, Ankit Sharma, and Abhishek.

Respondent: SSC Zoheb Hossain, Jr. SC Sanjeev Menon, Advocates Vivek Gurnani, and Manish Dubey.

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