Saumya Chaurasia Vs Union of India & Others (Delhi High Court)
HC Upholds prosecution in Rs. 348 cr evasion case, rejects constitutional challenge to CBDT Circular
The Delhi High Court dismissed the petition filed by Saumya Chaurasia challenging sanction notices issued under Section 279(1) authorising her prosecution for alleged wilful tax evasion exceeding ₹348 crore across multiple assessment years, and her constitutional challenge to CBDT Circular No. 5/2020. The Court upheld the competence of the Principal Commissioner of Income Tax to grant sanction, noting that CBDT Circular No. 24/2019 requires collegium approval only where the tax sought to be evaded is below ₹25 lakh, whereas in high-value cases the PCIT’s sanction alone is sufficient. It rejected the argument that prosecution must await ITAT confirmation of penalty, holding that Circular 5/2020 permits prosecution at any stage in serious matters such as search cases. The Court also dismissed the Article 14 challenge, finding that the circular establishes a rational, graded prosecution policy distinguishing between small taxpayers and major evasion cases. Relying on Supreme Court precedent, it reiterated that pendency of appeals before CIT(A) does not bar prosecution, as assessment and criminal proceedings operate independently. Challenges to additions made under Sections 69 and 69A, the validity of Section 153C proceedings, and the evidentiary value of seized material were held to be factual issues for appellate forums, not matters affecting the legality of prosecution sanction. The Court further found no merit in the claim that sanction orders were mechanical or non-speaking, stressing that detailed reasoning is not required at this stage. Distinguishing cases involving violations of natural justice, the Court concluded that the sanction was valid, the CBDT circulars were neither arbitrary nor unconstitutional, and the prosecution was lawfully initiated; accordingly, the writ petition was dismissed.
