ACIT Vs State (Delhi High Court)
Delhi High Court held that application of income tax department for release of FDR towards tax liability not entertained until conclusion of trial under Prevention of Money Laundering Act, 2002 [PMLA] since PMLA has an overriding effect over the provisions of Income Tax Act.
Facts- Petition under Section 482 of the Code of Criminal Procedure, 1973 has been filed on behalf of the Petitioner/Asst. Commissioner of Income Tax (ACIT), to challenge the Order dated 05.02.2018 of learned Special Judge (PC Act), CBI-05, New Delhi, dismissing the Application under Section 226(4) of the Income Tax Act, 1961, filed by the Petitioner in SC No. 9593/2016 for direction to release all the FDRs, for recovery of Tax Demand against the Respondent Nos. 3 to 6 and M/s Stockguru India, a Partnership Firm of the Respondent Nos. 3 and 4, for the Assessment Years (AY) 2010-2011 and 2011-2012.
Conclusion- Section 71 of PMLA has an overriding effect over the provisions of the IT Act because PMLA got assent from the President on a later day. Therefore, the Authority is competent to pass an Provisional Attachment Order, after following due procedure prescribed under the Act.
Held that the Application of the Income Tax Department for release of the FDR amounts to be appropriated towards the alleged tax liability of the accused persons, has been rightly rejected and cannot be entertained until the conclusion of the trial in the criminal case, as any premature release would prejudice the ongoing PMLA proceedings. There is no merit in the present Petition, which is hereby dismissed. The Petition stands disposed of accordingly.
