B.Faiyaz Ahamed Vs ACIT (Madras High Court)
Madras HC Suspends 2-Year Rigorous Imprisonment in Income-Tax Prosecution Under Sections 276C(2)/278E Pending Appeal
Summary: The Madras High Court suspended the two-year rigorous imprisonment imposed on B.Faiyaz Ahamed following his conviction for offences punishable under Sections 276C(2) read with 278E of the Income-tax Act, 1961, pending disposal of his criminal appeal. The Trial Court, after a full-fledged trial, had sentenced the petitioner to two years’ rigorous imprisonment and imposed a fine of ₹24,80,35,290/-, with six months’ simple imprisonment in default. His application seeking suspension of sentence pending appeal was rejected by the Principal District and Sessions Judge, Coimbatore.
Before the High Court, the petitioner contended that the Trial Court had not properly appreciated the oral and documentary evidence, that substantial grounds existed in the appeal and that he was willing to comply with stringent conditions. The Income-tax Department opposed the petition, relying on the conviction after a full-fledged trial and the substantial fine imposed.
Considering the nature of the offence, the sentence imposed, the pendency of the appeal and the period of sentence, the High Court set aside the Sessions Court’s order and suspended the substantive sentence of imprisonment alone pending disposal of the appeal. The petitioner was ordered to be released on bail on executing a bond of ₹25,000/- with two sureties for a like sum each, subject to specified conditions, including monthly appearance before the Trial Court. The order expressly suspended only the imprisonment and did not suspend the fine.
The Madras High Court suspended the two-year rigorous imprisonment imposed on the assessee following his conviction for offences punishable under Sections 276C(2) read with 278E of the Income-tax Act, 1961, pending disposal of his criminal appeal.
The Trial Court, after a full-fledged trial, had convicted the assessee and sentenced him to two years’ rigorous imprisonment besides imposing a massive fine of ₹24,80,35,290, with six months’ simple imprisonment in default. The assessee’s application before the Principal District and Sessions Judge, Coimbatore, seeking suspension of sentence pending appeal had been rejected.
Before the High Court, the assessee contended that the Trial Court had not properly appreciated the oral and documentary evidence, that substantial grounds existed for challenging the conviction, and that he was willing to comply with any stringent conditions imposed for suspension of sentence. The Income-tax Department opposed the relief, emphasising that the conviction followed a full trial and involved a substantial fine.
Considering the nature of the offence, the sentence imposed, the pendency of the criminal appeal and the period of imprisonment, the High Court held that the sentence deserved to be suspended subject to appropriate conditions. It accordingly set aside the Sessions Court’s order refusing suspension of sentence.
Significantly, the High Court expressly ordered that only the substantive sentence of imprisonment was suspended pending appeal. The petitioner was directed to be released on bail on executing a bond of ₹25,000 with two sureties for a like sum each and was required to appear before the Trial Court on the first working day of every calendar month at 10.30 a.m. until disposal of the appeal.
Key takeaway: Pending an appeal against conviction under Sections 276C(2)/278E, the High Court may suspend the substantive imprisonment considering the nature and duration of the sentence and pendency of the appeal. Here, however, the relief was expressly confined to imprisonment and did not extend to suspension of the ₹24.80 crore fine.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This Criminal Original Petition has been filed challenging the order dated 23.06.2026 passed in Crl.M.P.No.1 of 2026 in C.A.No.317 of 2026 by the Principal District and Sessions Judge, Coimbatore, thereby dismissing the petition filed by the petitioner seeking suspension of sentence pending disposal of the appeal.
2. Heard the learned counsel appearing on either side and perused the materials available on record.
3. The petitioner is the accused in the complaint lodged by the respondent for the offence punishable under Sections 276C(2) read with 278E of the Income Tax Act, 1961. After a full-fledged trial, the Trial Court convicted the petitioner for the aforesaid offences and sentenced him to undergo two years rigorous imprisonment and to pay a fine of Rs.24,80,35,290/-, in default, to undergo simple imprisonment for a period of six months. Aggrieved by the said conviction and sentence, the petitioner preferred an appeal in C.A.No.317 of 2026 before the Principal District and Sessions Judge, Coimbatore. Pending appeal, the petitioner filed a petition in Crl.M.P.No.1 of 2026 seeking suspension of sentence. However, the Appellate Court, by order dated 23.06.2026, dismissed the said petition. Hence, the present Criminal Original Petition has been filed.
4. The learned counsel appearing for the petitioner submitted that the Trial Court, without properly appreciating the oral and documentary evidence available on record, has mechanically convicted the petitioner. He further submitted that the petitioner has been suffering incarceration and that there are substantial grounds available in the appeal warranting interference with the judgement of conviction and sentence passed by the Trial Court. He also submitted that the petitioner is ready and willing to abide by any stringent condition that may be imposed by this Court. Hence, he prayed for suspension of sentence imposed on the petitioner pending disposal of the appeal.
5. The learned Senior Standing Counsel for Income Tax, appearing for the respondent, submitted that the petitioner was found guilty of the offence and the Trial Court, after conducting a full-fledged trial, has rightly convicted and sentenced him. He further submitted that a substantial fine has been imposed on the petitioner and that there are no valid grounds warranting suspension of sentence. Hence, he prayed for dismissal of the present petition.
6. This Court has considered the rival submissions and perused the materials available on record. Considering the nature of the offence, the sentence imposed on the petitioner, the fact that the appeal is pending before the Principal District and Sessions Judge, Coimbatore and the period of sentence imposed, this Court is inclined to suspend the sentence imposed on the petitioner, subject to the appropriate conditions.
7. In view of the foregoing discussion, the order dated 23.06.2026 passed in Crl.M.P.No.1 of 2026 in c.A.No.317 of 2026 by the Principal District and Sessions Judge, Coimbatore, is hereby set aside. Accordingly, till the disposal of the Criminal Appeal, the substantive sentence of imprisonment imposed by the learned Trial Court alone is suspended and the petitioner is ordered to be released on bail, subject to the following conditions:-
(a) The petitioner/accused is ordered to be released on bail, on his executing a bond for a sum of Rs.25,000/- (Rupees Twenty Five Thousand only) with two sureties each for a like sum to the satisfaction of the learned Principal District and Sessions Judge, Coimbatore;
(b) The petitioner/accused and the sureties shall affix their photographs and Left Thumb Impressions in the surety bonds and the Magistrate may obtain a copy of their Aadhaar Cards or Bank Pass Books to ensure their identities.
(c) The petitioner shall appear before the Trial Court on the first working day of every English Calendar month at 10.30 a.m., until the disposal of the Criminal Appeal and if there are not able to appear before the trial Court on any day, they shall make arrangements to file an application under Section 317 Cr.P.C. and shall appear before the trial Court on any other day in lieu of the date of his absence, as directed by the trial Court.
8. With the above directions, this Criminal Original Petition is ordered.
