Raj Kumar Kedia Vs ITO (Delhi High Court)
Prosecution for ₹700 Cr Accommodation Entry Racket to Proceed – Sanction by Principal Director (Inv.) Upheld: Delhi HC; “Commissioner” in s.279 includes “Principal Director” for purposes of granting prosecution sanction; Prosecution for tax offences can proceed independent of completion of assessment; Authorization to file complaint can be delegated to officers like Deputy Directors; Retraction of statements & pendency of assessment do not automatically bar prosecution.
Delhi High Court dismissed petitions seeking quashing of criminal complaints u/s 276C(1) & 277A of the Income-tax Act, 1961, arising from an alleged accommodation entry racket involving cash transactions of over ₹700 crore.
On 13.6.2014, a search u/s 132 was conducted at the petitioner’s premises, resulting in seizure of documents. Statements u/s 132(4) & 131(1)(A) were recorded, in which the petitioner allegedly admitted to providing accommodation entries, earning ~₹2.08 crore commission in FY 2014–15 (AY 2015–16). Howvere, Petitioner later retracted his statement (Oct 2014). Criminal complaints were instituted for wilful attempt to evade tax (s.276C(1)) & falsification of books (s.277A).
Petitioner’s argued that Sanction was granted by Principal Director (Investigation)-I, whereas s.279(1) allows only Principal Commissioner/Commissioner to accord sanction and hence it was Invalid Sanction. Complaint was filed by Deputy Director (Investigation) after expiry of 60 days u/s 132(9A) when jurisdiction passed to the AO. Sanction Order Did not specify whether sanction was for s.276C(1) or (2) and hence vague. Its is Premature Filing as No completed assessment to prove tax evasion; AY 2015–16 proceedings had not even commenced. Sanction is Mechanical as Granted without consideration of ITRs, assessment orders, or statements.
