Anurag Dalmia Vs ITO (Delhi High Court)
No criminal action merely on basis of unauthenticated documents from Foreign Govt regarding Swiss Bank account of assessee in absence of wrongdoing
Conclusion: Merely on some unauthenticated information received from a third Country with no material evidence, was not sufficient to make out a prima facie case and there could not be a presumption that a person had committed any wrongdoing. Thus, no proceedings against assessee under Section 276C, 276D and 277.
Held: Assessee had sought quashing of the criminal complaints on the ground that the assessment order forming the foundation of the complaints had been set aside in Appeal by Tribunal. Significant to note that the assessment order was passed in the backdrop of information received from the French Government under the Double Taxation Avoidance Agreement (DTAA), indicating that assessee held bank accounts in HSBC Private Bank (Suisse), SA, Switzerland. Though assessee denied the allegations, an assessment order came to be passed against him, making certain additions on account of an undisclosed alleged Foreign Bank Account. The criminal complaints were also launched on this basis. After Tribunal set aside the additions, assessee approached High Court contending that nothing survived for prosecution. Revenue however, contended that the result of any proceeding under the IT Act would not be binding on the criminal court, which must independently decide on the basis of evidence before it. It was held by High Court conceded that if credible information about a wrongdoing associated with the income of an individual was received, the Department was duty-bound to investigate the same, within the boundaries of constitutional permissibility. However, in the present case, it noted that the source of information was “non-authenticated documents” received from the French Government under DTAA. The Court also noted that on the basis of these unauthenticated documents, a raid was conducted in the premises of assessee, but no incriminating document even remotely suggesting the existence of a foreign Account was discovered. Thus, in the absence of any evidence of there being a concealment of the income, the Court held, it could not be said that the income Assessment as submitted by assessee was fraudulent or that there was any concealment of true income.
