Case Law Details
Karti P.Chidambaram Vs DDIT (Madras High Court)
Conclusion: Prosecution launched by the Deputy Director for alleged non disclosure of cash by assessee and his wife was not maintainable and premature one. Merely because the power vested to lodge a complaint by the Deputy Director every case the prosecution could not be launched merely on the conferment of such power without any material. If AO came to the conclusion in a proceedings under Section 153 of the Income Tax Act, it was open to the Department to initiate penal action as per law.
Held: Survey under Section 133 A was carried out in the case of M/s. ASC Private Limited and other entities on 01.12.2015 by the Income Tax Department and Enforcement Directorate and in course of search several hard disks were retrieved. A private complaint was filed by the Deputy Director of Income Tax Department against Mr. Karti P. Chidambaram and Smt. Srinidhi Karti Chidambam for the offences under Section 276C(1), 277 of the Income Tax Act. Assessees and his wife had sold their immovable property situated in Muttukadu village and received Rs.6.38 Crores and Rs.1.36 Crores in cash. However. they had neither disclosed the cash receipts in the return of income. The payment received in cash were suppressed and not shown. Thereby the prosecution had been lodged at the instance of the Deputy Director of Income Tax Department for alleged non-disclosure of income by them to the tune of Rs.7.73 crore for 2015-16 fiscal under section 276C(1), 277 and 278. It was held that merely because the power vested to lodge a complaint by the Deputy Director every case the prosecution could not be launched merely on the conferment of such power without any material. Only in the cases where incriminating materials seized from the possession of the assessee and any statements which incriminate themselves recorded under 132 (4) of the Income tax Act or any incriminating evidence collected clinchingly establishes complicity of the accused with the crime, prosecution can be initiated without waiting for the assessment or reassessment proceedings. Otherwise when materials collected are weak and prosecution itself rely them only as corroborative evidence then Department has to wait till the finding recorded by Assessing Officer. The prosecution launched by the Deputy Director was not maintainable and the present complaint lodged by the prosecution was premature one. If AO came to the conclusion in a proceedings under Section 153 of the Income Tax Act, it was open to the Department to initiate penal action as per law.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
Aggrieved over the order of the Special Court No.1 for Trial of Criminal Cases related to Elected Members of Parliament and Members of Legislative Assembly of Tamiland in Crl.M.P.No.25634 of 2019 in C.C.No.15 of 2019 and Crl.M.P.No.25633 of 2019 in C.C.No.16 of 2019 the present revisions filed.
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