Surinder Nath Jain and others Vs ITO (Jammu & Kashmir And Ladakh high Court)
High Court of Jammu & Kashmir and Ladakh recently dismissed a petition filed by Surinder Nath Jain and others seeking to quash a complaint filed against them by the Income Tax Officer, Jammu. The petitioners had invoked the inherent powers of the court under Section 482 of the Criminal Procedure Code (Cr.P.C.) to quash the complaint pending before the Special Mobile Magistrate, Jammu.
The complaint alleged that the petitioners had committed offenses under Section 276C(1) read with Section 277 of the Income Tax Act, 1961. It stated that the petitioners, as owners of a plot of land, sold the property for Rs. 69,00,000 while an alleged agreement to sell indicated a total sale consideration of Rs. 1.75 crores, with Rs. 25,00,000 paid in advance. The complaint further alleged that the difference of Rs. 1.06 crores was received in cash, thereby evading capital gains tax. The trial court took cognizance of the offenses and summoned the accused, including the petitioners.
The petitioners argued that the complaint was a misuse of the process of law, that the allegations were absurd, that the proceedings were mala fide, and that the prosecution under Section 276C(1) was premature as the income tax return for the relevant financial year was yet to be filed. They also argued that Section 277 was inapplicable as no false statement or verification had been made by them.
The respondent countered these arguments, stating that the petitioners had previously filed a similar petition that was dismissed for non-prosecution. The respondent essentially reiterated the allegations made in the complaint.
The High Court, after reviewing the arguments and the record, focused on whether the exercise of its inherent powers under Section 482 Cr.P.C. was warranted. The court cited the Supreme Court’s guidelines in M/s Neeharika Infrastructure Pvt. vs. State of Maharashtra & Ors., emphasizing that quashing should be done sparingly, in the rarest of rare cases. The court reiterated that at this stage, it could not examine the reliability of the allegations and that criminal proceedings should not be scuttled at the initial stage. The court’s role under Section 482 Cr.P.C. is limited to determining if the complaint discloses a cognizable offense.
Since the complaint specifically alleged offenses under Sections 276C(1) and 277 of the Income Tax Act, which are deemed cognizable under Section 279A, the High Court held that it could not interfere with or quash the complaint at this stage. The court noted that the petitioners’ grounds for quashing essentially constituted defenses that they could raise during the trial. Therefore, the High Court declined to exercise its inherent powers and dismissed the petition.
FULL TEXT OF THE JUDGMENT/ORDER OF JAMMU & KASHMIR AND LADAKH HIGH COURT
