Validity of summon order passed by trial court and criminal proceedings u/s 279(1) r.w. section 276D

Brief Background of case

The petitioner by letter dated 17^th November, 2011 had disclosed a foreign bank account which existed with the HSBC Private Bank, Geneva, Switzerland to the Director of Income Tax (Investigation-II). The peak amount lying in the said account during the year ending 31^st March, 2007 was around US$ 1.3 million. The account was closed in the year 2007. After recording the petitioner’s statement on 24^th November 2011 and 9^th December 2011 u/s 131 of the I.T. Act, DCIT issued notice dated 9^th July 2012 u/s 148 of the Act. In response, return of income declaring the peak balance of said bank account amounting to Rs.6,48,76,162 for A.Y. 2006-07 and Rs.27,94,163 for A.Y. 2007-08 was filed. Notices u/s 142(1) of the Act, were issued by respondent on several dates i.e., on 02-05-2013, 12-06-2013, 11-07-2013, 20-08-2014 and 15-12-2014 calling upon the petitioner to furnish details of the foreign bank account and its statement along-with transactions details. The petitioner filed the replies of above notices. On 05-01-2015, statement of the petitioner was recorded on oath that he had voluntarily disclosed his foreign bank account with HSBC Private Bank, Geneva, Switzerland by letter dated 17-11-2011. A show-cause notice dated 07-01-2015 u/s 279(1) read with section 276-D was issued informing the petitioner to launch prosecution for alleged willful failure to produce accounts and documents in terms of notices u/s 142(1) of the Act. In response to this show-cause notice, reply was furnished by petitioner through a letter dated 19-01-2015. On 09-02-2015, the petitioner sent another reply whereby it was stated that the petitioner with great difficulty had been able to obtain the copy of the bank statement of the Account Number 12119836 at HSBC, Private Bank, Geneva, Switzerland for the entire period of operation of the said Account enclosing the said bank statement with letter. This was again reiterated by reply dated 11-02-2015 on the subject which was received by respondent on the same date. CIT, however, authorised Dr. Sujeet Singh, ACIT, to institute a Criminal Complaint u/s 276-D of the Act for A.Y. 2006-07 through a sanction/authority letter dated 10-02-2015 containing reason of such initiation which mainly read out as…..

“The assessee has surrendered the peak credit in foreign bank account it clearly shows that he is in possession of the complete details of his said account including bank statements etc. which he has wilfully not furnished.

7. AND WHEREAS from the perusal of records placed before me, I am satisfied and am of the opinion that the assessee has wilfully not furnished the required details as per Notices U/s 142 (1) of the IT Act and has thus committed offence punishable u/s 276-D of the I.T. Act 1961.”

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