The sanction for my prosecution covers a Black Money Act offence too. Can I get the whole complaint quashed for want of a valid s.55 sanction?
Not on these facts. The Karnataka High Court held the s.55 point academic because the trial court, while taking cognizance of the Income-tax Act offences, did not take cognizance of the offence under s.50 of the Black Money Act at all. Whether the sanction that was granted is in accordance with law is for the Special Court to decide at trial, not for a petition under s.482 CrPC.
Decided by the High Court (R. Nataraj J) on 2026-03-11, reported as Criminal Petition No. 6036 of 2017; 2026:KHC:14552; High Court of Karnataka at Bengaluru. It bears on section BMA s.50, section BMA s.55, section 276C(1), section 277, section 279(1), section CrPC s.482, section IPC s.191 of the Income Tax Act 1961, in Prosecution matters.
Sanction is the usual first line of attack on a Black Money Act prosecution. This shows two limits on it: the attack has nothing to bite on if the magistrate never took cognizance of the Act's offence, and even a live sanction dispute is generally sent to the trial court rather than resolved on a quashing petition.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The complaint alleged that the petitioner had failed to make appropriate declarations regarding his investment in a company incorporated in a foreign country, an investment of Rs 10,00,000 in Habitat Holdings Enterprises Inc., British Virgin Islands, relating to assessment year 2008-09 (para 6). In his statement he had said he held no foreign assets other than those in his answer to an earlier question, where he had disclosed only an investment in HIS Majesty Holding Limited, Dubai. The Principal Director of Income Tax (Investigation), Bengaluru granted sanction on 29 March 2016 in exercise of power under s.279(1) of the Income-tax Act, 1961 for prosecution under ss.276C(1) and 277 of that Act, s.191 of the Indian Penal Code and s.50 of the Black Money Act (para 9). The trial court took cognizance of the offences under ss.276C(1) and 277 but did not take cognizance of the offence under s.50 (para 9). The petitioner moved the High Court under s.482 CrPC to quash the prosecution, contending that he could not be prosecuted under s.50 and that in any event it could not be done without sanction under s.55 of the Black Money Act.
The petition was dismissed. Because the trial court 'did not take cognizance of an offence punishable under Section 50 of the Act, 2015', the contention that the petitioner could not be prosecuted under s.50 without a sanction under s.55 was held academic and no ground to upset the prosecution (para 9). Whether the sanction that was granted is in accordance with law is a matter to be established before the Special Court for Economic Offences, Bengaluru and not in a proceeding under s.482 CrPC, and whether the petitioner was complicit in not declaring the investment is a question of fact to be thrashed out in trial (para 10). The Court concluded that the petition lacked merit and dismissed it (para 10).
On the authority to sanction, the Court accepted the respondent's reliance on a CBDT notification dated 13 November 2014 authorising the Principal Director or Director of Income Tax (Investigation) to perform the powers conferred on Directors General of Income Tax and on Principal Directors or Directors of Income Tax under Chapters XIII and XXII of the Income-tax Act, 1961 (para 8). It then read the sanction order and the cognizance order together and found that although the sanction extended to s.50 of the Black Money Act, the trial court had not taken cognizance of that offence, which left the s.55 argument with nothing to operate on (para 9). The remaining challenges - the validity of the sanction and the petitioner's complicity - were held to belong to the trial rather than to the limited jurisdiction under s.482 CrPC (para 10).
did not take cognizance of an offence punishable under Section 50 of the Act, 2015
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Handle my notice → Ask a CA on WhatsAppNot on these facts. The Karnataka High Court held the s.55 point academic because the trial court, while taking cognizance of the Income-tax Act offences, did not take cognizance of the offence under s.50 of the Black Money Act at all. Whether the sanction that was granted is in accordance with law is for the Special Court to decide at trial, not for a petition under s.482 CrPC. This was decided by the High Court (R. Nataraj J) and bears on section BMA s.50, section BMA s.55, section 276C(1), section 277, section 279(1), section CrPC s.482, section IPC s.191 of the Income Tax Act 1961. It is reported as Criminal Petition No. 6036 of 2017; 2026:KHC:14552; High Court of Karnataka at Bengaluru. Sanction is the usual first line of attack on a Black Money Act prosecution. This shows two limits on it: the attack has nothing to bite on if the magistrate never took cognizance of the Act's offence, and even a live sanction dispute is generally sent to the trial court rather than resolved on a quashing petition. If it applies to you, the first step is this: Read the cognizance order before drafting, and identify the offences of which cognizance was actually taken - not the offences the sanction covers.
The complaint alleged that the petitioner had failed to make appropriate declarations regarding his investment in a company incorporated in a foreign country, an investment of Rs 10,00,000 in Habitat Holdings Enterprises Inc., British Virgin Islands, relating to assessment year 2008-09 (para 6). In his statement he had said he held no foreign assets other than those in his answer to an earlier question, where he had disclosed only an investment in HIS Majesty Holding Limited, Dubai. The Principal Director of Income Tax (Investigation), Bengaluru granted sanction on 29 March 2016 in exercise of power under s.279(1) of the Income-tax Act, 1961 for prosecution under ss.276C(1) and 277 of that Act, s.191 of the Indian Penal Code and s.50 of the Black Money Act (para 9). The trial court took cognizance of the offences under ss.276C(1) and 277 but did not take cognizance of the offence under s.50 (para 9). The petitioner moved the High Court under s.482 CrPC to quash the prosecution, contending that he could not be prosecuted under s.50 and that in any event it could not be done without sanction under s.55 of the Black Money Act. The matter was decided on 2026-03-11 by the High Court (R. Nataraj J). On those facts the High Court held as follows. The petition was dismissed. Because the trial court 'did not take cognizance of an offence punishable under Section 50 of the Act, 2015', the contention that the petitioner could not be prosecuted under s.50 without a sanction under s.55 was held academic and no ground to upset the prosecution (para 9). Whether the sanction that was granted is in accordance with law is a matter to be established before the Special Court for Economic Offences, Bengaluru and not in a proceeding under s.482 CrPC, and whether the petitioner was complicit in not declaring the investment is a question of fact to be thrashed out in trial (para 10). The Court concluded that the petition lacked merit and dismissed it (para 10).
On the authority to sanction, the Court accepted the respondent's reliance on a CBDT notification dated 13 November 2014 authorising the Principal Director or Director of Income Tax (Investigation) to perform the powers conferred on Directors General of Income Tax and on Principal Directors or Directors of Income Tax under Chapters XIII and XXII of the Income-tax Act, 1961 (para 8). It then read the sanction order and the cognizance order together and found that although the sanction extended to s.50 of the Black Money Act, the trial court had not taken cognizance of that offence, which left the s.55 argument with nothing to operate on (para 9). The remaining challenges - the validity of the sanction and the petitioner's complicity - were held to belong to the trial rather than to the limited jurisdiction under s.482 CrPC (para 10). In the words reproduced by the source cited on this page: "did not take cognizance of an offence punishable under Section 50 of the Act, 2015"
It was decided by the High Court on 2026-03-11 and is reported as Criminal Petition No. 6036 of 2017; 2026:KHC:14552; High Court of Karnataka at Bengaluru. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section BMA s.50, section BMA s.55, section 276C(1), section 277, section 279(1), section CrPC s.482, section IPC s.191, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The petition was dismissed. Because the trial court 'did not take cognizance of an offence punishable under Section 50 of the Act, 2015', the contention that the petitioner could not be prosecuted under s.50 without a sanction under s.55 was held academic and no ground to upset the prosecution (para 9). Whether the sanction that was granted is in accordance with law is a matter to be established before the Special Court for Economic Offences, Bengaluru and not in a proceeding under s.482 CrPC, and whether the petitioner was complicit in not declaring the investment is a question of fact to be thrashed out in trial (para 10). The Court concluded that the petition lacked merit and dismissed it (para 10). It arises in Prosecution matters, on section BMA s.50, section BMA s.55, section 276C(1), section 277, section 279(1), section CrPC s.482, section IPC s.191 of the Income Tax Act 1961, and was decided by R. Nataraj J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. If the Black Money Act offence is not in the cognizance order, drop the s.55 ground; on this judgment it is academic and will not upset the prosecution. Check the authority who granted the sanction against the notification conferring the power; here a CBDT notification of 13 November 2014 authorised the Principal Director or Director of Income Tax (Investigation) to exercise powers under Chapters XIII and XXII of the Income-tax Act. Do not carry disputed questions of complicity into a s.482 petition; the Court sent them to trial.
Searched for later treatment; none was found. That is not the same as a source affirming it. The judgment was pronounced on 11 March 2026 and no later decision applying, doubting or overruling it was located, which is what would be expected at this distance. No information was found on whether the petitioner has taken the matter further. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The judgment does not decide anything about the content of a s.55 sanction; it holds only that the question did not arise. The document runs to paragraph 10 and the dismissal is in that paragraph, so the operative part was read. Paragraph 9 as printed describes the Income-tax Act offences as being under 'Sections 276C(1) and 277 of IT Act, 2016'; the same sentence describes the sanction as granted under s.279(1) of the IT Act, 1961, and the reference to 2016 is read as a slip for 1961. The neutral citation 2026:KHC:14552 is as printed. The judgment does not record the outcome of the assessment proceedings or whether any penalty was levied. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The petition was dismissed. Because the trial court 'did not take cognizance of an offence punishable under Section 50 of the Act, 2015', the contention that the petitioner could not be prosecuted under s.50 without a sanction under s.55 was held academic and no ground to upset the prosecution (para 9). Whether the sanction that was granted is in accordance with law is a matter to be established before the Special Court for Economic Offences, Bengaluru and not in a proceeding under s.482 CrPC, and whether the petitioner was complicit in not declaring the investment is a question of fact to be thrashed out in trial (para 10). The Court concluded that the petition lacked merit and dismissed it (para 10).
TaxSphere, “H.J. Siwani v Income Tax Department”, https://taxnotice.vittsphere.com/caselaw/case/hj-siwani-v-income-tax-department-bma-55-sanction/ (validity last checked 2026-09-16)
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