CBDT Circular 24/2019 says prosecution under s.276C(1) is to be launched only after the ITAT confirms the penalty. My appeal is still before the CIT(A). Can the sanction under s.279(1) be quashed on that ground?
Not where the amount sought to be evaded exceeds Rs.25 lakh. On the Delhi High Court's reading of Circular No.24/2019 dated 09.09.2019 as clarified by Circular No.5/2020 dated 23.01.2020, the requirement of prior administrative approval of a collegium of two CCIT/DGIT rank officers, and the direction that prosecution be launched only after the ITAT confirms the penalty, are addressed to cases at or below the Rs.25 lakh threshold; above it the approval of the sanctioning authority, the Principal Commissioner, suffices and no pre-condition is attached. The challenge to Circular 5/2020 under Article 14 was rejected.
Decided by the High Court (V. Kameswar Rao J and Vinod Kumar J) on 2025-12-08, reported as W.P.(C) 8191/2025 with CM APPL. 35871/2025 and CM APPL. 64534/2025 (High Court of Delhi); judgment reserved 06.11.2025. It bears on section 276C, section 276C(1), section 278E, section 279(1), section 119, section 153C, section 275, section 69, section 69A, section 220(6), section 226(3) of the Income Tax Act 1961, in Prosecution, Penalty and Search, Survey & Block Assessment matters.
This is the limit on the most useful line a practitioner has — that the prosecution should follow, not precede, the penalty appeal. The circulars are relied on constantly to stall a sanction while the CIT(A) or the Tribunal is seized of the quantum, and this judgment holds that the protection they give is threshold-based, not universal, and that in search and survey cases prosecution may be launched at any stage. Two cautions. First, this concerns the administrative guidelines for launching prosecution, not the separate proposition in K.C. Builders that a prosecution cannot survive once the Tribunal has deleted the penalty on the same facts — that remains untouched and remains the stronger point once the Tribunal has actually decided. Second, the Court declined to go into the merits of the s.69 and s.69A additions at this stage, so nothing in this judgment forecloses the quantum appeal.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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A search and seizure operation was carried out in February and March 2020 against the Bhatia, Tuteja and Dhand groups in Chhattisgarh in connection with unaccounted liquor sales, including at the petitioner's residence at Bhilai. Her case was centralised with Central Circle-8, New Delhi under s.127 by order dated 29.06.2021. Notices under s.153C were issued on 09.05.2022 and 23.06.2022 and assessment orders were passed on 26.03.2024, 28.03.2024 and 30.03.2024 for AYs 2011-12 to 2017-18, 2019-20, 2020-21 and 2022-23, with an aggregate demand exceeding Rs.348 crores; additions were made under s.69A on the basis of loose papers, diaries and WhatsApp chats and under s.69 in respect of properties said to be held benami. Appeals were filed before the CIT(A). Recovery proceedings followed, with a stay of 80 per cent of the demand under s.220(6) by order dated 11.06.2025 subject to deposit of 20 per cent, and a certificate under s.222/223 dated 30.07.2025 for Rs.3,60,40,61,056. The PCIT, Central-1, Delhi passed sanction orders dated 10.02.2025, 11.02.2025 and 19.02.2025 under s.279(1) authorising the DCIT, Central Circle-8, to prosecute under s.276C. Complaints were filed under s.223 BNSS before the ACJM (Special Acts), Tis Hazari; the ACJM directed the petitioner to appear before cognizance and summons dated 25.09.2025 were issued. She also faced ED proceedings and three FIRs registered by the EOW, Chhattisgarh. The writ petition sought quashing of the sanction notices and a declaration that Circular No.5/2020 was unconstitutional.
The petition was dismissed. Where the amount sought to be evaded exceeds Rs.25 lakh, the approving authority under Circular No.24/2019 as clarified by Circular No.5/2020 is the sanctioning authority, that is the Principal Commissioner, and no pre-condition — including confirmation of the penalty order by the Income Tax Appellate Tribunal, or the prior administrative approval of a collegium of two CCIT/DGIT rank officers — is attached to the launching of prosecution in such a case. Circular No.5/2020 is a clarification to be read as part of Circular No.24/2019 and is not manifestly arbitrary or violative of Article 14.
The Court set out Circular No.24/2019 in full and the relevant extract of Circular No.5/2020, and read them together. Paragraph 2 of Circular 24/2019 prescribes threshold-based criteria: for offences under s.276B and s.276BB, non-payment of Rs.25 lakh or below with a delay of less than 60 days is not normally to be processed for prosecution; for s.276C(1) and s.276CC, cases at or below Rs.25 lakh are not to be processed except with the previous administrative approval of the collegium described in paragraph 3. The Court held that the intent behind the circulars was not to launch prosecution in small cases, and that neither the requirement of collegium approval nor the direction on ITAT confirmation attaches where the amount exceeds the threshold; Circular 5/2020 made no amendment to paragraph 4 or the annexure, and the annexure makes the sanctioning authority the approving authority where the amount exceeds Rs.25 lakh (paras 23 to 26 and 34). Since the demand exceeded Rs.348 crores and the petitioner did not dispute that the amount was above the threshold or that the PCIT had approved, the sanction stood (paras 26 and 28). The Article 14 challenge failed because there is a clear demarcation in the two circulars, so Indian Express Newspapers (Bombay) (P) Ltd. v. Union of India (1985) 1 SCC 641 did not assist, and State of Punjab v. Khan Chand (1974) 1 SCC 549 was distinguished on the facts and the magnitude of the alleged evasion (para 27). Revenue's contention that s.275 does not bar the initiation of prosecution while appeals are pending, and that s.276C(1) contains no pre-condition of imposition of penalty, was recorded (para 17). The Calcutta High Court interim orders in Miraj Digvijay Shah and Banwari Lal Agarwal were distinguished on facts (para 29), as was Vijay Krishnaswami, on the ground that there the prosecution was quashed because no attempt to evade payment was made and the procedure was not followed (para 31). The challenge to the s.127 transfer order for want of a DIN, and the merits of the s.69 and s.69A additions, were held to be questions of fact not to be decided at that stage (paras 30 and 33).
No pre-conditions have been attached while taking action in cases where the evasion is more than Rs.25 lacs.
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Handle my notice → Ask a CA on WhatsAppNot where the amount sought to be evaded exceeds Rs.25 lakh. On the Delhi High Court's reading of Circular No.24/2019 dated 09.09.2019 as clarified by Circular No.5/2020 dated 23.01.2020, the requirement of prior administrative approval of a collegium of two CCIT/DGIT rank officers, and the direction that prosecution be launched only after the ITAT confirms the penalty, are addressed to cases at or below the Rs.25 lakh threshold; above it the approval of the sanctioning authority, the Principal Commissioner, suffices and no pre-condition is attached. The challenge to Circular 5/2020 under Article 14 was rejected. This was decided by the High Court (V. Kameswar Rao J and Vinod Kumar J) and bears on section 276C, section 276C(1), section 278E, section 279(1), section 119, section 153C, section 275, section 69, section 69A, section 220(6), section 226(3) of the Income Tax Act 1961. It is reported as W.P.(C) 8191/2025 with CM APPL. 35871/2025 and CM APPL. 64534/2025 (High Court of Delhi); judgment reserved 06.11.2025. This is the limit on the most useful line a practitioner has — that the prosecution should follow, not precede, the penalty appeal. The circulars are relied on constantly to stall a sanction while the CIT(A) or the Tribunal is seized of the quantum, and this judgment holds that the protection they give is threshold-based, not universal, and that in search and survey cases prosecution may be launched at any stage. Two cautions. First, this concerns the administrative guidelines for launching prosecution, not the separate proposition in K.C. Builders that a prosecution cannot survive once the Tribunal has deleted the penalty on the same facts — that remains untouched and remains the stronger point once the Tribunal has actually decided. Second, the Court declined to go into the merits of the s.69 and s.69A additions at this stage, so nothing in this judgment forecloses the quantum appeal. If it applies to you, the first step is this: Find the amount sought to be evaded that the sanction proceeds on, and check it against the Rs.25 lakh threshold before you build any argument on Circular 24/2019 — the whole of this judgment turns on which side of that line the case falls.
A search and seizure operation was carried out in February and March 2020 against the Bhatia, Tuteja and Dhand groups in Chhattisgarh in connection with unaccounted liquor sales, including at the petitioner's residence at Bhilai. Her case was centralised with Central Circle-8, New Delhi under s.127 by order dated 29.06.2021. Notices under s.153C were issued on 09.05.2022 and 23.06.2022 and assessment orders were passed on 26.03.2024, 28.03.2024 and 30.03.2024 for AYs 2011-12 to 2017-18, 2019-20, 2020-21 and 2022-23, with an aggregate demand exceeding Rs.348 crores; additions were made under s.69A on the basis of loose papers, diaries and WhatsApp chats and under s.69 in respect of properties said to be held benami. Appeals were filed before the CIT(A). Recovery proceedings followed, with a stay of 80 per cent of the demand under s.220(6) by order dated 11.06.2025 subject to deposit of 20 per cent, and a certificate under s.222/223 dated 30.07.2025 for Rs.3,60,40,61,056. The PCIT, Central-1, Delhi passed sanction orders dated 10.02.2025, 11.02.2025 and 19.02.2025 under s.279(1) authorising the DCIT, Central Circle-8, to prosecute under s.276C. Complaints were filed under s.223 BNSS before the ACJM (Special Acts), Tis Hazari; the ACJM directed the petitioner to appear before cognizance and summons dated 25.09.2025 were issued. She also faced ED proceedings and three FIRs registered by the EOW, Chhattisgarh. The writ petition sought quashing of the sanction notices and a declaration that Circular No.5/2020 was unconstitutional. The matter was decided on 2025-12-08 by the High Court (V. Kameswar Rao J and Vinod Kumar J). On those facts the High Court held as follows. The petition was dismissed. Where the amount sought to be evaded exceeds Rs.25 lakh, the approving authority under Circular No.24/2019 as clarified by Circular No.5/2020 is the sanctioning authority, that is the Principal Commissioner, and no pre-condition — including confirmation of the penalty order by the Income Tax Appellate Tribunal, or the prior administrative approval of a collegium of two CCIT/DGIT rank officers — is attached to the launching of prosecution in such a case. Circular No.5/2020 is a clarification to be read as part of Circular No.24/2019 and is not manifestly arbitrary or violative of Article 14.
The Court set out Circular No.24/2019 in full and the relevant extract of Circular No.5/2020, and read them together. Paragraph 2 of Circular 24/2019 prescribes threshold-based criteria: for offences under s.276B and s.276BB, non-payment of Rs.25 lakh or below with a delay of less than 60 days is not normally to be processed for prosecution; for s.276C(1) and s.276CC, cases at or below Rs.25 lakh are not to be processed except with the previous administrative approval of the collegium described in paragraph 3. The Court held that the intent behind the circulars was not to launch prosecution in small cases, and that neither the requirement of collegium approval nor the direction on ITAT confirmation attaches where the amount exceeds the threshold; Circular 5/2020 made no amendment to paragraph 4 or the annexure, and the annexure makes the sanctioning authority the approving authority where the amount exceeds Rs.25 lakh (paras 23 to 26 and 34). Since the demand exceeded Rs.348 crores and the petitioner did not dispute that the amount was above the threshold or that the PCIT had approved, the sanction stood (paras 26 and 28). The Article 14 challenge failed because there is a clear demarcation in the two circulars, so Indian Express Newspapers (Bombay) (P) Ltd. v. Union of India (1985) 1 SCC 641 did not assist, and State of Punjab v. Khan Chand (1974) 1 SCC 549 was distinguished on the facts and the magnitude of the alleged evasion (para 27). Revenue's contention that s.275 does not bar the initiation of prosecution while appeals are pending, and that s.276C(1) contains no pre-condition of imposition of penalty, was recorded (para 17). The Calcutta High Court interim orders in Miraj Digvijay Shah and Banwari Lal Agarwal were distinguished on facts (para 29), as was Vijay Krishnaswami, on the ground that there the prosecution was quashed because no attempt to evade payment was made and the procedure was not followed (para 31). The challenge to the s.127 transfer order for want of a DIN, and the merits of the s.69 and s.69A additions, were held to be questions of fact not to be decided at that stage (paras 30 and 33). In the words reproduced by the source cited on this page: "No pre-conditions have been attached while taking action in cases where the evasion is more than Rs.25 lacs." The decision followed or applied P. Jayappan v. S.K. Perumal, First ITO [1984] 149 ITR 696 (SC) — relied on by Revenue and accepted; Raj Kumar Kedia v. Income Tax Office [2025] 176 taxman.com 857 (Delhi) — cited by Revenue in argument; the citation string appears in the judgment but the decision is not applied in the Court's reasoning; Indian Express Newspapers (Bombay) (P) Ltd. v. Union of India (1985) 1 SCC 641 — held not to assist the petitioner; Vijay Krishnaswami v. Deputy Director of Income Tax (Investigation), 2025 INSC 1048 — distinguished; CIT v. Brandix Mauritius Holdings Ltd. (2023) 456 ITR 34 (Del) and Kamlesh Kumar Jha v. PCIT (2024) 469 ITR 519 (Del) — not applied at this stage.
It was decided by the High Court on 2025-12-08 and is reported as W.P.(C) 8191/2025 with CM APPL. 35871/2025 and CM APPL. 64534/2025 (High Court of Delhi); judgment reserved 06.11.2025. 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 276C, section 276C(1), section 278E, section 279(1), section 119, section 153C, section 275, section 69, section 69A, section 220(6), section 226(3), 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. Where the amount sought to be evaded exceeds Rs.25 lakh, the approving authority under Circular No.24/2019 as clarified by Circular No.5/2020 is the sanctioning authority, that is the Principal Commissioner, and no pre-condition — including confirmation of the penalty order by the Income Tax Appellate Tribunal, or the prior administrative approval of a collegium of two CCIT/DGIT rank officers — is attached to the launching of prosecution in such a case. Circular No.5/2020 is a clarification to be read as part of Circular No.24/2019 and is not manifestly arbitrary or violative of Article 14. It arises in Prosecution, Penalty and Search, Survey & Block Assessment matters, on section 276C, section 276C(1), section 278E, section 279(1), section 119, section 153C, section 275, section 69, section 69A, section 220(6), section 226(3) of the Income Tax Act 1961, and was decided by V. Kameswar Rao J and Vinod Kumar 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. Where the amount is at or below Rs.25 lakh, ask for the record of the collegium's prior administrative approval; that is the requirement the circular actually imposes. Where the case arises out of a search or survey under s.132, s.132A or s.133A, expect the Department to rely on the clarification in Circular 5/2020 that prosecution may be launched at any stage of the proceedings. Keep the K.C. Builders point in reserve for the stage at which the Tribunal decides the penalty appeal, and press for early listing of that appeal rather than treating the circular as a stay of the prosecution. Do not put the merits of the additions into a writ against the sanction; the Court treated them as questions of fact for the appellate authority.
Searched for later treatment; none was found. That is not the same as a source affirming it. No later decision has adopted, doubted or distinguished the reading of Circular No. 24/2019 as clarified by Circular No. 5/2020 under which the collegium approval requirement does not apply where the amount sought to be evaded exceeds Rs.25 lakh. Two decisions surface under the petitioner's name together with s.276C and neither is treatment of this judgment. The Delhi High Court's judgment of 8 January 2024 in ITO v Anil Tuteja pre-dates it. Niranjan Das v Directorate of Enforcement (Chhattisgarh High Court, 10 March 2026) mentions this petitioner as a person connected with the same investigation and does not consider the income-tax holding. The judgment dismissed the petition in full and granted no liberty and no interim relief. No special leave petition against it has been traced. Weigh it as follows. It is a High Court decision on the construction of two administrative circulars, and it removes the most commonly used ground for stalling a sanction under s.279(1) where the amount is large. It does not decide, and expressly did not decide, anything about the merits of the additions under s.69 and s.69A, or about the s.127 transfer. What would displace it: a decision reading paragraph 4 of Circular 24/2019 as imposing the ITAT-confirmation condition generally rather than only on cases at or below the threshold; an amendment or superseding circular altering the annexure that makes the sanctioning authority the approving authority above Rs.25 lakh; or a successful challenge to Circular No. 5/2020, which was rejected here under Article 14. 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.
Three things to note in the report, and then the limits of the decision. The assessment years listed in paragraph 2 — 2011-12, 2012-13, 2014-15, 2017-18, 2019-20, 2020-21 and 2022-23 — do not match those listed in paragraph 4, which adds 2015-16. The judgment does not reconcile them, and neither does this entry. The prayer and paragraphs 2 and 21 describe the sanction as authorising prosecution 'under Section 276C and 278E'. Section 278E creates no offence; it is a rule of evidence, presuming a culpable mental state. That description is loose and should not be read as authority that a prosecution lies 'under s.278E'. The judgment reproduces Circular No. 24/2019 at paragraph 23 and the relevant extract of Circular No. 5/2020 at paragraph 24, and paragraph 6 sets out a tabular comparison of the two. Those extracts and that table are the Court's record of the circulars; they have not been separately verified against the Board's own publication. Anyone building a case on the exact wording of paragraph 2, paragraph 3, paragraph 4 or the annexure of Circular 24/2019 should read the circular itself, because the whole judgment turns on what those paragraphs say and on the annexure's identification of the approving authority. Now the limits. The Court declined to go into the merits of the s.69 and s.69A additions, and declined to decide the challenge to the s.127 transfer order for want of a DIN, holding both to be questions of fact not to be decided at that stage. Nothing in the judgment forecloses the quantum appeals pending before the CIT(A). And the judgment is about the administrative guidelines for launching a prosecution. It is not about whether a prosecution survives after the Tribunal has deleted the penalty on the same facts, which is K.C. Builders and which remains untouched by it. The distinction is worth keeping sharp, because the two arguments are made at different stages and only one of them is answered here. Two figures fix the scale and explain the result. The aggregate demand for AYs 2011-12 to 2022-23 exceeded Rs 348 crores, and a recovery certificate for Rs 3,60,40,61,056 was issued on 30 July 2025. Against a threshold of Rs 25 lakh, no argument about which side of the line the case fell on was available, and the petitioner did not dispute that the amount was above it or that the Principal Commissioner had approved. One procedural point is worth carrying. Recovery had already been stayed as to eighty per cent of the demand under s.220(6), and the Court did not treat that stay as bearing on the sanction at all. 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. Where the amount sought to be evaded exceeds Rs.25 lakh, the approving authority under Circular No.24/2019 as clarified by Circular No.5/2020 is the sanctioning authority, that is the Principal Commissioner, and no pre-condition — including confirmation of the penalty order by the Income Tax Appellate Tribunal, or the prior administrative approval of a collegium of two CCIT/DGIT rank officers — is attached to the launching of prosecution in such a case. Circular No.5/2020 is a clarification to be read as part of Circular No.24/2019 and is not manifestly arbitrary or violative of Article 14.
TaxSphere, “Saumya Chaurasia v Union of India”, https://taxnotice.vittsphere.com/caselaw/case/saumya-chaurasia-v-uoi-prosecution-before-itat-confirms-penalty/ (validity last checked 2026-09-08)
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The Deputy Director (Investigation) has filed a complaint under s.276C(1) and s.277 based on material seized from third parties, with no assessment or reassessment order against me. Can that prosecution stand?
The Tribunal has deleted the additions and the penalty has been cancelled. The criminal complaint is still pending on exactly the same allegations. Does it survive?
After a search I filed revised returns giving up a capital gains claim and paid the tax. Can I still be prosecuted under s.276C(1) for wilful evasion?
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?
