The Income-tax Officer lodged a police complaint about false returns claiming refunds, the police filed a charge-sheet, and the Magistrate took cognizance of IPC offences. Can that be done without sanction under s.279 and a complaint by an authorised authority?
No, on this decision. Reading s.279 with s.280B together, an offence under Chapter XXII can be taken cognizance of only on a complaint made by an authority authorised in that behalf under the Act, after the previous sanction of the competent authority. A Magistrate cannot take cognizance on the basis of a final report submitted by the police, and cognizance so taken is without authority of law, so that continuation of the proceeding is an abuse of process.
Decided by the High Court (Hemant Chandangoudar J) on 2023-06-16, reported as NC: 2023:KHC-K:1155; Criminal Petition Nos. 200847 to 200858 and 200872 to 200878 of 2022 (High Court of Karnataka, Kalaburagi Bench). It bears on section 277, section 278, section 279, section 279A, section 280B of the Income Tax Act 1961, in Prosecution and Refunds, Interest & Condonation matters.
This is the one point in the prosecution chapter that goes to the very jurisdiction of the criminal court, and it is easy to miss when the Department has routed a false-return allegation through the police station rather than through a complaint. It matters in three practical ways: it means the police route cannot be used to bypass the s.279 sanction; it means the Special Court designated under s.280A takes cognizance only on a complaint by an authorised authority under s.280B; and it means that where the same facts have been recast as IPC offences of forgery and cheating, the framing of the case has to be examined before the merits are argued. Note that the Court also had before it the point that offences under the Act are non-cognizable under s.279A, which bears on the legality of the police investigation itself.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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An Income-tax Officer at Vijaypur lodged first information reports against the petitioner and two others alleging that they had filed false income-tax returns claiming refunds from the Department. The police registered the FIRs, investigated, and filed charge-sheets for offences under ss.109, 177, 192, 196, 417, 420, 463 and 464 read with s.34 of the Indian Penal Code, and the Magistrate took cognizance on the basis of the police final report. Before the FIRs were registered, the same officer had filed private complaints under s.200 CrPC before the jurisdictional Magistrate for offences under s.277 and s.278 of the Income-tax Act; the Magistrate had taken cognizance of those offences but later discharged the petitioner, taking into account that he was being simultaneously prosecuted under the IPC on the same transaction. The petitioner moved the High Court under s.482 CrPC in the connected petitions listed in the cause title, contending that the offences under s.277 and s.278 are triable only by the designated Special Court, that a Special Court can take cognizance only on a complaint by an authority authorised in that behalf under s.280B, that cognizance without sanction under s.279 is vitiated, and that the offences being non-cognizable under s.279A the police investigation and charge-sheet were contrary to s.156(3) CrPC.
The petitions were allowed and the criminal proceedings in each of the listed cases were quashed. On a conjoint reading of s.279 and s.280B, a court can take cognizance of an offence under Chapter XXII only upon a complaint made by an officer authorised in that behalf and only after the previous sanction of the competent authority; cognizance taken by the Magistrate on the basis of the final report submitted by the police is without authority of law, and continuation of the criminal proceeding would be an abuse of the process of law.
The Court set out s.277, s.278, s.279 and s.280B and reasoned that s.279 makes previous sanction of the Principal Commissioner or Commissioner or Joint Commissioner (Appeals) or Commissioner (Appeals) or the appropriate authority a condition of proceeding against a person for the enumerated offences, and that s.280B provides both that offences punishable under the chapter are triable only by the Special Court where so designated and that a Special Court may take cognizance upon a complaint made by an authority authorised in that behalf under the Act. Reading the two together, cognizance can rest only on such a complaint preceded by sanction, and not on a police final report. Since that is how the Magistrate had proceeded, the cognizance was without authority of law and the continuation of the proceedings was an abuse of process.
the cognizance taken by the learned Magistrate on the basis of the final report submitted by the police is one without authority of law.
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Handle my notice → Ask a CA on WhatsAppNo, on this decision. Reading s.279 with s.280B together, an offence under Chapter XXII can be taken cognizance of only on a complaint made by an authority authorised in that behalf under the Act, after the previous sanction of the competent authority. A Magistrate cannot take cognizance on the basis of a final report submitted by the police, and cognizance so taken is without authority of law, so that continuation of the proceeding is an abuse of process. This was decided by the High Court (Hemant Chandangoudar J) and bears on section 277, section 278, section 279, section 279A, section 280B of the Income Tax Act 1961. It is reported as NC: 2023:KHC-K:1155; Criminal Petition Nos. 200847 to 200858 and 200872 to 200878 of 2022 (High Court of Karnataka, Kalaburagi Bench). This is the one point in the prosecution chapter that goes to the very jurisdiction of the criminal court, and it is easy to miss when the Department has routed a false-return allegation through the police station rather than through a complaint. It matters in three practical ways: it means the police route cannot be used to bypass the s.279 sanction; it means the Special Court designated under s.280A takes cognizance only on a complaint by an authorised authority under s.280B; and it means that where the same facts have been recast as IPC offences of forgery and cheating, the framing of the case has to be examined before the merits are argued. Note that the Court also had before it the point that offences under the Act are non-cognizable under s.279A, which bears on the legality of the police investigation itself. If it applies to you, the first step is this: Ask first how the criminal court was seized: a complaint by an authorised income-tax authority, or a police final report under s.173 CrPC. If it is the latter, the jurisdictional objection comes before everything else.
An Income-tax Officer at Vijaypur lodged first information reports against the petitioner and two others alleging that they had filed false income-tax returns claiming refunds from the Department. The police registered the FIRs, investigated, and filed charge-sheets for offences under ss.109, 177, 192, 196, 417, 420, 463 and 464 read with s.34 of the Indian Penal Code, and the Magistrate took cognizance on the basis of the police final report. Before the FIRs were registered, the same officer had filed private complaints under s.200 CrPC before the jurisdictional Magistrate for offences under s.277 and s.278 of the Income-tax Act; the Magistrate had taken cognizance of those offences but later discharged the petitioner, taking into account that he was being simultaneously prosecuted under the IPC on the same transaction. The petitioner moved the High Court under s.482 CrPC in the connected petitions listed in the cause title, contending that the offences under s.277 and s.278 are triable only by the designated Special Court, that a Special Court can take cognizance only on a complaint by an authority authorised in that behalf under s.280B, that cognizance without sanction under s.279 is vitiated, and that the offences being non-cognizable under s.279A the police investigation and charge-sheet were contrary to s.156(3) CrPC. The matter was decided on 2023-06-16 by the High Court (Hemant Chandangoudar J). On those facts the High Court held as follows. The petitions were allowed and the criminal proceedings in each of the listed cases were quashed. On a conjoint reading of s.279 and s.280B, a court can take cognizance of an offence under Chapter XXII only upon a complaint made by an officer authorised in that behalf and only after the previous sanction of the competent authority; cognizance taken by the Magistrate on the basis of the final report submitted by the police is without authority of law, and continuation of the criminal proceeding would be an abuse of the process of law.
The Court set out s.277, s.278, s.279 and s.280B and reasoned that s.279 makes previous sanction of the Principal Commissioner or Commissioner or Joint Commissioner (Appeals) or Commissioner (Appeals) or the appropriate authority a condition of proceeding against a person for the enumerated offences, and that s.280B provides both that offences punishable under the chapter are triable only by the Special Court where so designated and that a Special Court may take cognizance upon a complaint made by an authority authorised in that behalf under the Act. Reading the two together, cognizance can rest only on such a complaint preceded by sanction, and not on a police final report. Since that is how the Magistrate had proceeded, the cognizance was without authority of law and the continuation of the proceedings was an abuse of process. In the words reproduced by the source cited on this page: "the cognizance taken by the learned Magistrate on the basis of the final report submitted by the police is one without authority of law." The decision followed or applied Sharat Babu Digumarti v. Government of NCT of Delhi (2017 ACR 231) — relied on by the petitioner.
It was decided by the High Court on 2023-06-16 and is reported as NC: 2023:KHC-K:1155; Criminal Petition Nos. 200847 to 200858 and 200872 to 200878 of 2022 (High Court of Karnataka, Kalaburagi Bench). 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 277, section 278, section 279, section 279A, section 280B, 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 taxpayer. The petitions were allowed and the criminal proceedings in each of the listed cases were quashed. On a conjoint reading of s.279 and s.280B, a court can take cognizance of an offence under Chapter XXII only upon a complaint made by an officer authorised in that behalf and only after the previous sanction of the competent authority; cognizance taken by the Magistrate on the basis of the final report submitted by the police is without authority of law, and continuation of the criminal proceeding would be an abuse of the process of law. It arises in Prosecution and Refunds, Interest & Condonation matters, on section 277, section 278, section 279, section 279A, section 280B of the Income Tax Act 1961, and was decided by Hemant Chandangoudar 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. Call for the sanction under s.279(1) and check the authority who granted it and the offences it covers. Check whether the offences are triable by a Special Court designated under s.280A, and whether that court took cognizance on a complaint by an authority authorised in that behalf as s.280B requires. Where the same facts have also been charged as IPC offences, examine whether the IPC case is in substance the income-tax offence in another dress, and whether an earlier complaint on the same transaction was filed and how it ended. Take s.279A into account: the Court had before it the submission that the offences being non-cognizable under s.279A, the investigation and charge-sheet were vitiated for non-compliance with s.156(3) CrPC — run that point alongside the s.280B objection, not instead of it.
Validity check could not be completed. Validity check could not be completed. No search for an appeal or for later treatment was carried out on this pass. The entry is written from a structured rendering of the judgment rather than its raw text, with only the concluding sentence of para 15 verified verbatim; a later pass should retrieve the raw text before this is relied on for anything beyond the holding stated. 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 fetches of this order in print view, across two passes, returned a structured rendering of the judgment rather than its raw text. The raw text is nevertheless reachable through the site's document-fragment view, and on the verification pass paragraphs 7, 11, 12, 13, 14 and 15 were retrieved in raw form and confirmed: para 7 records counsel's submissions including reliance on Sharat Babu Digumarti and the s.279A non-cognizability point, para 11 reproduces ss.277, 278, 279 and 280B, para 12 deals with s.279, para 13 with s.280B, para 14 with the conjoint reading, and para 15 with the conclusion quoted below. Those statutory extracts are not reproduced here as statutory text. The judgment's own para 14 refers to 'final report submitted by the police under Section 178 of Cr.PC' where s.173 CrPC is meant; that slip is the judgment's, not a rendering artefact, and an earlier passage in the same judgment cites s.173(2) correctly. The cause title lists Criminal Petitions Nos. 200847 to 200858 and 200872 to 200878 of 2022, which is nineteen petitions, while one rendering of the order describes eighteen; the count was not settled from raw text and no number is asserted. The date of the order, 16 June 2023, is taken from indiankanoon's index and from consistent renderings; it could not be confirmed from the document's own header on either pass, and given that this project has already found one judgment indexed under the wrong date, it should be confirmed before the entry is marked verified. 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 petitions were allowed and the criminal proceedings in each of the listed cases were quashed. On a conjoint reading of s.279 and s.280B, a court can take cognizance of an offence under Chapter XXII only upon a complaint made by an officer authorised in that behalf and only after the previous sanction of the competent authority; cognizance taken by the Magistrate on the basis of the final report submitted by the police is without authority of law, and continuation of the criminal proceeding would be an abuse of the process of law.
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