Section 276C(1)

Section 276C(1) — the law in short

What the courts have decided on section 276C(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• H.J. Siwani v Income Tax Department High CourtHelps departmentNo later treatment found
  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.
• Saumya Chaurasia v Union of India High CourtHelps departmentNo later treatment found
  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.
• Nagendra Choudhary v Union of India High CourtHelps taxpayer
  The Tribunal deleted the penalty, but the department has filed an appeal under s.260A and it has been admitted. Can they keep the s.276C prosecution alive until that appeal is decided?
  Not without a stay. The Rajasthan High Court quashed a s.276C(1)(i) prosecution after the Tribunal had deleted the s.271AAB penalty, holding that the mere pendency of the department's s.260A appeal, even one admitted on substantial questions of law, does not resurrect factual findings that have been set aside. The Court expressly preserved the department's liberty to seek revival if the Tribunal's exoneration is reversed.
• Raj Kumar Kedia v Income Tax Office High CourtHelps departmentNo later treatment found
  My prosecution sanction under s.279(1) was signed by the Principal Director of Income Tax (Investigation), not the Principal Commissioner. Is the sanction bad, and can I say the complaint is premature because no assessment has been made?
  Neither point succeeded. 'Commissioner' in s.279 is read with the definition in s.2(16) and the hierarchy in s.116, so it means and includes the Director and the Principal Director of Income Tax; a sanction by the Principal Director (Investigation) is by a competent authority under a different nomenclature. The complaint is not premature merely because assessment proceedings had not been completed, P. Jayappan being applied.
• Anurag Dalmia v Income Tax Office High CourtHelps taxpayerNo later treatment found
  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?
  No, where the complaint rests on the same material. The Delhi High Court quashed complaints under s.276C(1)(i), s.277(1) and s.276D, holding that once the Tribunal had set aside the additions on merits and the penalty had been cancelled, no offence survived and quashing of the prosecution followed automatically. It also held that the presumption of a guilty mind under s.278E arises only if a prima facie case is disclosed in the complaint.
• Anurag Bagaria v Income Tax Department High CourtHelps taxpayerNo later treatment found
  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?
  Not on those facts. The Karnataka High Court quashed the s.276C(1) prosecution, holding that a claim of deduction which the revenue does not accept is not by itself a wilful evasion of tax — an incorrect or erroneous claim can come from a wrong reading of the law. The department's special leave petition against that order was dismissed.
• Karti P. Chidambaram v Deputy Director of Income Tax (Investigation) High CourtHelps taxpayerUnder appeal
  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?
  On this judgment, no. Although the Deputy Director can launch a prosecution under s.279 and although P. Jayappan holds that a prosecution need not await the assessment, the Madras High Court held that this is so where the complaint rests on the assessee's own statements under s.132(4) and incriminating material seized from him; where the material is collected from third parties and the prosecution itself treats it as merely corroborative, the Department must wait for the Assessing Officer's finding, and a complaint launched in the meantime is premature. The revisions were allowed and the prosecution held not maintainable, with liberty to the Department to act after a finding under s.153.
• Manian Transports v S. Krishna Moorthy, Income-Tax Officer High CourtCuts both ways
  I filed revised returns voluntarily after the officer raised a query, they were accepted, and the reassessments were completed on that basis. Does that end the s.277 prosecution for the original returns?
  Not at the quashing stage. The Madras High Court held that the argument that the revised returns were filed after a discussion with the Income-tax Officer and were accepted, so no prosecution would arise, 'has to be necessarily negatived at this stage, for it will relate to the realm of appreciation of evidence to be brought on record'. It also held that s.277 is independent and not interlinked with s.276C, so the s.277 prosecution of the person who made the verification survives even where the s.276C charge falls away.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.