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2011 (6) TMI 617 - HC - Wealth-taxSanction for initiation of criminal proceedings - Prosecution - non filing of Wealth Tax return for the Assessment Year 1993-94 – Held that:- It has been repeatedly held that the requirement of getting a sanction order for prosecution is not an empty formality and any vital defect or infirmity in the sanction order will go to the root of the criminal proceedings itself, since such a protection given will be meaningless, if a person is to endure the ordeal of facing the trial and wait till the end of the trial to show that the sanction order is defective, infirm and the proceedings initiated on the basis of the sanction order is vitiated. For the above said reasons, this court is inclined to accept the contention of the learned counsel for the petitioner that the learned trial judge ought to have considered the above said aspect and decided the said question in favour of the petitioner. The failure on the part of the petitioner to file the wealth tax return in time was not wilful and only a wilful failure to file the return shall be a punishable offence under section 35-B of the Act and that this aspect was not at all considered by the sanctioning authority. Prosecution starts when the complaint or final report, in case of a police case is taken on file by the court. Here the prosecution has been sought to be initiated by a complaint in writing, as required by the provisions of the Act. According sanction for prosecution has to precede the launching of prosecution. Therefore, there is no question of applying the presumption at the time of considering "whether sanction has to be accorded or not?". petitioner had legal advice even from one of the retired judges of the Supreme Court that the tax liabilities of the previous years can be deducted to find out the net taxable wealth. - the cumulative effect of all the above said aspects will go to justify the stand taken by the petitioner that failure to submit the return within the time allowed by the statute was not wilful. Regarding continuing offence - the failure to submit a return within a time has led to the assessment of the wealth tax to the best of the judgment of the Assessing Officer. After such an assessment, there is no question of the assessee filing a return. In such cases, only for the escaped assets, further particulars can be called for and consequential prosecution can be made under other provisions of the Act and not for the offence under section 35-B of the Wealth Tax Act, 1957. The petitioner has clearly established a case for discharge and the court below has committed an error in rejecting the contention of the petitioner that she is entitled to discharge. Before parting with the case, this court wants to make it on record that, the implementation of the Tax Legislation should be tax payers friendly and at the same time the tax evaders should not be spared. Had the sanctioning authority approached the case, keeping the same in his mind, the sanctioning authority would not have granted sanction for prosecuting the petitioner under section 35-B of the Act.
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