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2019 (12) TMI 533 - HC - Income TaxProsecution proceedings - validity of sanction has been granted by Principal Director of Income Tax (PDIT) u/s 279 - Petition contended that, sanction has to be given only by Principal Commissioner who is heading the assessment wing - intent of the legislation - offence punishable under Sections 276 (C)(1), 277, 278 - escapement of the income tax in the middle of the financial year - The moot question which arise for consideration of the Court is that whether the proceedings initiated are going to vitiate the entire proceedings without concluding the adjudicatory proceedings under the Act. Held that:- No provision of the Income Tax Act provides that a prosecution for the offence cannot be launched until reassessment proceedings are initiated against the assessee and are completed. They are two different proceedings and it has also been the law laid down by the Hon'ble Apex Court that the finding in the adjudication proceedings are not binding in the Criminal Court or if adjudication proceedings are decided on merits without contravention to the criminal proceedings and on the similar proceedings if a criminal proceedings have been launched, then under such circumstances it can be said to be abuse of process of the Court. - the contention raised by the learned Senior counsels appearing for the petitioners is not having any force, the same is liable to be rejected. Under Article 13 of the Constitution of India, there also the interpretation of unless the context otherwise has been interpreted. "Law" has been defined and it includes any Ordinance, order, bye-law, rule, regulation, notification, custom or usage having in the territory of India, the force of Law. When the said Notification has been challenged and not yet finalized with regard to legality or otherwise, in that light, Notification dated 13.11.2014 as per Article 13 of the Constitution of India is having a force of law and by virtue of the said authority, if the sanction has been issued by the Principal Director of Commissioner, then under such circumstances, it cannot be held that he is not having any authority to issue the sanction order. While seeing the intention and otherwise of the enactment, subsequent notification, amendments, ordinance and other aspects have to be seen conjointly. They cannot be read independently. In that light, the contention taken up by the petitioners is not having any force. If the sanction is invalid on any of the grounds, then under such circumstances, sine-qua-non taking the cognizance of the offence itself is going to vitiate the entire proceedings. When the sanction order has been challenged on any other grounds and the only ground raised is that it has been issued by a non-competent authority and if by virtue of Notification any authority has been given, then under such circumstances it cannot be held that the sanction has not been granted by a proper and a competent authority. Though Section 279 of the Act starts with non-obstante clause, the said error or omission is not considered to be a illegality, but it will be only irregularity. If it is irregularity, then it will not amounts to failure of justice and even it has been observed by the Hon'ble Apex Court, subsequently the sanction can also be obtained for prosecuting the accused. Taking into consideration the above facts and circumstances as discussed above in detail, the petitioners-accused have been found escaping huge tax which is going to affect the economy of the country. Under such circumstances prima facie petitioners-accused have not made out any grounds so as to interfere with the order of the trial Court. The petitions are devoid of merits and the same are liable to be dismissed and accordingly they are dismissed.
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