Mangaluru, Oct 24: The Principal District and Sessions Judge of Dakshina Kannda has passed an order setting aside the complaint filed by the Department of Income Tax before the Special (Economic Offences) Court against the partners of Hassan-based jewelry business partnership firm namely M/s Ramachandra Shetty and Sons and its partners namely Ravish, Rajath and Rahul for the offence punishable under section 276 CC of Income Tax Act, 1961 as illegal and consequently quashed the entire proceedings initiated before the Special Court by the Department of Income Tax.
The Department of Income Tax had launched prosecution in the year 2017 across the nation and as part of the same more than 3000 complaints have been filed at Bengaluru and nearly 300 complaints have been lodged before the Special Court dealing with economic offences.
In its complaint, the Deputy Commissioner of Income Tax had alleged that the partners of the Hassan based jewelers have willfully failed to file the return of income within the stipulated time and thereby committed an offence under section 276 C.C. of I.T. Act, 1961 which is punishable with seven years imprisonment.
The Special Court had taken cognizance of the offence and issued summons to the accused persons calling upon them to appear before the court and answer the accusations. However, the accused persons had challenged the said preliminary order of taking cognizance and issuance of process by the Magistrate before the Principal District and Sessions Judge in Mangaluru by way of preferring a Revision under section 397 and 399 of Cr.P.C (Code of Criminal Procedure).
After preliminary hearing, while admitting the criminal revisions, the Sessions Court had stayed the proceedings before the Special Court of Economic Offence and JMFC and issued notice to the Department of Income Tax. In response thereto, the Special Public Prosecutor had appeared for the department of I.T. and argued the matter justifying and the complaint and sought for dismissal of the Revision preferred by the accused persons.
Advocate Vivekananda Paniyala argued for the accused persons contending that the Department had failed to furnish copy of the documents, account books, and Tally and such other accounts related documents that were seized at the time of conducting raid [search and seizure] and failed to provide the copy of the same to the Assesses despite making repeated requests in writing and thereby prevented the accused persons from filing the return within the stipulated time. Further, Mr. Paniyala has argued that the Department of Income Tax has suppressed these material facts before the Special Court.
Another limb of argument was canvassed on behalf of the Accused person is that the Special Court, while taking cognizance and issuance of process has not recorded its satisfaction assigning reasons in support of its decision before issuing summons to the Accused Persons as laid down by the Supreme Court of India in the celebrated case of Sunil Barthi Mittal v. CBI. Hence, Mr. Paniyala has argued that not only the cognizance is to be set-aside, but also the entire impugned prosecution proceedings initiated by the I.T. Department should be quashed.
After a detailed hearing, the Sessions court has set-aside the issuance of summons by the Special Court and quashed the entire proceedings as illegal and not maintainable. This is considered to be a set-back for the prosecution launched by the Department of Income Tax. This matter has generated wide public interest and particularly taxation circle.Other cases are at different stages of disposal in the special court of Economic Offences and in some cases, trial has begun.
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