The single bench of Kerala High Court has held in the case of M/S.Beaver Estates PVT.LTD and Another v. The Assistant Commissioner of Income Tax and Others, that the criminal proceedings under question must be stalled till the disposal of the appeal filed in the matter before the Commissioner of Income Tax.
The petitioners in the above cased moved to the High court of Kerala praying for stay of criminal proceedings until the disposal of appeals before the Commissioner of Income Tax. The petitioners argued that the Section 276(c)(1) of the Income Tax Act that criminalizes the wilful evasion of tax, interest etc payable under the Act is only applicable once the evasion is finalized. The petitioners further pointed out the current evasion is questionable and under consideration before the Commissioner. The petitioners relied on K.C. Builders v. Assistant Commissioner of Income Tax : (2004) 2 SCC 731 and Commissioner of Income Tax v. Bhupen Champak Lal Dalal: AIR 2001 SC 1096 to assert their point.
On the contrary, the respondents, quoted the judgments in the Sasi Enterprises v. Assistant Commissioner of Income Tax : (2014) 5 SCC 139, to point that pendency of the appellate proceedings is a not relevant factor for not initiating prosecution proceedings under Section 276CC of the Act. The learned judge, however, disallowed the contentions. The learned judge stated that “The decision in Sasi Enterprises (supra) has got no application to the present case because the prosecution against the petitioners is for committing the offence under Section 276C of the Act and not for the offence under Section 276CC of the Act”
Justice Narayana Pisharadi relying on the judgment of Bhupen Champak Lal Dalal allowed the petitioner and directed the Additional Chief Judicial Magistrate (Economic Offences), Ernakulam to keep in abeyance all further proceedings against the petitioners till the disposal of appeals before the commissioner.
Subscribe Taxscan Premium to view the Judgment
