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Tax Penalty Order Set Aside Results in Automatic Dismissal of Case U/S 276C(1)

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Tax Penalty Order Set Aside Results in Automatic Dismissal of Case U/S 276C(1)
Jharkhand HC's Order for Pralay Pal

In its latest ruling, the Jharkhand Excessive Court docket has furled that when a penalty order is overruled, it is going to be assumed that there was no concealment of earnings, ensuing within the computerized decline of prosecution below Part 276C(1) of the Revenue Tax Act.

Justice Sanjay Kumar Dwivedi, in his judgment, highlights that based mostly on earlier rulings, it’s clear that when a penalty order is put aside, the presumption of no concealment happens, inflicting the automated dismissal of a penalty below Part 276C(1). The petitioner shouldn’t be subjected to a prison trial in such circumstances, because it lacks authorized grounds.

Learn Additionally: HC: Offences U/S 276CC In opposition to Assesses as Firm’s ITR Filed However Not Particular person

He additional famous that though penalty proceedings and prosecution can proceed concurrently in some circumstances, on this explicit case, the penalty proceedings had already been declared invalid attributable to an appellate order. Contemplating the aforementioned judgments, the petitioner’s case is deemed topic to dismissal. Furthermore, if the penalty proceedings have been put aside, it implies that the mandatory males’s rea factor of a prison offence is absent.

This ruling emerged from a petition requesting the termination of prison proceedings regarding C/2 Case No. 684 of 2016. The grievance was initiated by the second occasion (reverse occasion no.2), who argued that the petitioner had filed earnings tax returns for the Evaluation Yr 2011-12 on 31.07.2011, revealing an combination earnings of Rs. 18,83,940/-. The case was chosen for scrutiny below the Laptop Assisted Scrutiny Choice (CASS).

Following this, the Deputy Commissioner of Revenue Tax in Jamshedpur issued an evaluation order below Part 143(3) of the Revenue Tax Act on September 13, 2013, revealing a complete earnings of Rs. 20,66,090/-. This evaluation included three additions: Rs. 1,64,695/- for unrevealed curiosity earnings from Nationwide Saving Certificates, Rs. 4,351/- for unrevealed financial institution curiosity, and Rs. 13,100/- for unrevealed curiosity on Fastened Deposits with Telco Ltd.

The allegation towards the petitioner was that they deliberately hid earnings amounting to Rs. 1,82,146 and offered inaccurate data, resulting in proceedings below Part 271(1)(c) of the Revenue Tax Act. The penalty was affirmed by the Commissioner of Revenue Tax (Attraction) in Jamshedpur on November 27, 2015. The petitioner was accused of trying to evade tax legal responsibility by giving inaccurate earnings particulars, which has been thought of an act of earnings concealment.

The authorization to begin prosecution below Part 276C(1) of the Revenue Tax Act for the Evaluation Yr 2011-12 was granted by the Principal Commissioner of Revenue Tax in Jamshedpur on March 3, 2016. Nevertheless, a clerical error within the authorization order was rectified by the Principal Commissioner of Revenue Tax on March 21, 2016.

In its ruling, the Jharkhand Excessive Court docket noticed that penalty proceedings and prosecution can coexist, however on this explicit case, the penalty proceedings had already been overruled attributable to an appellate order. Consequently, the Court docket concluded that the petitioner’s case merited allowance, because the setting apart of the penalty order indicated an absence of concealment.

To summarize, the Jharkhand Excessive Court docket dismissed all prison proceedings in regards to the case C/2 Case No. 684 of 2016, together with the orders dated Could 30, 2016, and July 15, 2017. The petition in search of this motion was granted and subsequently resolved.

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