Fiscal Statute - The Legal Chamber

The Supreme Court quashed the prosecution under Section 276C(1) of the Income Tax Act, 1961, holding that its continuation after a conclusive settlement order granting immunity from penalty was an abuse of process. The Revenue's action was in blatant disregard of its own binding circulars which mandated prosecution only after penalty confirmation by the ITAT. Facts Of The Case: A search u/s 132 of the Income Tax Act, 1961, was conducted at the appellant's residence on 24.04.2016, leading to the seizure of unaccounted cash. Based on this, the Revenue initiated prosecution u/s 276C(1) for the Assessment Year 2017-2018, alleging a wilful attempt to evade tax. The appellant's petition before the High Court to quash these proceedings was dismissed. Subsequently, the appellant filed an...

The Supreme Court delivered a split verdict on the interplay between Sections 144C and 153 of the Income Tax Act, 1961. The key legal question was whether the detailed procedure and timelines under Section 144C for eligible assessees operate within or in addition to the limitation period prescribed under Sections 153 for passing assessment orders. The divergence of opinion led to the matter being referred to a larger bench for final determination. Facts Of The Case: The case involved several foreign companies, including Shelf Drilling Ron Tappmeyer Ltd., engaged in oil exploration in India. For Assessment Years 2014-15 and 2018-19, the companies filed returns declaring losses. Their cases were selected for scrutiny, and the Assessing Officers passed draft assessment orders ...

Tag: Fiscal Statute

Supreme Court: Prosecution Without Confirmed Penalty is Abuse of Process

Key Income Tax Ruling: Supreme Court Divided on Limitation Period Under Sections 144C & 153