Immunity From Prosecution

Kothari & Sons & Others vs. Income-tax Officer

196 ITR 82 (Mad) (1992)

Whether an assessee who had filed an application before the Settlement Commission under section 245C of the Income-tax Act the terms of which include grant of immunity from prosecution u/s 245H of the Act and such application had been allowed to be proceeded with by the Settlement Commission u/s 245D of the Act, would still be liable for prosecution when the Settlement Commission had not passed final orders on the said application u/s 245D(4) of the Act.

It was held :
i) that where an assessee had filed an application before the Settlement Commission under section 245C of the Act the terms of which include grant of immunity from prosecution u/s 245H and such application had been allowed to be proceeded with by the Settlement Commission u/s 245D, till final orders u/s 245D(4) on the said application where rendered by the Settlement Commission, the prosecution could not be proceeded with, of course, subject to the proviso to section 245H(1) inserted with effect from June, 1987.

ii) that the prosecutions initiated even before the filing of applications before the Settlement Commission u/s 245C of the Act need not be quashed, but will have to be necessarily stayed pending final decision by the Settlement Commission u/s 245D(4) which included the power exercisable under section 245H either to grant or refuse immunity from prosecution.

[Top l Back]

Super Rubber Industries vs. DCIT

215 ITR 49 (Del) 1995

In this case application for settlement had been made in 1989 and admitted in 1991. Specific pleas had been raised in the application for grant of immunity from prosecution. Prosecution u/s 276C and 277 of the Income-tax Act, 1961 was launched for assessment year 1985-86 against which the petitioner moved the petition to the High Court.

It was held, that the Settlement Commission was under a statutory obligation to deal with these matters expeditiously and for non performance of its own obligations, the petitioner cannot be penalised. It was a fit case where the court must exercise its jurisdiction u/s 482 of the Code of Criminal Procedure. In the circumstances, the criminal proceedings had to be stayed till the decision was made by the Settlement Commission.

[Top l Back]

Ashirvad Enterprises vs St. of Bihar

232 ITR 220 (Pat)

Where application for settlement is accepted by the Settlement Commission but no express direction is given against prosecution, whether the CIT can accord sanction for prosecution.

The Patna High Court held that even though a case is admitted before the Settlement Commission and if there is no express direction by the Settlement Commission to the contrary, the provisions of section 279(1) which authorises the Income Tax Authority to grant sanction for prosecution, were not affected. In other words, the competent Income Tax Authority can go ahead with the grant of prosecution. It was also held that once a criminal prosecution has been validly instituted, no Income Tax Authority under the Act has the power to stay the proceedings before a Criminal Court.

Since, no Income Tax Authority under the Act has the authority to stay the criminal proceedings, the Settlement Commission has no such jurisdiction either exclusive or concurrent.

[Top l Back]