Monday, February 26, 2024

Tax evasion case: Supreme Court issues notice on plea by Income Tax against Congress leader DK Shivakumar

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The Supreme Court on Monday issued notice on a petition filed by the Income Tax Department, challenging the Karnataka High Court’s dismissal of plea against Congress leader D.K. Shivakumar, in connection with cases related to tax evasion.

The Bench headed by Justice Sanjiv Khanna also ordered an interim stay on the observations recorded by the Karnataka High Court in the impugned judgement under Section 280b of the Income Tax Act and the power of the Special Court to take cognisance of criminal complaint made by an officer.

The Apex Court further gave liberty to the petitioner to file a fresh prosecution in the case.

It directed notice to be returned in six weeks and ordered filing of counter in four weeks and thereafter, rejoinder in two weeks.

Appearing before the Bench, Senior Advocate Mukul Rohatgi said, “Your lordships may set it aside, but please hear me,… if I have been assessed.”

Justice Khanna observed that Sections 277 and 276b are concerned.

Senior Advocate Aryama Sundaram then said that they have not been proceeded with under 277.

Rohatgi replied that they have been given liberty, so what was the problem.

Justice Khanna said that once Rohatgi filed a return, his client will escape.

Rohatgi replied that they can levy any penalty, since it was not res judicata.

The Bench then noted that it will have to set aside some findings and will examine other contentions on merit.

When Rohatgi said that liberty has given in the order for reassessment, Justice Khanna replied that there was a difference between false disclosure and entry

Sundaram said that there has to be a positive concealment.

Many times, they just give notice and do not prosecute. Section 132(5) has been repealed, he added.

To this, Rohatgi said that in the original scheme, the searching income himself assessed the evaded income. That was not there anymore.

The Court then observed that if the prosecution complaint is filed even before search, then the assessing officer becomes part of the prosecution. It asked whether he give his statement or not?

Sundaram replied that this was an interesting question, which he had not considered. Additional Solicitor General N Venkatraman nodded to the same.

Rohatgi requested the Court to tag the matter, else he would have to come to th court again.

Sundaram said that they have already lost a year.

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