Challenging Summons Issued under Sections 277A (of Income Tax Act, 1961) and 278B of the Income Tax Act, 1961 - Disposal of Revisional Application

Case Name:

M/s Karan Kothari Jewellers Pvt. Ltd vs. State of West Bengal & Anr. (High Court of Calcutta)

Key Takeaways:

1. The revisional application challenged the proceedings of case no. C-799 of 2018 under Sections 277A (of Income Tax Act, 1961) and 278B of the Income Tax Act, 1961.

2. The petitioner challenged the issuance of summons without an enquiry being conducted under Section 202 (of Income Tax Act, 1961) of the Code of Criminal Procedure.

3. The opposite party no.2 argued that there was no necessity for examining the complainant and his witness as the complaint was filed by a senior officer of the Income Tax department.

4. The court disposed of the revisional application, stating that if the petitioner files an application under Section 305 (of Income Tax Act, 1961) of the Code of Criminal Procedure and is represented by a proper advocate, the learned court will allow the same.

5. It was observed that the warrant of arrest cannot be issued against an artificial person, and the learned Magistrate will apply the relevant provisions of law for compelling the appearance of an artificial person.

Case Synopsis:

The case “M/s Karan Kothari Jewellers Pvt. Ltd vs. State of West Bengal & Anr.” involves a revisional application (C.R.R. 674 (of Income Tax Rules, 1962) of 2021) challenging the proceedings of case no. C-799 of 2018 pending before the learned Judicial Magistrate, 2nd Court, Barasat under Sections 277A (of Income Tax Act, 1961) and 278B of the Income Tax Act, 1961. The petitioner, M/s Karan Kothari Jewellers Pvt. Ltd, challenged the issuance of summons without an enquiry being conducted under Section 202 (of Income Tax Act, 1961) of the Code of Criminal Procedure. The opposite party no.2, Principal Director of Income Tax (Investigation), argued that there was no necessity for examining the complainant and his witness as the complaint was filed by a senior officer of the Income Tax department. The court disposed of the revisional application, stating that if the petitioner files an application under Section 305 (of Income Tax Act, 1961) of the Code of Criminal Procedure and is represented by a proper advocate, the learned court will allow the same. It was also observed that the warrant of arrest cannot be issued against an artificial person, and the learned Magistrate will apply the relevant provisions of law for compelling the appearance of an artificial person.

The judgment was delivered by Justice Tirthankar Ghosh, who disposed of the revisional application (CRR 674 of 2021) with the following observations:

1. The petitioner’s contention was that the learned Magistrate issued summons without conducting an enquiry under Section 202 (of Income Tax Act, 1961) of the Code of Criminal Procedure, and thus, the order issuing process must be set aside.

2. The opposite party no.2, represented by Mr. Vipul Kundalia, argued that as the complaint was filed by a senior officer of the Income Tax department, there was no requirement for compliance with Section 202 (of Income Tax Act, 1961) of the Code of Criminal Procedure in this case.

3. The court observed that if the petitioner files an application under Section 305 (of Income Tax Act, 1961) of the Code of Criminal Procedure and is represented by a proper advocate, the learned court will allow the same.

4. It was noted that the petitioner, being an artificial person, cannot be issued a warrant of arrest, and the learned Magistrate will apply the relevant provisions of law for compelling the appearance of an artificial person.

The judgment also directed all parties to act on the server copy of the order downloaded from the official website of the Court and provided for the supply of an urgent photo state certified copy of the order to the parties upon compliance with all requisite formalities.

FAQ:

Q1: What was the main contention of the petitioner in the revisional application?

A1: The petitioner challenged the issuance of summons without an enquiry being conducted under Section 202 (of Income Tax Act, 1961) of the Code of Criminal Procedure.

This revisional application was preferred challenging the proceedings being case no. C-799 of 2018 pending before the learned Judicial Magistrate, 2nd Court, Barasat under Sections 277A (of Income Tax Act, 1961) and 278B of the Income Tax Act, 1961.

Learned advocate appearing for the petitioner submits that without any enquiry being conducted under Section 202 (of Income Tax Act, 1961) of the Code of Criminal Procedure, the learned Magistrate straightway issued summons and as such, the order issuing process must be set aside.

Mr. Kundalia, learned advocate appears for the opposite party no.2/Principal Director of Income Tax (investigation). The complaint was filed by the DDIT (inv) Unit 4(3) of the Income Tax department.

The proviso clause to Section 200 of the Code of Criminal Procedure states that if a public servant acting or purporting to act in the discharge of his official duties or a Court has made the complaint, there is no necessity for

examining the complainant and his witness. In this case, a senior officer of the Income Tax department is the complainant. That being the scenario, there is no requirement of compliance of Section 202 (of Income Tax Act, 1961) of the Code of Criminal Procedure in this case.

However, if the present petitioner files an application under Section 305 (of Income Tax Act, 1961) of the Code of Criminal Procedure and is represented by a proper advocate, the learned court in accordance with law will allow the same.

Attention of the Court has been drawn to the order dated 22.01.2021 wherein it reflects that next date was fixed for Execution Return of Warrant of Arrest. The petitioner happens to be the accused No.18 which is an artificial person and not a natural person. Consequently, the warrant of arrest cannot be issued.

The learned Magistrate will in the circumstances, if required, apply the relevant provisions of law for compelling the appearance of artificial person.

With the aforesaid observations, the revisional application being CRR 674 of 2021 is disposed of.

All pending connected applications, if any, are consequently disposed of.

All parties shall act on the server copy of this order duly downloaded from the official website of this Court.

Urgent photostat certified copy of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities.

(Tirthankar Ghosh, J.)