CHENNAI: Observing that the I-T department could not complain to initiate prosecution even after the assessee had paid the tax with interest, the Madras High Court dismissed a criminal case pending against the assessee which was pending before the economic offence court, Chennai.
“The suppression of material facts, the intentional suggestion of falsehood and non-application of mind goes to show that, this is a malicious prosecution initiated by the Income Tax authorities by abusing the power, ” Justice G Jayachandran observed on allowing criminal original petitions filed by AMK Solutions Private Limited and its directors Noorjahan and Mohammed Zahirudeen.
The petitioners prayed for a direction to quash the complaint filed by the I-T department to prosecute the petitioners under Section 276 C (2) of the Income Tax Act and the same is pending before the Additional Chief Metropolitan Magistrate / Economic Office Court (EOC), Egmore.
“The IT issued notice to pay the tax for 2017-2018 as per the declaration and returns filed by us. We have paid the tax with a delay of four and half months and remitted an amount of Rs.65,85,462 towards the tax and interest payable on February 15, 2018. However, the principal commissioner of IT had accorded the sanction on March 14, 2019, to complain to prosecute us on charges of evading tax, ” the petitioners submitted.
On recording the submissions, the judge held that the Principal Commissioner of IT has conspicuously omitted to record the fact of payment of the tax with interest except to record that, the tax was not paid within the time.
“When the malafide is patently manifested, the petitioners need not be forced to undergo the ordeal of a trial, which has no legs to stand, ” the judge said and quashed the case pending before the EOC.