However, they had neither disclosed the same in their assessment nor paid taxes for the income.
Hence, the I-T department initiated criminal prosecution for alleged non-disclosure of income by them to the tune of Rs 7.73 crore for 2015-16 fiscal.
Challenging the same, the duo contended that the prosecution is liable to be quashed for procedural lapse.
They argued that the prosecution has been initiated for filing of false return, which amounts to offence of giving false evidence before a court under the Indian Penal Code.
As per the Income Tax Act, the proceedings of the assessing officer are deemed to be that of a proceeding of a civil court and therefore, only the assessing officer should have initiated the prosecution.
But in this case, a deputy director of investigation of the department has initiated the prosecution, they claimed.
Granting liberty to the department to initiate penal action as per law, if it chooses to, Justice N Sathish Kumar said, the prosecution launched by the Deputy Director is not maintainable.
The present complaint lodged by the prosecution is a premature one.
If the assessing officer comes to the conclusion in proceedings under Section 153 of the Income Tax Act, it is open to the Department to initiate penal action as per law.
Justice Sathish Kumar, who pronounced the order on Friday, observed that unless a finding is recorded by the assessing officer as to a willful attempt to evade tax or filing false verification, the complaint filed by the Deputy Director is not maintainable.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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