Crl.p/101368/2019 Of Smt.dhanashree Ravindra Pandit v. The Income Tax Department

IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 07 DAY OF JUNE, 2024 BEFORE R THE HON'BLE MR. JUSTICE M. NAGAPRASANNA CRIMINAL PETITION No.101368 OF 2019 C/W CRIMINAL PETITION No.101369 OF 2019CRIMINAL PETITION No.101370 OF 2019CRIMINAL PETITION No.101371 OF 2019CRIMINAL PETITION No.101372 OF 2019CRIMINAL PETITION No.101373 OF 2019CRIMINAL PETITION No.101374 OF 2019CRIMINAL PETITION No.101375 OF 2019 IN CRIMINAL PETITION No.101368 OF 2019 BETWEEN: SMT. DHANASHREE RAVINDRA PANDIT W/O RAVINDRA PANDIT AGE: 51 YEARS, OCC: BUSINESS R/O: 146 MADHUGANDH GIRNAR HILLS, TILAKAWADI BELAGAVI KARNATAKA – 590 006. (BY SRI SANGRAM S.KULKARNI, ADVOCATE) ... PETITIONER AND: THE INCOME TAX DEPARTMENT REP. BY ITS DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION) UNIT 1, BELAGAVI SHRI CHETAN D.KALAMKAR AGE: ABOUT 30 YEARS, OCC: SERVICE R/O: SADASHIV NAGAR BELAGAVI – 590 003. (BY SRI Y.V.RAVIRAJ, ADVOCATE AND SRI TULAJAPPA KALABURGI, ADVOCATE) ... RESPONDENT THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.242/2019 PENDING BEFORE THE JMFC IV-COURT, BELAGAVI, AGAINST THE PETITIONER FOR THE OFFENCES P/U/S 50 OF THE BM ACT & IT ACT, 2015. IN CRIMINAL PETITION No.101369 OF 2019 BETWEEN: SMT. DHANASHREE RAVINDRA PANDIT W/O RAVINDRA PANDIT AGE: 51 YEARS, OCC: BUSINESS R/O: 146 MADHUGANDH GIRNAR HILLS, TILAKAWADI BELAGAVI, KARNATAKA – 590 006. (BY SRI SANGRAM S.KULKARNI, ADVOCATE) ... PETITIONER AND: THE INCOME TAX DEPARTMENT REP. BY ITS DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION) UNIT 1, BELAGAVI SHRI CHETAN D.KALAMKAR AGE: ABOUT 30 YEARS, OCC: SERVICE R/O: SADASHIV NAGAR BELAGAVI – 590 003. (BY SRI Y.V.RAVIRAJ, ADVOCATE AND ... RESPONDENT SRI TULAJAPPA KALABURGI, ADVOCATE) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.243/2019 PENDING BEFORE THE JMFC IV-COURT, BELAGAVI, AGAINST THE PETITIONER FOR THE OFFENCES P/U/S 50 OF THE BM ACT & IT ACT, 2015. IN CRIMINAL PETITION No.101370 OF 2019 BETWEEN: SMT. MANGAL ARVIND GOGTE W/O ARVIND GOGTE AGE: 71 YEARS, OCC: BUSINESS R/O: 146 MADHUGANDH GIRNAR HILLS, TILAKAWADI BELAGAVI, KARNATAKA – 590 006. (BY SRI SANGRAM S.KULKARNI, ADVOCATE) ... PETITIONER AND: THE INCOME TAX DEPARTMENT REP. BY ITS DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION) UNIT 1, BELAGAVI SHRI CHETAN D.KALAMKAR AGE: ABOUT 30 YEARS, OCC: SERVICE R/O SADASHIV NAGAR, BELAGAVI – 590 003. ... RESPONDENT (BY SRI Y.V.RAVIRAJ, ADVOCATE AND SRI TULAJAPPA KALABURGI, ADVOCATE) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.246/2019 PENDING BEFORE THE JMFC IV-COURT, BELAGAVI, AGAINST THE PETITIONER FOR THE OFFENCES P/U/S 50 OF THE BM ACT & IT ACT, 2015. IN CRIMINAL PETITION No.101371 OF 2019 BETWEEN: SMT. MANGAL ARVIND GOGTE W/O ARVIND GOGTE AGE: 71 YEARS, OCC: BUSINESS R/O: 146 MADHUGANDH GIRNAR HILLS, VADGAO ROAD, HINDWADI BELAGAVI, KARNATAKA – 590 006. ... PETITIONER (BY SRI SANGRAM S.KULKARNI, ADVOCATE) AND: THE INCOME TAX DEPARTMENT REP. BY ITS DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION) UNIT 1, BELAGAVI SHRI CHETAN D.KALAMKAR AGE: ABOUT 30 YEARS, OCC: SERVICE R/O SADASHIV NAGAR, BELAGAVI – 590 003. ... RESPONDENT (BY SRI Y.V.RAVIRAJ, ADVOCATE AND SRI TULAJAPPA KALABURGI, ADVOCATE) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.239/2019 PENDING BEFORE THE JMFC IV-COURT, BELAGAVI, AGAINST THE PETITIONER FOR THE OFFENCES P/U/S 50 OF THE BM ACT & IT ACT, 2015. IN CRIMINAL PETITION No.101372 OF 2019 BETWEEN: SHRI ARVIND BALKRISHNA GOGTE S/O BALKRISHNA GOGTE AGE: 75 YEARS, OCC: BUSINESS R/O: 146, MADHUGANDH GIRNAR HILLS, TILAKWADI BELAGAVI, KARNATAKA – 590 006. AND: THE INCOME TAX DEPARTMENT REP. BY ITS DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION) UNIT 1, BELAGAVI SHRI CHETAN D.KALAMKAR AGE: ABOUT 30 YEARS, OCC: SERVICE R/O SADASHIV NAGAR, BELAGAVI – 590 003. ... RESPONDENT (BY SRI Y.V.RAVIRAJ, ADVOCATE AND SRI TULAJAPPA KALABURGI, ADVOCATE) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.239/2019 PENDING BEFORE THE JMFC IV-COURT, BELAGAVI, AGAINST THE PETITIONER FOR THE OFFENCES P/U/S 50 OF THE BM ACT & IT ACT, 2015. IN CRIMINAL PETITION No.101372 OF 2019 BETWEEN: SHRI ARVIND BALKRISHNA GOGTE S/O BALKRISHNA GOGTE AGE: 75 YEARS, OCC: BUSINESS R/O: 146, MADHUGANDH GIRNAR HILLS, TILAKWADI BELAGAVI, KARNATAKA – 590 006. (BY SRI SANGRAM S.KULKARNI, ADVOCATE) ... PETITIONER AND: THE INCOME TAX DEPARTMENT REP. BY ITS DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION) UNIT 1, BELAGAVI SHRI CHETAN D.KALAMKAR AGE: ABOUT 30 YEARS, OCC: SERVICE, R/O SADASHIV NAGAR, BELAGAVI – 590 003. ... RESPONDENT (BY SRI Y.V.RAVIRAJ, ADVOCATE AND SRI TULAJAPPA KALABURGI, ADVOCATE) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.241/2019 PENDING BEFORE THE JMFC IV-COURT, BELAGAVI, AGAINST THE PETITIONER FOR THE OFFENCES P/U/S 50 OF THE BM ACT & IT ACT, 2015. IN CRIMINAL PETITION No.101373 OF 2019 BETWEEN: SHRI ARVIND BALKRISHNA GOGTE S/O BALKRISHNA GOGTE AGE: 75 YEARS, OCC: BUSINESS R/O: 146, MADHUGANDH GIRNAR HILLS, TILAKWADI BELAGAVI, KARNATAKA – 590 006. (BY SRI SANGRAM S.KULKARNI, ADVOCATE) ... PETITIONER AND: THE INCOME TAX DEPARTMENT REP. BY ITS DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION) UNIT 1, BELAGAVI SHRI CHETAN D.KALAMKAR AGE: ABOUT 30 YEARS, OCC: SERVICE R/O SADASHIV NAGAR, BELAGAVI – 590 003. ... RESPONDENT (BY SRI Y.V.RAVIRAJ, ADVOCATE AND SRI TULAJAPPA KALABURGI, ADVOCATE) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.245/2019 PENDING BEFORE THE JMFC IV-COURT, BELAGAVI, AGAINST THE PETITIONER FOR THE OFFENCES P/U/S 50 OF THE BM ACT & IT ACT, 2015. IN CRIMINAL PETITION No.101374 OF 2019BETWEEN: SHRI MADHAV ARAVIND GOGTE S/O ARVIND GOGTE AGE: 47 YEARS, OCC: BUSINESS R/O: 146 MADHUGANDH GIRNAR HILLS, TILAKAWADI BELAGAVI, KARNATAKA – 590 006. (BY SRI SANGRAM S.KULKARNI, ADVOCATE) ... PETITIONER AND: THE INCOME TAX DEPARTMENT REP. BY ITS DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION) UNIT 1, BELAGAVI SHRI CHETAN D.KALAMKAR AGE: ABOUT 30 YEARS, OCC: SERVICE R/O: SADASHIV NAGAR BELAGAVI – 590 003. (BY SRI Y.V.RAVIRAJ, ADVOCATE AND SRI TULAJAPPA KALABURGI, ADVOCATE) ... RESPONDENT THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.244/2019 PENDING BEFORE THE JMFC IV-COURT, BELAGAVI, AGAINST THE PETITIONER FOR THE OFFENCES P/U/S 50 OF THE BM ACT & IT ACT, 2015. IN CRIMINAL PETITION No.101375 OF 2019 BETWEEN: SHRI MADHAV ARVIND GOGTE S/O ARVIND GOGTE AGE: 47 YEARS, OCC: BUSINESS R/O: 146 MADHUGANDH GIRNAR HILLS, TILAKAWADI BELAGAVI, KARNATAKA – 590 006. (BY SRI SANGRAM S.KULKARNI, ADVOCATE) ... PETITIONER AND: THE INCOME TAX DEPARTMENT REP. BY ITS DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION) UNIT 1, BELAGAVI SHRI CHETAN D.KALAMKAR, AGE: ABOUT 30 YEARS, OCC: SERVICE R/O SADASHIV NAGAR, BELAGAVI – 590 003 ... RESPONDENT (BY SRI Y.V.RAVIRAJ, ADVOCATE AND SRI TULAJAPPA KALABURGI, ADVOCATE) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.240/2019 PENDING BEFORE THE JMFC IV-COURT, BELAGAVI, AGAINST THE PETITIONER FOR THE OFFENCES P/U/S 50 OF THE BM ACT & IT ACT, 2015. THESE CRIMINAL PETITIONS HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 10.10.2023, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:- (BY SRI SANGRAM S.KULKARNI, ADVOCATE) ... PETITIONER AND: THE INCOME TAX DEPARTMENT REP. BY ITS DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION) UNIT 1, BELAGAVI SHRI CHETAN D.KALAMKAR, AGE: ABOUT 30 YEARS, OCC: SERVICE R/O SADASHIV NAGAR, BELAGAVI – 590 003 ... RESPONDENT (BY SRI Y.V.RAVIRAJ, ADVOCATE AND SRI TULAJAPPA KALABURGI, ADVOCATE) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.240/2019 PENDING BEFORE THE JMFC IV-COURT, BELAGAVI, AGAINST THE PETITIONER FOR THE OFFENCES P/U/S 50 OF THE BM ACT & IT ACT, 2015. THESE CRIMINAL PETITIONS HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 10.10.2023, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:- ORDER Conglomeration of these cases call in question proceedings in different criminal cases all for the offence punishable under Section 50 of the Black Money (Undisclosed Foreign Income and Assets) Imposition of Tax Act, 2015 (hereinafter referred to as ‘the Act’ for short). The petitioners, in all these cases, are office bearers of certain business establishments who have been charged with the allegation of violation of the provisions of the Act. For the sake of convenience, the facts obtaining in Criminal Petition No.101368 of 2019, which are common to all the other petitions, would be noticed. 2. Heard Sri Sangram S. Kulkarni, learned counsel appearing for the petitioners and Sri Y.V. Raviraj, learned counsel appearing for the respondent. 3. Facts adumbrated are as follows:- During the financial year 2007-08 and in specific on 17-03-2008 Gleaming Snow Worldwide Limited was incorporated as a British Virgin Island (‘BVI’) Company. On 12-05-2009 Oriental Success Universal Corporation (‘Corporation’ for short) gets incorporated as a BVI Company. On 12-06-2009 bank account of Oriental Success Universal Corporation is opened in UBS, Singapore. The bank account opening form submitted by the Corporation included ‘Know Your Customer’ documents and declaration of beneficial owner’s identity in terms of laws prevailing in Singapore. The Gleaming Snow Worldwide Limited which was incorporated on 17-03-2008 is struck off at BVI. On 2 dates in the financial year 2010-11 i.e., on 08-01-2010 and 16.03.2010 an amount of US$16,000 and US$40,000 is credited to the Corporation’s account. After the closure of the financial year, the bank account with UBS, Singapore is closed. The Corporation also gets struck off at BVI on 02-11-2010. 4. Government of India brings in the Act on 01-04-2016. After coming into force of the Act, a notification is issued by Government of India on 14-03-2018 declaring the officer at Panaji, Goa to be the Assessing Officer for the purpose of the Act. The Assessing Officer on 26-03-2018 issues summons to petitioners invoking Section 8 of the Act. The petitioners are all members of one and the same family. On 09-04-2018 one of the petitioners tenders oral deposition before the respondent who was declared to be the Assessing Officer under the Act. On 25-06-2018 assessment proceedings under the Act are commenced by issuance of a notice under Section 10(1) of the Act for the financial year 2018-19 and assessment year 2019-20. 5. After about six months of commencement of proceedings, two show cause notices are issued by the respondent seeking to show cause as to why prosecution should not be initiated against all the petitioners under Sections 50 and 52 of the Act. The petitioners submit their interim reply on 21.02.2019 and additional reply on 5. After about six months of commencement of proceedings, two show cause notices are issued by the respondent seeking to show cause as to why prosecution should not be initiated against all the petitioners under Sections 50 and 52 of the Act. The petitioners submit their interim reply on 21.02.2019 and additional reply on 14-03-2019. The Competent Authority then grants sanction to prosecute the petitioners for the offences under the Act. After obtaining such sanction, two complaints come to be registered before the IV Additional Judicial Magistrate First Class, Belagavi under Section 200 of the CrPC alleging offences punishable under Sections 50 and 52 of the Act. The registration of criminal case on the complaint filed by the authorized officer is what has driven the petitioners to this Court in the subject petition. Similar pleadings and similar circumstances form the fulcrum of the companion petitions and except the number of registration of criminal cases being different, all other legal contentions and facts are similar to the one being noticed. 6. The learned counsel appearing for the petitioners would vehemently contend that the Companies against whom the proceedings are sought to be initiated under the Act had been closed and struck off way back in the year 2010 long before coming into force of the Act and the Companies are not in existence from 2011 itself. The petitioners were only Directors of the said Companies and not the share holders. Therefore, for a law that comes after the closer of Companies the petitioners cannot be hauled into the web of crime. He would submit that Article 20 of the Constitution of India provides that a person can be proceeded against only for any violation of law at the time of commission of offence and not any law that would come in future. The allegations levelled against the petitioners do not constitute an offence under Sections 50 or 52 of the Act. The Income Tax Act which governed the petitioners at the relevant point in time does not allege any violation of the said Act. Therefore, a post-facto law cannot be made applicable to the petitioners alleging violation of the Act. He would emphasize on the fact that admittedly the allegations pertained to the year 2009-10 and the Act has come into force in the year 2016 and, therefore, the entire proceedings are without jurisdiction. 7. On the other hand, the learned counsel representing the respondent Sri Y.V. Raviraj would seek to defend the action on the score that Section 72 of the Act is retrospective in operation and, therefore, proceedings under Section 72(c) of the Act can be initiated under the Act even if the offences are committed prior to the coming into force of the Act. He would draw his entire sustenance on Section 72(c) of the Act. He would submit that it is a matter of investigation and the funds parked outside the country should be brought back to the country and, therefore, would seek dismissal of the petitions and continuance of proceedings against the petitioners. 8. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record. In furtherance whereof, the issue that falls for my consideration is, “Whether the proceedings instituted against the petitioners under the Act for the alleged offences are tenable in law? 9. Before embarking upon consideration of facts of the case, I deem it appropriate to notice the objects and reasons behind the enactment and the provisions of the Act insofar as they are germane. The objects and reasons to bring in the subject Act are as follows:- An Act to make provisions to deal with the problem of the Black money that is undisclosed foreign income and assets, the procedure for dealing with such income and assets and to provide for imposition of tax on any undisclosed foreign income and asset held outside India and for matters connected therewith or incidental thereto Be it enacted by Parliament in the Sixty-sixth Year of the Republic of India as follows:— 9. Before embarking upon consideration of facts of the case, I deem it appropriate to notice the objects and reasons behind the enactment and the provisions of the Act insofar as they are germane. The objects and reasons to bring in the subject Act are as follows:- An Act to make provisions to deal with the problem of the Black money that is undisclosed foreign income and assets, the procedure for dealing with such income and assets and to provide for imposition of tax on any undisclosed foreign income and asset held outside India and for matters connected therewith or incidental thereto Be it enacted by Parliament in the Sixty-sixth Year of the Republic of India as follows:— Statement of Objects and Reasons.—Stashing away of black money abroad by some people with intent to evade taxes has been a matter of deep concern to the nation. ‘Black Money’ is a common expression used in reference to tax-evaded income. Evasion of tax robs the nation of critical resources necessary to undertake programs for social inclusion and economic development. It also puts a disproportionate burden on the honest taxpayers as they have to bear the brunt of higher taxes to make up for the revenue leakage caused by evasion. The money stashed away abroad by evading tax could also be used in ways which could threaten the national security.” The aforesaid objects are the reasons for enactment of the Act which comes into force with effect from 01-07-2015. Section 2 of the Act deals with ‘Definitions’. Section 2(11) and (12) is germane to be noticed and it reads as follows: “2. Definitions.—In this Act, unless the context otherwise requires,— … … … … … … (11) “undisclosed asset located outside India” means an asset (including financial interest in any entity) located outside India, held by the assessee in his name or in respect of which he is a beneficial owner, and he has no explanation about the source of investment in such asset or the explanation given by him is in the opinion of the Assessing Officer unsatisfactory; asset (including financial interest in any entity) located outside India, held by the assessee in his name or in respect of which he is a beneficial owner, and he has no explanation about the source of investment in such asset or the explanation given by him is in the opinion of the Assessing Officer unsatisfactory; (12) “undisclosed foreign income and asset” means the total amount of undisclosed income of an assessee from a source located outside India and the value of an undisclosed asset located outside India, referred to in Section 4, and computed in the manner laid down in Section 5”. amount of undisclosed income of an assessee from a source located outside India and the value of an undisclosed asset located outside India, referred to in Section 4, and computed in the manner laid down in Section 5”. Section 3 deals with ‘charge of tax’. Therefore, it is the charging section. It reads as follows: “3. Charge of tax.—(1) There shall be charged on every assessee for every assessment year commencing on or after the 1st day of April, 2016, subject to the provisions of this Act, a tax in respect of his total undisclosed foreign income and asset of the previous year at the rate of thirty per cent of such undisclosed income and asset: Provided that an undisclosed asset located outside India shall be charged to tax on its value in the previous year in which such asset comes to the notice of the Assessing Officer. (2) For the purposes of this section “value of an undisclosed asset” means the fair market value of an asset (including financial interest in any entity) determined in such manner as may be prescribed.” Section 10 deals with ‘assessment’ and reads as follows: section. It reads as follows: “3. Charge of tax.—(1) There shall be charged on every assessee for every assessment year commencing on or after the 1st day of April, 2016, subject to the provisions of this Act, a tax in respect of his total undisclosed foreign income and asset of the previous year at the rate of thirty per cent of such undisclosed income and asset: Provided that an undisclosed asset located outside India shall be charged to tax on its value in the previous year in which such asset comes to the notice of the Assessing Officer. (2) For the purposes of this section “value of an undisclosed asset” means the fair market value of an asset (including financial interest in any entity) determined in such manner as may be prescribed.” Section 10 deals with ‘assessment’ and reads as follows: “10. Assessment.—(1) For the purposes of making an assessment or reassessment under this Act, the Assessing Officer may, on receipt of an information from an income-tax authority under the Income Tax Act or any other authority under any law for the time being in force or on coming of any information to his notice, serve on any person, a notice requiring him on a date to be specified to produce or cause to be produced such accounts or documents or evidence as the Assessing Officer may require for the purposes of this Act and may, from time to time, serve further notices requiring the production of such other accounts or documents or evidence as he may require. (2) The Assessing Officer may make such inquiry, as he considers necessary, for the purpose of obtaining full information in respect of undisclosed foreign income and asset of any person for the relevant financial year or years. (3) The Assessing Officer, after considering such accounts, documents or evidence, as he has obtained under sub-section (1), and after taking into account any relevant material which he has gathered, under sub-section (2) and any other evidence produced by the assessee, shall by an order in writing, assess [or reassess] the undisclosed foreign income and asset and determine the sum payable by the assessee. (4) If any person fails to comply with all the terms of the notice under sub-section (1), the Assessing Officer shall, after taking into account all the relevant material which he has gathered and after giving the assessee an opportunity of being heard, make the assessment [or reassessment] of undisclosed foreign income and asset to the best of his judgment and determine the sum payable by the assessee.” Chapter-V deals with ‘offences and prosecutions’. Sections 50 to 52 are the ones germane to be noticed under the chapter and they read as follows: “50. Punishment for failure to furnish in return of income, any information about an asset (including financial interest in any entity) located outside India.—If any person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of Section 6 of the Income Tax Act, who has furnished the return of income for any previous year under sub-section (1) or sub-section (4) or sub-section (5) of Section 139 of that Act, willfully fails to furnish in such return any information relating to an asset (including financial interest in any entity) located outside India, held by him, as a beneficial owner or otherwise or in which he was a beneficiary, at any time during such previous year, or disclose any income from a source outside India, he shall be punishable with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine. 51. Punishment for willful attempt to evade tax.—(1) If a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of Section 6 of the Income Tax Act, willfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act, he shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to ten years and with fine. 51. Punishment for willful attempt to evade tax.—(1) If a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of Section 6 of the Income Tax Act, willfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act, he shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to ten years and with fine. (2) If a person willfully attempts in any manner whatsoever to evade the payment of any tax, penalty or interest under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and shall, in the discretion of the court, also be liable to fine. (3) For the purposes of this section, a willful attempt to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof shall include a case where any person— (i) has in his possession or control any books of account or other documents (being books of account or other documents relevant to any proceeding under this Act) containing a false entry or statement; or or other documents (being books of account or other documents relevant to any proceeding under this Act) containing a false entry or statement; or (ii) makes or causes to be made any false entry or statement in such books of account or other documents; or statement in such books of account or other documents; or (iii) willlfully omits or causes to be omitted any relevant entry or statement in such books of account or other documents; or entry or statement in such books of account or other documents; or (iv) causes any other circumstance to exist which will have the effect of enabling such person to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof. the effect of enabling such person to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof. 52. Punishment for false statement in verification.—If a person, makes a statement in any verification under this Act or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine.” Chapter-VI deals with ‘tax compliance for undisclosed foreign income and assets’. Section 59 which is germane reads as follows:- “59. Declaration of undisclosed foreign asset.—Subject to the provisions of this Chapter, any person may make, on or after the date of commencement of this Act but on or before a date to be notified by the Central Government in the Official Gazette, a declaration in respect of any undisclosed asset located outside India and acquired from income chargeable to tax under the Income Tax Act for any assessment year prior to the assessment year beginning on 1st day of April, 2016— (a) for which he has failed to furnish a return under Section 139 of the Income Tax Act; 139 of the Income Tax Act; (b) which he has failed to disclose in a return of income furnished by him under the Income Tax Act before the date of commencement of this Act; furnished by him under the Income Tax Act before the date of commencement of this Act; (c) which has escaped assessment by reason of the omission or failure on the part of such person to make a omission or failure on the part of such person to make a return under the Income Tax Act or to disclose fully and truly all material facts necessary for the assessment or otherwise.” Section 72 reads as follows: “72. Removal of doubts.—For the removal of doubts, it is hereby declared that— (a) for which he has failed to furnish a return under Section 139 of the Income Tax Act; 139 of the Income Tax Act; (b) which he has failed to disclose in a return of income furnished by him under the Income Tax Act before the date of commencement of this Act; furnished by him under the Income Tax Act before the date of commencement of this Act; (c) which has escaped assessment by reason of the omission or failure on the part of such person to make a omission or failure on the part of such person to make a return under the Income Tax Act or to disclose fully and truly all material facts necessary for the assessment or otherwise.” Section 72 reads as follows: “72. Removal of doubts.—For the removal of doubts, it is hereby declared that— (a) save as otherwise expressly provided in the Explanation to sub-section (1) of Section 69, nothing contained in this Chapter shall be construed as conferring any benefit, concession or immunity on any person other than the person making the declaration under this Chapter; to sub-section (1) of Section 69, nothing contained in this Chapter shall be construed as conferring any benefit, concession or immunity on any person other than the person making the declaration under this Chapter; (b) where any declaration has been made under Section 59 but no tax and penalty has been paid within the time specified under Section 60 and Section 61, the value of such asset shall be chargeable to tax under this Act in the previous year in which such declaration is made; but no tax and penalty has been paid within the time specified under Section 60 and Section 61, the value of such asset shall be chargeable to tax under this Act in the previous year in which such declaration is made; (c) where any asset has been acquired or made prior to commencement of this Act, and no declaration in respect of such asset is made under this Chapter, such asset shall be deemed to have been acquired or made in the year in which a notice under Section 10 is issued by the Assessing Officer and the provisions of this Act shall apply accordingly.” to commencement of this Act, and no declaration in respect of such asset is made under this Chapter, such asset shall be deemed to have been acquired or made in the year in which a notice under Section 10 is issued by the Assessing Officer and the provisions of this Act shall apply accordingly.” (Emphasis supplied) Section 2(11) and (12) define what is ‘undisclosed asset located outside India’. An asset held by an assessee in his name or in respect of which he is the beneficial owner and he has no explanation about the source of investment, becomes an undisclosed asset located outside India. Sub-section (12) of Section 2 defines ‘undisclosed foreign income and asset’, to mean total amount of undisclosed income of an assessee from a source located outside India and the value thereof, the computation is referable to Sections 4 and 5 of the Act. Chapter-II deals with ‘basis of charge’. Charge of tax is under Section 3. Therefore, Section 3 becomes a charging section. Section 10 deals with ‘assessment’. For the purpose of assessment or re-assessment, a notice is to be issued on any person for production of accounts or documents or evidence which may be required for the purpose of the Act. What the Assessing Officer would undertake is dealt with under sub-sections (2) to (4) of Section 10. Section 50 which comes under Chapter-V dealing with ‘offences and prosecutions’ and punishes a person on his failure to furnish in the return of income or any information about an asset located outside India. Section 51 deals with willful attempt of an assessee to evade tax. Section 52 deals with a statement of the assessee which is found to be false on verification of a document which would become an offence under the Act. Section 72 which deals with ‘removal of doubts’ is what forms the fulcrum of the issue in the lis. Whenever doubts would occur about execution of the provisions of the Act, they are to be thrashed out by taking recourse to Section 72. Sub-section (c) of section 72 is what has been pressed into service in the case at hand. It is these provisions of law that are germane to be noticed for resolution of the issue in the lis. 10. The facts that led to registration of the complaint against the petitioners in all these cases are the two Companies incorporated as British Virgin Island Companies in Singapore in the names and styles of Gleaming Snow Worldwide Limited and Oriental Success Universal Corporation which came to be incorporated on two dates i.e., on 17-03-2008 and 12-05-2009 respectively. The first Company that was incorporated was struck off from BVI and what remained was the second company/Oriental Success Universal Corporation. In the said company about US$56000 was credited into the bank account of the said Corporation in UBS Bank, Singapore. After the said deposit the account in the Bank of the Corporation was closed on 27-05-2010. After closure of the account, the Corporation was also struck off from the rolls of BVI, Singapore. Therefore, the incorporation and striking off of the Companies took place between 12-06-2009 and 02-11-2010. The petitioners in all these cases are members of the same family. They were Directors of the aforesaid Companies at the time when the Companies were incorporated and closed. At that point in time, the Act was not in existence. 11. The Act, as observed hereinabove, comes into effect on 01-07-2015. Therefore, it is a case where all facts have happened five years prior to the Act itself coming into force. The respondent/prosecution takes recourse to Section 72 of the Act supra which dealt with removal of doubts. The respondent registers a complaint against the petitioners invoking Section 200 of the Cr.P.C. Since the entire proceedings have triggered by the registration of the complaint, I deem it appropriate to notice the complaint and it reads as follows: “COMPLAINT u/s 200 of THE CRIMINALPROCEDURE CODE (Offence Punishable Section 52 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015) 1)The Complainant is the Deputy Director of Income Tax (Investigation) and a public servant. The complainant is filing the present complaint in his official capacity as a public servant representing the Income Tax Department. Hence, his presence may kindly be dispensed with in accordance with u/s 256 of The Code of Criminal Procedure. 2)The complainant submits that the Principal Director of Income Tax (Investigation), Panaji has authorized the filing of the complaint vide his Sanction Order dt.: 25/03/2019. of Income Tax (Investigation), Panaji has authorized the filing of the complaint vide his Sanction Order dt.: 25/03/2019. 3)The accused is assessable to tax under the jurisdiction of Deputy Commissioner of Income Tax, Circle-1, Belagavi; the assessment under the Act of the accused is under progress with Deputy Director of Income Tax (Inv.), Unit-1, Belagavi. That the Act will henceforth called as the "Act" in the top-numbered case for brevity and convenience. jurisdiction of Deputy Commissioner of Income Tax, Circle-1, Belagavi; the assessment under the Act of the accused is under progress with Deputy Director of Income Tax (Inv.), Unit-1, Belagavi. That the Act will henceforth called as the "Act" in the top-numbered case for brevity and convenience. 3)The accused is assessable to tax under the jurisdiction of Deputy Commissioner of Income Tax, Circle-1, Belagavi; the assessment under the Act of the accused is under progress with Deputy Director of Income Tax (Inv.), Unit-1, Belagavi. That the Act will henceforth called as the "Act" in the top-numbered case for brevity and convenience. jurisdiction of Deputy Commissioner of Income Tax, Circle-1, Belagavi; the assessment under the Act of the accused is under progress with Deputy Director of Income Tax (Inv.), Unit-1, Belagavi. That the Act will henceforth called as the "Act" in the top-numbered case for brevity and convenience. 4)Show cause notice u/s. 52 of the Act was issued to the accused on 31.01.2019. As per the information received from tax authorities of British Virgin Islands (BVI) and Singapore establishes that the accused was a director of Oriental success Universal Corporation (OSUC) Limited. Information so received also establishes that the accused was one of the beneficial owners of the bank account no.152007 of the Oriental Success Universal Corporation (OSUC) Limited maintained with UBS Bank, Singapore. The said bank account shows credits of USD 16,000 on 08.01.2010 and USD 40,000 on 16.03.2010. 5)The accused has denied her investments, interests, beneficial ownership of the abovementioned entities as beneficial ownership of the Bank Account bearing no. 152007, of Oriental Success Universal Corporation (OSUC) Limited maintained with UBS Bank, Singapore in his statements recorded u/s 131 of the Income Tax Act, 1961 on 10.12.2015 and 17.03.2017 before the Assistant Director of Income Tax (Inv.), Unit-1 Belagavi as well as the statement recorded u/s 8(1) of the Act 09.04.2018 before the Assistant Director of Income Tax(Inv.), Unit-1, Belagavi who has been notified under the Act to exercise the concurrent jurisdiction under Act in the case of the accused vide the Principal Director of Income Tax(Investigation) office notification F.No.PNJ/Prosn/PDIT(Inv.)/2017-18/01 dated 14.03.2018. This denial by the accused is contrary to the evidence gathered in the form of information received from the competent authorities of the foreign jurisdictions of BVI and Singapore. The evidences which establish the accused the director and shareholder of the companies, Gleaming Snow Worldwide Limited (GSWL) and Oriental Success Universal Corporation (OSUC) Limited, BVI as well as the beneficial owner of the bank account of Oriental Success Universal Corporation (OSUC) Limited maintained the UBS Bank, Singapore bearing Account number 152007 are as under: (i)The incorporation documents received from BVI tax Authorities in of Oriental Success Universal Corporation Ltd, BVI, contain the copies of the Register of Directors as well as Register of Shareholders. As per the documents, the accused is a director of the company. BVI tax Authorities in of Oriental Success Universal Corporation Ltd, BVI, contain the copies of the Register of Directors as well as Register of Shareholders. As per the documents, the accused is a director of the company. (ii)The KYC documents provided by the BVI tax Authorities in respect of the incorporation of Oriental Success Universal Corporation Ltd, BVI, contain the passport copy of the accused bearing Passport No. Z1366831. Authorities in respect of the incorporation of Oriental Success Universal Corporation Ltd, BVI, contain the passport copy of the accused bearing Passport No. Z1366831. (iii)Singapore Tax Authorities have provided the information in respect of the bank account of the Oriental Success Universal Corporation information in respect of the bank account of the Oriental Success Universal Corporation (ii)The KYC documents provided by the BVI tax Authorities in respect of the incorporation of Oriental Success Universal Corporation Ltd, BVI, contain the passport copy of the accused bearing Passport No. Z1366831. Authorities in respect of the incorporation of Oriental Success Universal Corporation Ltd, BVI, contain the passport copy of the accused bearing Passport No. Z1366831. (iii)Singapore Tax Authorities have provided the information in respect of the bank account of the Oriental Success Universal Corporation information in respect of the bank account of the Oriental Success Universal Corporation Ltd, BVI maintained with UBS Bank, Singapore, bearing account no. 152007. The said details contain the Account Opening form signed by the assessee, declaration of the beneficial owner ship of the assessee by herself under her signatures, copies of the passport bearing no. Z1366831 belonging to the assessee used as one of the KYC document and also the incorporation documents of Oriental Success Universal Corporation Ltd, BVI along with her description as the director of the said entity which has also been used as one of the KYC document. (iv)Singapore Tax Authorities have also provided the bank statement of the said account maintained with UBS AG, Singapore and as per the analysis of the said account, two major deposits amounting to USD 16,000 and USD 40,000, were credited in the said account on 08.01.2010 and 16.03.2010 respectively. the bank statement of the said account maintained with UBS AG, Singapore and as per the analysis of the said account, two major deposits amounting to USD 16,000 and USD 40,000, were credited in the said account on 08.01.2010 and 16.03.2010 respectively. (v)The signatures of the accused on all statements recorded before the Assistant Director of Income Tax (Inv.), Unit-1, Belagavi match with her signatures on the documents provided by UBS AG through Inland Revenue Authority of Singapore. statements recorded before the Assistant Director of Income Tax (Inv.), Unit-1, Belagavi match with her signatures on the documents provided by UBS AG through Inland Revenue Authority of Singapore. 6)However, the accused has made false statement u/s 8(1) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 recorded on 09.04.2018 in the office of Assistant Director of Income Tax(Inv.), Unit-1, Belagavi. The accused has denied having any interest in any foreign entity located outside India or having beneficial ownership of the foreign bank account as discussed above. The accused has failed to provide correct information statement u/s 8(1) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 recorded on 09.04.2018 in the office of Assistant Director of Income Tax(Inv.), Unit-1, Belagavi. The accused has denied having any interest in any foreign entity located outside India or having beneficial ownership of the foreign bank account as discussed above. The accused has failed to provide correct information 7) 8) 7) 8) regarding his interests in Oriental Success Universal Corporation, BVI and Gleaming Snow Worldwide Limited, BVI and the foreign bank account in the UBS, Singapore in the statement recorded u/s 8(1) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The accused interest in the foreign entity located outside India and being beneficial owner of the foreign bank account is evident from the information received from the foreign jurisdictions of BVI and Singapore. Considering these facts, the accused was given an opportunity to show cause as why prosecution u/s 52 of the Black Money (Undisclosed, Foreign Income and Assets) and Imposition of Tax Act, 2015 should not be launched against her. In her reply (dated: 21/02/2019) to the showcause notice, the accused has submitted that the process of sanctioning of prosecution under Chapter V of the Act can be commenced only if and after the Assessing Officer has reached a conclusion adverse to the accused u/s 10 of the Act. As per the section 50 of the Act, there is no bearing on the completion of assessment u/s 10 of the Act to launch the prosecution. Prosecution u/s 52 of the Act can be launched irrespective of the completion of assessment u/s 10 of the Act. Therefore, this argument of the accused cannot be accepted. The accused has further submitted that he has not made any false statement she has referred only to Q.No.7 of the statement recorded u/s 8(1) of the Balance Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 on 09.04.2018. Whereas, when the accused was specifically asked regarding account of Oriental Success Corporation maintained with UBS, Singapore with account number 152007, the accused did not provide the true answer regarding him being the beneficial owner of that account. The relevant part of the statement is reproduced as follows: Q.No.17As per Information received by this office, Oriental Success Universal Corporation (OSUC) wherein you are director; has maintained account number 152007 with UBS, Singapore Branch. The account was opened on 12.06.2009 and closed on 27.05.2010. Please offer your comments in this regard. office, Oriental Success Universal Corporation (OSUC) wherein you are director; has maintained account number 152007 with UBS, Singapore Branch. The account was opened on 12.06.2009 and closed on 27.05.2010. Please offer your comments in this regard. Ans. Sir, as stated earlier, neither me nor my family members nor any of my firms or companies have any foreign bank account. If my personal details like passport number, etc have been misused, I am not aware about it. family members nor any of my firms or companies have any foreign bank account. If my personal details like passport number, etc have been misused, I am not aware about it. The accused has stated that her personal details have been misused but it evident from the information received from UBS, Singapore that the accused himself has signed on the 'Corporate Certificate' that contains the passport numbers of the accused and her family members. It is clearly mentioned on the 'Corporate Certificate' that "the specimen signatures set out above are the authentic signatures of the named persons". The 'Corporate Certificate' has been certified by the father (Shri. Arvind Balakrishna Gogte) and mother (Smt. Mangal Arvind Gogte) of the accused. The signature of the accused on the 'Corporate Certificate' is the same as the signature of the accused on statement recorded u/s 8(1) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Therefore, accused statement that her personal details like passport number, etc had been misused is false. 9)The accused in her reply dated 14.03.2019 raised objections regarding jurisdiction of the undersigned to issue show cause notices for prosecution. As per accused reply, section 55 of the Act does not mention Principal Director of Income Tax as sanctioning authority. Section 55 mentions objections regarding jurisdiction of the undersigned to issue show caus