Age At The Time Of Commission Of Offence Has To Be Taken And Not When The Proceedings Initiated: Delhi High Court

The Delhi High Court upheld the prosecution for an undisclosed foreign bank account, observing that the age at the time of the offense must be taken into account, not when the proceedings were initiated.

The single judge bench of Justice Suresh Kumar Kait has relied on the decision of the Delhi High Court in the case of Pradip Burman vs. Income Tax Office, in which it was held that Circular/Instruction No. 5051 dated 07.02.1991 issued by the Central Board of Direct Taxes (CBDT) does not bar the initiation of prosecution for those who have attained the age of 70 years.

The court, while taking note of the date of birth of the petitioner as 30.03.1936, found that at the time of the commission of the offense in 1991, he was more than 55 years of age. The Circular/Instruction No. 5051 dated 07.02.1991 notes that prosecution is normally not initiated against a person who has attained the age of 70 years at the time of the commission of the offense.

The court also noted that on September 26, 2013, a show cause notice under Section 274 read with Section 271 was issued against him, as well as a penalty under Section 271 (1) (b) for failure to comply with the notice under Section 142 (1). It was only thereafter that the petitioner chose to file revised income tax returns. By doing so, he cannot evade the judicial process of law for not disclosing his correct income and foreign account since the year 1991.

The respondent/Income Tax Office (ITO) filed a complaint against the assessee/petitioner alleging the opening of an undisclosed account in HSBC Bank, London, and having the maximum credit balance of USD 575,010, equivalent to Rs. 2,53,00,440 at the exchange rate of Rs. 44 per USD for the year 2006-07.

The petitioner contended that he is an architect by profession and 80 years old, that a detailed response to the show cause notices issued by the department was sent, and the beneficial circulars were also brought to their knowledge, in particular Instruction No. 5051 dated 07.02.1991.

However, the Commissioner of Income Tax did not consider the replies filed by the petitioner and initiated proceedings alleging tax evasion for the assessment year 2006-07.

The petitioner claimed that he was already 70 years old as of March 31, 2006, in accordance with Instruction No. 5051 dated February 7, 1991. The prosecution cannot be initiated against a person who has attained the age of 70 years at the time of the commission of the offense.

The petitioner stated that in order to buy peace in his old age, he had already paid all the taxes and interest on the assessment year 2006-07 on the basis of documents provided to him during the search and proceedings on May 16, 2012. However, the respondents have taken a stand that despite the payments of taxes, the petitioner will not be absolved of the offenses committed by him. There was no provision for the assessee to disclose foreign accounts till the year 2013, and still, the petitioner has paid the taxes, which substantiates that the default on the petitioner's part was not intentional and deliberate in an attempt to evade the tax.

The department contended that the petitioner's date of birth was 30.03.1936 and the foreign account was opened on 20.08.1991. Accordingly, taking his date of birth as March 30, 1936, the petitioner/assessee was 55 years of age when the undisclosed foreign account was opened. However, his age cannot be taken into account on the date of filing the return for the assessment year 2006-07.

The court, while dismissing the petition, held that the petitioner cannot be permitted to take advantage of Circular/Instruction No. 5051 dated 07.02.1991 to find an escape route for the wrong committed by him.

Case Title: Rajinder Kumar Versus State

Citation: 2022 LiveLaw (Del) 1207

Date: 16.12.2022

Counsel For Petitioner: Senior Advocate Mohit Mathur, Advocate Abhilash Mathur, Harsh Gautam

Counsel For Respondent: Senior Standing Counsel Abhishek Maratha

Click Here To Read The Order