[Income Tax] Providing Information Regarding Ongoing Investigation To Its Informer Is Inappropriate, Injurious: Delhi High Court

The observation was made by a Bench of Justice Suresh Kumar Kait while hearing a case against Magistrate's order directing the Income Tax Department to file an action taken status report with respect to a tax evasion complaint filed by the Respondent herein.

The Principal Director of the Investigation Department of Income Tax had filed an application under Section 482 of CrPC, seeking that the orders passed by ACMM (Special. Acts) be quashed as they were passed without jurisdiction.

It was contended that no provision of the CrPC gives such power to ACMM for calling for a status report/action taken report from the Investigation Wing of the Income Tax Department if no complaint/case is pending before the Court below.

Finding merit in this submission, the Bench was of the opinion that the ACMM had "usurped" the inherent jurisdiction of the High Court, which is impermissible under the law. It held,

"It is not in dispute that the inherent powers vests with this Court only, however, not before the subordinate judiciary. As the case in hand is concerned, respondent no.1 had filed application without any procedure mentioned in Cr.P.C. or Income Tax Act. Moreover, learned Judge has passed directions after directions without realizing even that he does not have inherent power under Cr.P.C."

The Court then proceeded to observe that in cases pertaining to Tax evasion petitions like the present case, Courts should exercise their powers sparingly.

It observed, "it is a well-settled principle that only the broad outcome of the Tax evasion petition may be communicated to the complainant, that too upon culmination of the investigation. The Income Tax Department has a specific framework of investigations dealing with the TEPs and information in respect of the investigation carried out by the office of Directorate General of Income Tax (Investigation) is not required to be intimated to the complainant as the said office is even outside the purview of the RTI Act, 2005."

Reliance was placed on SK Agarwalla v. Directorate General of Central Excise Intelligence, (2008) SCC OnLine 1781, wherein it was categorically held that it would be inappropriate and even injurious, to ongoing investigations if informers are allowed to intrude into the investigative progress all in the name of enforcing a Right to Information.

Accordingly, the application under Section 482 was allowed and the impugned orders were quashed for being illegal, perverse and without jurisdiction.

Case Title: Principal Director, Income Tax (Investigation-2) v. Rajiv Yaduvanshi & Ors.

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