HC declines to direct ITD to investigate Tax Evasion Petition due to limitation

High Court declines to direct ITD to investigate allegations of tax evasion as per Tax Evasion Petition due to limitation

In a recent judgment, Hon’ble Chhattisgarh High Court declined to direct Income Tax Department to investigate Tax Evasion Petition filed by Petitioner being barred by limitation

ABCAUS Case Law Citation:
4992 (2026) (01) abcaus.in HC

In the instant case, the Petitioner had approached the Hon’ble Chhattisgarh High Court for issue of direction compelling Income Tax Department to initiate and conduct a thorough, effective, and time-bound investigation into the detailed allegations of tax evasion, concealment of income/wealth, and abetment thereof against few individuals and their Chartered Accountant.

It was prayed that investigation should be conducted in accordance with the provisions of the Income Tax Act, 1961, erstwhile Wealth Tax Act, 1957 (for the relevant period), and all other applicable laws, giving due consideration to the Tax Evasion Petition filed by the Petitioner, supplementary information and the unequivocal admissions etc.

It was also prayed to direct completion of the investigation within a stipulated period, preferably not exceeding six months from the date of this Hon’ble Court’s order, or such other period as this Hon’ble Court may deem fit and proper.

It was also prayed that direction be issued to Income Tax Department, compelling it to share all findings, outcomes, and relevant evidence gathered during its investigation pertaining to potential criminal offences (including but not limited to fraud, cheating, criminal breach of trust, money laundering, benami transactions, and offences under the Indian Penal Code) with Police authorities, the concerned District Magistrate, and other relevant law enforcement agencies such as the Enforcement Directorate, Serious Fraud Investigation Office, etc. for appropriate, independent investigation and action under the Indian Penal Code, 1860, the Prevention of Money Laundering Act, 2002, the Prohibition of Benami Property Transactions Act, 1988, or any other applicable laws.

The counsel for Income Tax Department submitted that the petitioner had filed Tax Evasion Petition before the Income Tax Department and the same had rightly been rejected on 22.08.2025 on the count that it was barred by limitation as per amendment made in the Income Tax Act, 1961.

The Hon’ble High Court opined that considering the facts of the case and relief sought by the petitioner, no Writ of Mandamus can be issued to the respondents at this stage.

Accordingly, the writ petition was dismissed.

Download Full Judgment Click Here >>

• Object of assessment proceedings is not to find empirically correct solution on every fact issue – HC
• Penalty u/s 270A deleted as assessee filed revised computation during scrutiny
• Penalty u/s 271B for unfilled column 40 in Tax Audit Report Form 3CD deleted by ITAT
• Merely ex-parte rectifying computation without amending assessment order not make it nullity- ITAT
• Once assessee discharges primary onus, it shifts to AO to bring evidence to contrary – ITAT