Prosecution u/s 420 of IPC disentitles benefit of IDS-2016 – High Court

Prosecution u/s 420 of IPC disentitles benefit of IDS-2016 as scheme not apply to prosecution of any offence punishable under Chapter IX or Chapter XVII of the IPC-High Court

ABCAUS Case Law Citation:
ABCAUS 2343 (2018) (05) HC

By the Finance Act, 2016 Government came with a scheme known as “Income Declaration Scheme, 2016” (IDS-2016). The Scheme gave a chance to an assessee to declare its undisclosed assets/income. One of the important conditions for eligibility for a person to avail this scheme was that the Scheme shall not apply in relation to prosecution of any offence punishable under Chapter IX or Chapter XVII of the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967 and the Prevention of Corruption Act, 1988.

The petitioner was a Private Limited Company (the Company) which had claimed benefit under the said Scheme and sought a declaration, which had been denied to the petitioner by the Income Tax Authorities on the ground that CBI had filed prosecution under the Prevention of Corruption Act against the promoters of the company.

The Petitioner contended that the charges had been framed by the Special Judge, Anti Corruption, CBI against the petitioner only under Sections 120-B, 420, 468 and 471 I.P.C. and not under the provisions of Prevention of Corruption Act.

However the Hon’ble High Court observed that Section 420 of IPC is an offence which comes under Chapter XVII of the IPC. The IDS-206 Scheme categorically stipulates that in case prosecution is going on against a person for any offence punishable under Chapter IX or Chapter XVII of the IPC, he is not liable to get benefit of the Scheme.

The Hon’ble High Court opined that although the order of the Income Tax Authorities denying the benefit of scheme to the petitioner did not refer to prosecution under Section 420 of IPC but of Corruption of Prevention Act, but since prosecution was going on against the petitioner for an offence which comes under Chapter XVII of the IPC, petitioner was not liable to be granted benefit of the said Scheme.

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