Unauthenticated Documents From Foreign Govt Regarding Swiss Bank Account Of Assessee Can't Form Basis For Criminal Action: Delhi HC

The Delhi High Court has quashed the criminal proceedings initiated against an assessee under Section 276C, 276D and 277 of the Income Tax Act 1961 merely on the basis of some unauthorised documents alleging existence of an undisclosed Swiss Bank account in his name.In doing so, Justice Neena Bansal Krishna observed,“Merely on some unauthenticated information received from a third Country with no material evidence, is not sufficient to make out a prima facie case and there cannot be a presumption that a person has committed any wrongdoing.Thus, mere surmise and conjectures is not enough to prosecute a person alleging a criminal offence under Section 276D.”Petitioner had sought quashing of the criminal complaints on the ground that the assessment order forming the foundation of the complaints had been set aside in Appeal by the Income Tax Appellate Tribunal.Significant to note that the assessment order was passed in the backdrop of information received from the French Government under the Double Taxation Avoidance Agreement (DTAA), indicating that the Petitioner held bank accounts in HSBC Private Bank (Suisse), SA, Switzerland. Though the Petitioner denied the allegations, an assessment order came to be passed against him, making certain additions on account of an undisclosed alleged Foreign Bank Account. The criminal complaints were also launched on this basis.After ITAT set aside the additions, Petitioner approached the High Court contending that nothing survives for prosecution.The Respondents, however, contended that the result of any proceeding under the IT Act would not be binding on the criminal court, which must independently decide on the basis of evidence before it.At the outset, the High Court conceded that if credible information about a wrongdoing associated with the income of an individual is received, the Department is duty-bound to investigate the same, within the boundaries of constitutional permissibility. However, in the present case, it noted that the source of information was “non-authenticated documents” received from the French Government under DTAA. Court also noted that on the basis of these unauthenticated documents, a raid was conducted in the premises of the Petitioner, but no incriminating document even remotely suggesting the existence of a foreign Account was discovered.Thus, in the absence of any evidence of there being a concealment of the income, the Court held, it cannot be said that the income Assessment as submitted by the Petitioner was fraudulent or that there was any concealment of true income.As such, the petition was allowed and complaints were quashed.Appearance: Mr. Manish Kumar Singh and Ms. Nusrat Hossain, Advocates for Petitioner; Mr. Shlok Chandra, Sr.SC with Ms. Naincy Jain and Ms. Madhavi Shukla, Jr. SCs.Case title: Anurag Dalmia v. Income Tax OfficeCitation: 2025 LiveLaw (Del) 831Case no.: CRL.M.C. 1575/2018Click here to read judgment

Unauthenticated Documents From Foreign Govt Regarding Swiss Bank Account Of Assessee Can't Form Basis For Criminal Action: Delhi HC

Kapil Dhyani

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