1 day ago
Bombay High Court Quashes Tax Evasion Case Against Designers
Abu Jani and Sandeep Khosla’s company was accused of trying to avoid paying tax.
The tax amount was Rs 5.27 lakh.
The company paid the tax three days after receiving a notice from the Income Tax Department.
It also later paid Rs 1 lakh in interest.
The department argued that the company had waited too long and had several chances to pay.
The designers’ lawyers said the payment showed that there was no plan to avoid the tax.
The Bombay High Court said late payment by itself is not the same as deliberately evading tax.
The court therefore cancelled the criminal case against the designers and their company.
The Bombay High Court quashed criminal proceedings against designers Abu Jani, Sandeep Khosla, and their company.
The court held that delayed tax payment alone does not prove a wilful attempt to evade tax.
The Income Tax Department had alleged nonpayment of Rs 5.27 lakh in self-assessment tax for assessment year 2017-18.
The company paid the tax three days after receiving a show-cause notice and later paid Rs 1 lakh in interest.
The court said continuing the prosecution would amount to a manifest abuse of the process of law.
- Who
- Abu Jani, Sandeep Khosla, their company, and the Income Tax Department.
- What
- The Bombay High Court quashed criminal proceedings alleging wilful tax evasion.
- Where
- The Bombay High Court in Mumbai, in proceedings connected to the Additional Chief Metropolitan Magistrate at Ballard Pier.
- When
- The article is dated September 12, 2026; the tax was paid on October 19, 2018, and the interest on March 1, 2020.
- Why
- The court found that delayed payment alone did not establish a deliberate or positive act to evade tax.
Designers and Company
Income Tax Department
Meaning of delayed payment
Designers and Company
The delayed payment did not show an intention to evade tax, and the complaint identified no positive or overt act of wilful evasion.
Income Tax Department
The company had several opportunities to pay but did so only after receiving a show-cause notice, which the department argued indicated an attempt to evade payment.
Proper forum for deciding the allegation
Designers and Company
The criminal complaint should be cancelled because its allegations did not establish the required deliberate conduct.
Income Tax Department
The department argued that the question of intent should be decided by the trial court.
Key facts
- Tax allegedly unpaid
- Rs 5.27 lakh in self-assessment tax for assessment year 2017-18
- Tax payment date
- October 19, 2018
- Interest payment
- Rs 1 lakh paid on March 1, 2020
- Relevant law
- Section 276C(2) of the Income Tax Act
- Show-cause notice
- The tax was paid three days after the notice was received
- Court outcome
- The complaint and all consequential criminal proceedings were quashed
Quotes
Justice RR Bhonsale
Bombay High Court judge who delivered the ruling
“Mere failure to pay or delayed payment cannot be equated to wilful evasion of tax.”
freepressjournal.in
“A mere non-payment of the tax or a delayed payment cannot be included”
freepressjournal.in
Sources
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