Deputy Director of Income Tax not an appellate authority for decisions/orders of Income Tax Officers

Supreme Court: Deciding the question that whether the Deputy Director of Income Tax was competent to make complaint regarding commission of offence under Sections 109/191/193/196/200/420/120B/34 IPC against the appellants for making false statements denying of having any locker either in individual names or jointly in any bank, the Court, answered in negative and held that the Deputy Director of Income Tax cannot be construed to be an authority to whom appeal would ordinarily lie from the decisions/orders of the I.T.Os. involved in the search proceedings in the case in hand so as to empower him to lodge the complaint in view of the restrictive preconditions imposed by Section 195 CrPC.

Taking note of the provisions under the Income Tax Act, 1961, the Bench of P.C. Ghose and Amitava Roy, JJ said that though under Section 116 of the IT Act, under clause (d) thereof, Deputy Director of Income Tax, Deputy Commissioner of Income Tax and Deputy Commissioner of Income Tax (Appeals) have been bracketed together, it is only the Deputy Commissioner (Appeals), as is apparent from Section 246(1) of IT Act, who has been conferred with the appellate jurisdiction to entertain appeals, albeit from specified orders passed by an assessing officer as mentioned in that sub-section. The Deputy Director of Income Tax in particular, has not been designated to be the appellate authority or forum from such orders or any other order of the assessing officer.

It was further explained that the decisive and peremptory prescription of Section 195(4) of the Code is not merely the levels of the rank inter se but the recognised appellate jurisdiction ordinarily exercised by the authority or the forum concerned for a complaint to be validly lodged by it, if in a given fact situation, the initiation of prosecution is sought to be occasioned not by the court in the proceedings before which the contemplated offence(s) had been committed, but by a court to which ordinarily appeals therefrom would lie. [Babita Lila v. Union of India, 2016 SCC OnLine SC 890, decided on 31.08.2016]

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