SACHIN NARAYAN S/O LATE H G NARAYAN Vs. INCOME TAX DEPARTMENT BY ITS DEPUTY DIRECTOR OF INCOME TAX, BANGALORE

JUDGEMENT

(1.) In these writ petitions though initially reliefs as set out in the respective writ petitions was sought for, they have restricted to single prayer only by filing memos on 07.03.2019 stating thereunder that they would not press other prayers as indicated in the respective memos and would restrict their prayer as indicated therein. In other words, prayer sought for in all these writ petitions relates to quashing of the summons issued to petitioners by the Enforcement Directorate (for short 'ED') to appear before them for investigation. The reliefs now sought for in the respective writ petitions relates to quashing of summons issued by ED and for immediate reference the prayer sought for in W.P.No.5824/2019 is extracted herein below:

(2.) I have heard the arguments of Sri. Kapil Sibal, Sri.B.V.Acharya, Sri.A.Shankar and Sri. Shashikiran Shetty, learned Senior Advocates and Sri.Sham Sundar, learned Advocate appearing for petitioners and Sri.K.M.Nataraj, learned Additional Solicitor General of India, Sri.Prabhuling K Navadgi, the then Learned Additional Solicitor General of India assisted by Sri.Unnikrishnan, learned Central Government Standing Counsel for Enforcement Directorate and Sri.Jeevan Neeralagi, learned Standing Counsel appearing for Income Tax Department.

(3.) Sri Kapil Sibal, learned Senior counsel appearing for petitioner in W.P.No.6210/2019 would contend that basis on which the Enforcement Directorate have issued summons to the petitioner to appear before them is for a purported investigation being carried, which is an offshoot of search conducted by the Income Tax Department and a complaint having been filed before the jurisdictional Court after purportedly obtaining sanction under Section 279(1) of the Income Tax Act, 1961 (for short 'IT Act') alleging thereunder, that accused No.1 i.e., Sri D K Shivakumar committed an offence punishable under Sections 276C(I), 277 of IT Act and Sections 193 and 199 read with Section 120B of IPC and accused Nos.2 to 5 had committed an offence punishable under Sections 278, 277 of IT Act and Sections 193 and 199 read with Section 120B of IPC and to take cognizance for which offences are not scheduled offences under the provisions of Prevention of Money Laundering Act, 2002 (for short 'PML Act'). He would contend that Section 120B of IPC cannot be invoked in the absence of predicate offence and offence under IT Act not being a scheduled offence, proceedings under PML Act cannot be continued. He would also contend that a plain reading of the definition clause of Section 2(p), 2(u) & Section 3 of PML Act would clearly indicate that it is only the "proceeds of crime" if attempted to be ploughed into main stream of the economy would attract the definition of "money laundering" and offence alleged to have been committed by the petitioner even according to respondents being under IT Act and same not being a scheduled offence, which is sine qua non for the provisions of PML Act being attracted, question of petitioner appearing before ED does not arise. He would elaborate his submission by contending that offence punishable under Section 276C(1) and Section 277 of the IT Act are compoundable offences under Section 279(2) and stage has not come where prosecution can be lodged and the procedure adopted by the enforcement authority is unknown to the cannons of law. Hence, he seeks for quashing of summons issued to petitioner to appear for investigation and entire proceedings pending before ED.