Facts of the Case

As per the judgment, the petitioner was alleged to have maintained an undisclosed foreign bank account in HSBC Bank, Zurich, based on information received from the Government of France. A search was conducted on 28 July 2011, during which the petitioner allegedly admitted to holding such an account.

Subsequently, the Income Tax Department filed three separate criminal complaints against the petitioner:

  1. Under Section 276D for non-compliance with statutory notice
  2. Under Section 276C(1) for tax evasion
  3. Under Section 277 for false statements in income tax returns

All complaints were based on identical material, evidence, and allegations, primarily relating to non-disclosure of the same foreign account across different assessment years. 

The petitioner challenged the refusal of the trial court to club these complaints for a joint trial.

Issues Involved

  1. Whether multiple prosecutions based on the same set of facts for different assessment years are legally sustainable.
  2. Whether such prosecutions violate the principle of double jeopardy and “same transaction”.
  3. Whether separate trials should be clubbed under Section 220 CrPC 

Petitioner’s Arguments

  • The complaints were based on identical evidence, witnesses, and allegations, making multiple prosecutions an abuse of process.
  • Filing separate complaints for different assessment years amounts to double jeopardy and violates Article 20(2) of the Constitution.
  • The core allegation was the existence of a single foreign account; hence, prosecution should be unified.
  • Relied on the Doctrine of Issue Estoppel, arguing that repeated trials on the same facts are impermissible.
  • The trial court erred in holding that each assessment year constitutes a separate offence despite the same underlying transaction.

Respondent’s Arguments

  • Each assessment year constitutes a separate cause of action under the Income Tax Act.
  • Offences under Sections 276C and 277 are assessment-year specific, as they relate to separate returns filed each year.
  • Non-compliance under Section 276D is also an independent offence.
  • Therefore, separate complaints and trials are legally valid 

Court’s Findings / Judgment

  • The Court observed that all three complaints were based on identical facts, evidence, and allegations, as clearly demonstrated in the comparative chart (pages 12–14). 
  • It held that the offences formed part of the “same transaction” within the meaning of Section 220 CrPC.
  • The Court emphasized that:
    • There was continuity of action
    • Common evidence and purpose existed
    • The substratum of all complaints was identical
  • The Court relied on principles laid down in:
    • Mohan Baitha vs State of Bihar
    • Chandni Srivastava vs CBI
  • It ruled that conducting separate trials could lead to conflicting judgments and unnecessary multiplicity of proceedings.

Court Order

  • The impugned order of the trial court refusing joint trial was set aside.
  • The Court directed that all three complaints be tried together in a common trial.
  • Stay on proceedings was vacated, and trial was ordered to proceed accordingly. 

Important Clarification by Court

  • The Court clarified that the test of “same transaction” depends on:
    • Proximity of time
    • Unity of purpose
    • Continuity of action
    • Commonality of evidence
  • Even if offences are technically distinct, they must be tried together if they arise from a common factual foundation.

Sections Involved

  • Section 276C(1), Income Tax Act, 1961 (Willful attempt to evade tax)
  • Section 276D, Income Tax Act, 1961 (Failure to comply with notice)
  • Section 277, Income Tax Act, 1961 (False statement in verification)
  • Section 220, CrPC (Trial for more than one offence)
  • Section 300, CrPC (Double jeopardy)
  • Article 20(2), Constitution of India
  • Section 71, IPC
  • Section 26, General Clauses Act

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2020:DHC:3376/BSI24112020CRLW34862018_141211.pdf

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