Facts of the Case

The case arose from a Tax Evasion Petition (TEP) filed by Respondent No.1 (Rajiv Yaduvanshi) against private individuals alleging undisclosed income. The Income Tax Department initiated proceedings as per standard procedure.

Subsequently, Respondent No.1 filed an application before the ACMM seeking a status report on the investigation. The ACMM passed multiple orders directing the Income Tax Department to submit an Action Taken Report.

The Department challenged these orders before the Delhi High Court under Section 482 CrPC, contending that the ACMM lacked jurisdiction to issue such directions 

Issues Involved

  1. Whether a Magistrate (ACMM) has jurisdiction to call for a status report/action taken report from the Income Tax Department in absence of any pending proceedings.
  2. Whether subordinate courts possess inherent powers under CrPC similar to the High Court.
  3. Whether directions issued by the ACMM were without authority of law and jurisdiction.

Petitioner’s Arguments (Income Tax Department)

  • The ACMM exceeded jurisdiction by directing submission of status reports without any statutory backing.
  • No provision under CrPC permits such directions when no complaint or case is pending.
  • Only the High Court possesses inherent powers under Section 482 CrPC, not subordinate courts.
  • Reliance was placed on Syed Nusrat Ali v. State & Ors., which held that subordinate courts cannot exercise inherent powers.
  • Investigation details in tax evasion matters are confidential and cannot be disclosed, especially during ongoing proceedings.

Respondent’s Arguments (Rajiv Yaduvanshi)

  • The respondent sought only a status report on his complaint, claiming a right to know progress of investigation.
  • It was argued that the Income Tax Department is duty-bound to comply with court directions.
  • Alleged non-compliance by the Department justified further judicial directions and possible contempt proceedings.

Court Findings / Judgment

  • Subordinate courts do not have inherent powers under CrPC; such powers are exclusively vested in the High Court.
  • The ACMM failed to specify any statutory provision under which directions were issued.
  • There is no provision in CrPC or Income Tax laws permitting a Magistrate to call for a status report in such circumstances.
  • The ACMM acted beyond jurisdiction, effectively usurping powers of the High Court.
  • Disclosure of investigation details to informants is not permissible, especially during ongoing inquiries.

Accordingly, the Court set aside the impugned orders dated 24.09.2020, 05.10.2020, 21.10.2020, and 28.10.2020 and allowed the petition.

Important Clarifications

  • Inherent powers under Section 482 CrPC are exclusive to High Courts.
  • Magistrates cannot issue directions without specific statutory authority.
  • Tax Evasion Petition (TEP) investigations are confidential, and only broad outcomes may be shared after completion.
  • Judicial interference in ongoing investigations can be prejudicial and impermissible.
  • Sections Involved:
    • Section 482, Code of Criminal Procedure, 1973
    • Sections 49–55, Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2020:DHC:3189/SKT06112020CRLMM21402020_073401.pdf

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