Whether FIR against Commissioner of Income-tax (a public servant) on account of  disproportionate assets u/s 13(1)(e) of Prevention of Corruption Act can be quashed under Article 226 of Constitution?

This was the issue before Hon’Ble Supreme court in the case of CBI Vs T H Vijayalakshmi & Another. In this case, the respondent was CIT and her husband (another respondent) was a sitting MLA and Minister in the State Government of Andhra Pradesh.

Hon’ble Supreme Court was dealing with the CBI’s appeal against the setting aside of FIR by high court.

The Apex Court considered in detail the powers of the high court in cases where FIR was registered under Section 482 of CR. PC and also meaning of known sources of income.

It observed that the expression “known sources of income” in Section 13(1)(e) of the Act has two elements.

First, the income must be received from a lawful source and secondly, the receipt of such income must have been intimated in accordance with the provisions of law, rules or orders for the time being applicable to the public servant.

The CBI argued that the documents which gave rise to the “source information” were seized during another case being investigated by the appellant where the first respondent was one of eight officers of the Income Tax department accused of taking benefits (such as hotel stays) from Chartered Accountants.
The court considered in detail various constitution bench decisions and finally set aside the order of the High Court and relegated the officer to CBI.

An important observation in this judgement is the act of Chartered accountants in arranging hotel stays for the Commissioner of Income-tax.

 

Whether FIR against Commissioner of Income-tax (a public servant) on account of disproportionate assets u/s 13(1)(e) of Prevention of Corruption Act can be quashed under Article 226 of Constitution?