THE Delhi High Court has dis missed the writpetition filed by Saumya Chaurasia, former Deputy Secretary to ex-Chief Minister Bhupesh Baghel, thereby upholding the Income Tax Department’s decision to prosecute her in an alleged Rs 348 crore tax evasion case. The Bench of Justice V Kameswar Rao and Justice Vinod Kumar held that the prosecution sanction granted by the Principal Commissioner of Income Tax (PCIT) was valid and E X CLUSIVE that Central Board of Direct Taxes (CBDT) Circular No. 5/2020, which allows prosecution even before penalty confirmation by the Income Tax Appellate Tribunal (ITAT), does not offend Article 14 of the Constitution. The Court observed that the intent behind the circulars was to ensure that only serious, high-value cases are prosecuted while smaller matters await appellate confirmation.

 

Chaurasia’s residence in Bhilai was searched in 2020 during a tax investigation into alleged unaccounted income linked with business transactions across State. The case was later centralised in Delhi, and assessment orders covering eight financial years from 2011-12 to 2022-23 raised an aggregate demand exceeding Rs 348 crore. Meanwhile, she faced parallel investigations by ED and SEOIACB in connection with the alleged coal levy and liquor policy cases during the previous government’s tenure. She was arrested in 2022 and later granted interim bail by the Supreme Court in 2024. The PCIT’s sanction authorised her prosecution under Sections 276C (wilful attempt to evade tax) and 278E (presumption of culpable mental state) of the Income Tax Act.

 

Arguing through Senior Advocate Balbir Singh, Chaurasia claimed that prosecution should begin only after penalty confirmation by the ITAT and that the sanction orders lacked reasoning.Her petition further asserted that the CBDT circulars were arbitrary, gave unrestrained discretion to tax officials, and were violative of Article 14. She also contended that additions to her income were based merely on loose papers seized during the search and were not adequate for criminal prosecution. Rejecting these contentions, the High Court held that in search and survey cases under Sections 132, 132A and 133A, prosecution may be initiated at any stage with prior approval of the PCIT.

 

The Bench noted that the magnitude of the alleged evasion justified immediate action and that no ITAT confirmation or collegium approval was required before hand. The Court described CBDT Circular 5/2020 as a rea sonable administrative measure designed to fast track proceedings in major evasion cases. The Bench further ruled that the circulars were neither manifestly arbitrary nor unconstitutional and that they draw a rational distinction between minor and major offences. It said that factual disputes, including the evidentiary value of seized papers, must be decided.