The Assessee’s returns were completed, but information received under the Indo-France DTAA alleged undisclosed HSBC (Suisse) accounts. A search under Sec. 132 yielded no incriminating material, yet reassessment/additions were made, and criminal complaints were filed.

The Assessee argued the DTAA material was unauthenticated and unverified (not obtained from Swiss primary sources) and there was no independent corroboration linking him to any Swiss account. Since no incriminating material was found in the search and the Hon’ble Tribunal had set aside the assessment additions, the basis for prosecution did not survive. The Assessee also contended that insisting on a “Consent Waiver Form” to seek Swiss information was a roving enquiry and refusal to sign could not be treated as evidence of guilt; there was no material showing willful tax evasion. The Revenue argued that the absence of recovery in search is not decisive, that assessment outcomes do not bind criminal courts, and that the Hon’ble Tribunal’s order was only on jurisdiction/technical grounds (no incriminating material) rather than merits. Revenue also claimed that  to sign the waiver and non-compliance with s. 142(1) notices constituted separate offences. The Hon’ble Delhi High Court quashed both complaints, holding there was no credible corroborative evidence establishing the essential ingredients of Sec. 276C (1)(i), 276D and 277(1). The case rested on unauthenticated DTAA inputs with no incriminating recovery, and non-signing of the consent waiver, on such inputs, could not justify criminal prosecution.(AY. 2006-07, 2007-08]