Opportunity of Hearing Mandatory Before Cognisance Under BNSS | HC

Case Details: B. Siva vs. Deputy Commissioner of Income tax [2026] 187 taxmann.com 374 (Madras)

Judiciary and Counsel Details

• A.D. Jagadish Chandira, J.
• Abudukumar Rajaratnam, Sr. Counsel & K.R. Ramesh Kumar for the Petitioner. 
• Ms M.Sheela, Sr. Standing Counsel (I.T.Dept.) & H. Siddarth, Jr. Standing Counsel (I.T. Dept.) for the Respondent.

Facts of the Case

The assessee inflated their bottle purchases by obtaining bogus invoices from various firms. The modus operandi was that, upon receipt of payment, the accused returned the corresponding amount in cash after deducting their commission for providing bogus bills.
The Income-tax Department conducted a search on the accused and after complying with the other required formalities as required under the Income Tax Act, 1961, including issuance of a show cause notice to the accused, which was not responded to, and getting sanction of the Principal Commissioner of Income Tax under Section 279(1) of the IT Act for prosecuting the accused, lodged complaints against the accused before the Trial Court under Sections 277A and 278 of the IT Act.
The Court of Additional Chief Metropolitan Magistrate (Economic Offences-1), Egmore, Chennai, took the complaints on file and ordered the issuance of summons and directed the listing of the matters. The assessee did not challenge the allegations on the merits. Instead, he challenged the order by which the Trial Court took cognisance of the criminal complaints. The matter reached before the Madras High Court.

High Court Held

The High Court held that even though the investigation and the obtaining of a sanction for prosecution were concluded before the kicking in of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), the filing of the complaints and taking of cognisance of the offences were subsequent to the BNSS kicking in. Hence, only the provisions of the BNSS would be applicable for the ‘inquiry’, i.e., cognisance, by the Trial Court.
In the case of Parvinder Singh v. Directorate of Enforcement (2026) 186 taxmann.com 806 (SC), it was also held that non-compliance with Section 223(1) of the BNSS is not merely an irregularity but an illegality that would vitiate the proceedings. Thus, the contention of the Income-tax Department that the accused was heard before the BNSS came into force and thus, there is no need to hear him again, cannot be accepted.
The impugned adjudications wherein cognisance has been taken without affording an opportunity to the accused are liable to be set aside, and they are, accordingly, set aside, and the matter is remitted to the Trial Court for affording an opportunity of hearing to the accused.

List of Cases Reviewed

• State of Uttar Pradesh v. Singhara Singh AIR 1963 SC 358 (para 17)
• Competent Authority v. Barangore Jute Factory (2005) 13 SCC 477 (para 17)
• Parvinder Singh v. Directorate of Enforcement [2026] 186 taxmann.com 806 (SC) (para 22) followed
• Kushal Kumar Agarwal v. Directorate of Enforcement [2025] 174 taxmann.com 1212 (SC) /2025 SCC OnLine SC 1221, Kaberi Dey v. Sourav Bhattacharjee [2025 SCC OnLine Cal 5928], Sashidhar Jagdishan v. State of Maharashtra [2025 SCC OnLine Bom 2928] (para 18) distinguished

List of Cases Referred to

• B. Premanand v. Mohan Koikal [2011] 3 taxmann.com 952 (SC) (para 7)
• Krishna Mohan Medical College and Hospital v. Union of India (2017) 15 SCC 719 (para 8)
• Kushal Kumar Agarwal v. Directorate of Enforcement [2025] 174 taxmann.com 1212 (SC) (para 9)
• Kaberi Dey v. Sourav Bhattacharjee [2025 SCC OnLine Cal 5928] (para 9)
• Sashidhar Jagdishan v. State of Maharashtra [2025 SCC OnLine Bom 2928] (para 9)
• Competent Authority v. Barangore Jute Factory (2005) 13 SCC 477 (para 17)
• State of Uttar Pradesh v. Singhara Singh AIR 1963 SC 358 (para 17)
• Parvinder Singh v. Directorate of Enforcement [2026] 186 taxmann.com 806 (SC) (para 22)