Published on : 24 Sep 2025, 11:23 am 3 min read

The Delhi High Court recently held that the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) prevail over the Income Tax Act, 1961 (IT Act) [Asst. Commissioner of Income Tax v. State & Ors] .

Thus, the Court ruled that proceeds of crime can in no way be termed as the income of an accused when the trial in the PMLA case is incomplete.

“The embezzled money by the Director of a Company cannot constitute a benefit of pre-requisite obtained from the Company and cannot be called his income. In the present case, the money is the defrauded/embezzled amounts of innocent investors acquired by the Accused through illegal means. These funds would not come within the income of the Accused,” the Court stated.

Justice Neen

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