High Court Of Patna
Kailash Stone Works & Ors. vs. State Of Bihar & Ors.
Sections 276C, 277
Asst. Year 1990-91
R.N. Sahay, J.
Crl. Misc. No. 6542 of 1993
1st July, 1998
None, for the Petitioners : S.K. Sharan, for the Respondent
R.N. SAHAY, J. :
By the impugned order dt. 15th March, 1993, in Complaint Case No. 26 of 1993, the Special Court of Economic Offences, Dhanbad, has taken cognizance against the petitioners under ss. 276C & 277 of the IT Act, 1961.
2. Petitioner No. 1, Kailash Stone Works, is a registered firm at Pakur in the district of Sahebganj and the other petitioners are its partners. The petitioners derive income from manufacture and sale of stone chips. On 30th Nov., 1990, the petitioners filed a return showing a total income of Rs. 2,32,090 for the asst. yr. 1990-91 and a revised return on 16th Jan., 1991, showing a total income of Rs. 1,94,450. The assessment was completed under s. 143(3)/182(1) on total income of Rs. 3,01,800. In the course of scrutiny of accounts, the AO found that on sale of Rs. 52,52,896, G. P. of Rs. 10,63,631 has been shown which works out to 20.36 per cent On the basis of the order of the CIT(A) in the asst. yr. 1988-89, the G. P. rate was taken at 21.6 per cent and the resultant addition of Rs. 34,476 was made in trading account. It is further noticed that the petitioners had claimed expenses under the head general charges Rs. 59,270, printing and stationery Rs. 39,897, travelling expenses Rs. 79,872 and canteen expenses Rs.86,763. Examination of the account books revealed that no proper vouchers were maintained.
The complaint was filed by the ITO, Deoghar, before the Special Court of Economic Offences, Dhanbad. The complaint petition also mentioned that the penalty proceeding under s. 271(1)(c) has also been initiated. According to the complaint petition, the petitioners had wilfully attempted to evade tax, interest or penalty chargeable by deliberately concealing the true particulars of income and the petitioner, Rochal Das, had wilfully made a statement in the verification of the return which was false and as such the petitioners had committed an offence under ss. 276C and 277 of the IT Act, 1961.
As stated earlier, penalty proceeding was also started against the petitioners. The ITO levied penalty of Rs. 83,000 for concealment of income. On appeal filed by the petitioners, the CIT(A) by his order dt. 16th Oct., 1992, cancelled the penalty levied for concealment of income and allowed the petitioners’ appeal vide Annexure-4. The CIT(A) found that there was no concealment of income and the order of the AO to the contrary was wrong and it was cancelled.
It appears that against the said order passed by the CIT(A), the Revenue filed appeal before the Tribunal. The Tribunal by order dt. 24th Nov., 1995, dismissed the Revenue’s appeal.
Since the penalty imposed by the ITO was set aside by the CIT(A) and affirmed by the Tribunal, the prosecution against the petitioners is wholly unwarranted and is accordingly quashed. This application is accordingly allowed and the order dt. 15th March, 1993, passed in Complaint Case No. 26 of 1993 is hereby quashed.
[Citation: 236 ITR 876]