High Court Of Patna
Satyanarain Prasad & Ors. vs. State Of Bihar & Anr.
Sections 276C, 277
Asst. Year 1990-91
N. Rai & D.P.S. Choudhary, JJ.
Crl. Misc. No. 7189 of 1993
18th March, 2000
BY THE COURT :
The petitioners have filed the present application for quashing the order dt. 18th March, 1993, passed by the Special Subordinate Judge, Economic Offences, Patna, taking cognizance of the offence under ss. 276C and 277 of the IT Act, in Complaint Case No. 31(C) of 1993. Opposite party No. 2, Asstt. CIT, Arrah, filed a complaint petition before the Special Court, Economic Offences, Patna, stating, inter alia, that the firm of M/s Satya Narain Pd. Bhola Prasad is a registered firm and derives income from the sale of mustard oil, vegetable oil, sugar and maida, etc. The petitioners are the partners of the said firm and having share in the profit and loss of the business, they are equally responsible for every act and business of the firm. On 30th Oct., 1990, they filed return showing a total income of Rs. 1,04,807 for the asst. yr. 1990-91. However, the assessing authority, computed the assessment on a total income of Rs. 6,74,722, under s. 143 (3)/182(1) of the Act. It transpired during the assessment proceeding that the investments made over the purchase of drafts were concealed by the petitioners and as such a proceeding under s. 271(1)(c) of the Act was initiated against them for concealment of income. Accordingly, the complaint was filed for their prosecution for the aforesaid two offences.
It is the admitted position now that the order of the assessing authority has been set aside by the Tribunal, Patna Bench, Patna, vide its order dt. 12th Aug., 1997, in ITA No. 524/Pat/1994. The result is that the finding given by the assessing authority about the concealment of income by the petitioners has been set aside by the Tribunal.
The law is well settled now that when the grounds for addition of income are not accepted by the Tribunal and the order of the assessing authority, on the basis of which the complaint was filed, is not accepted, then the prosecution will be an abuse of the process of the Court and it should not be allowed to continue. Reference in this connection may be made to the cases of Uttam Chand vs. ITO (1982) 133 ITR 909 (SC) : TC 48R.304; P. Jayappan vs. S. K. Perumal, First ITO (1984) 42 CTR (SC) 180 : (1984) 149 ITR 696 (SC) : TC 48R.501 and G.L. Didwania vs. ITO (1997) 140 CTR (SC) 273 : (1997) 224 ITR 687 (SC) TC S48.3888, Thus, in view of the order of the Tribunal, setting aside the order of the assessing authority in this case, the prosecution of the petitioners under the aforesaid two sections is not sustainable in law. Accordingly, the order taking cognizance against the petitioners is hereby quashed.
This application is accordingly allowed.
[Citation : 255 ITR 584]