High Court Of Punjab & Haryana
Sudarshan Jain vs. Assistant Commissioner Of Income Tax
Section 276CC
Asst. Year 1983-84
Satish Kumar Mittal, J.
Crl. M. No. 6373-M of 2002
15th April, 2004
Counsel Appeared :
Akshay Bhan with Varun Gupta, for the Petitioner : R.P. Sawhney & Kishan Singh, for the Respondent
JUDGMENT
Satish Kumar Mittal, J. :
The petitioner has filed the instant petition under s. 482 of the CPC for quashing of the complaint (Annex. P5) filed against her by the Asstt. CIT (respondent herein) under s. 276CC of the IT Act, 1961 (hereinafter referred to as “the Act”), for not furnishing her return of income for the asst. yr. 1983-84 within the statutory period.
2. The assessing authority issued notice to the petitioner under ss. 143(2) and 142(1) of the Act requiring her to furnish the details of the income. Thereafter, the assessing authority vide its order dt. 31st Dec., 1985, made certain additions for the asst. yr. 1983-84 while disbelieving certain facts stated by the petitioner. In respect of the said addition, the assessing authority vide its order dt. 31st Dec., 1987 (Annex. P2), imposed a penalty upon the petitioner under s. 271(1)(a) of the Act. Aggrieved against the said order of penalty, the assessee filed an appeal before the CIT(A), who vide his order dt. 27th Jan., 1988, dismissed the same. Aggrieved against the said order, the petitioner preferred the second appeal before the Tribunal. The said appeal was allowed by the Tribunal vide order dt. 26th Aug., 1992, and the penalty imposed upon the petitioner by the assessing authority was deleted. Against the said order of the Tribunal, the CIT, Patiala, filed an application under s. 256(1) of the Act for reference of the case to the High Court. The said application was dismissed by the Tribunal vide its order dt. 10th May, 1993 (Annex. P6).
3. During the pendency of the aforesaid proceedings before the appellate authorities, the respondent filed a complaint against the petitioner in the Court of Chief Judicial Magistrate, Ludhiana, under s. 276CC of the Act for not furnishing her return of income for the asst. yr. 1983-84 within the statutory period.
4. Now the petitioner has filed the instant petition for quashing of the aforesaid complaint on the ground that once the order of penalty itself has been set aside, then continuation of the criminal proceedings in such a case is an abuse of the process of Court and the same is liable to be quashed.
5. Learned counsel for the petitioner contends that this petition is squarely covered by the decisions of the Hon’ble Supreme Court in G.L. Didwania vs. ITO (1997) 140 CTR (SC) 273 : (1997) 224 ITR 687 (SC) and K.C. Builders vs. Asstt. CIT (2004) 186 CTR (SC) 721 : (2004) 265 ITR 562 (SC). In the aforesaid judgments, it has been held that if in appeal the order of penalty is set aside by the appellate authority or the Tribunal, while setting aside the finding recorded by the assessing authority about the making of false statement in respect of the IT return, then the criminal proceedings launched on the same ground can no longer be sustained. It has been also held that levy of penalties and prosecution under s. 276C of the Act are simultaneous. Hence, once the penalties are deleted on the ground that there is no concealment, the quashing of prosecution under s. 276C is automatic. The assessee cannot be made to suffer and face the rigours of criminal trial when the same cannot be sustained in the eye of law because the entire prosecution in view of a conclusive finding of the appellate authority/Tribunal that there is no concealment of income becomes devoid of jurisdiction. Once the finding of concealment and subsequent levy of penalties under s. 271(1)(c) has been struck down by the Tribunal, the assessing authority has no other alternative except to correct his order under s. 154 of the Act as per the directions of the Tribunal. It was further held that even if the charge has been framed and the matter is at the stage of prosecution evidence, the criminal prosecution is liable to be quashed because if the trial is allowed to proceed further after the order of the Tribunal, it will be an idle and empty formality to require the assessee to have the order of the Tribunal exhibited as a defence document.
6. Learned counsel for the respondent could not dispute the aforesaid factual and legal position and almost conceded that the case of the petitioner is covered by the aforesaid decisions of the Hon’ble Supreme Court.
7. In view of the aforesaid, this petition is allowed and the complaint (Annex. P5) filed against the petitioner under s. 276CC of the Act and all the consequential proceedings are hereby quashed.
[Citation : 270 ITR 312]
