2004 (7) TMI 65 - HC - Income Tax

Prosecution criminal proceedings - pendency of appeal - cognizance against the petitioner under sections 276C and 276CC petitioner submitted that the petitioner had preferred an appeal against the order of assessment which is pending before the statutory appellate authority. Petitioner has submitted that during the pendency of the statutory appeal, filing of complaint case is not justified. Held that soon after the passing of the assessment order the prosecution should not be launched if the matter is pending in appeal. Further action may be taken only if the appeal is dismissed in whole or in part. If the appeal is allowed and the findings of the Assessing Officer are set aside there can be no justification for the initiation of criminal proceedings - Trial court is directed not to proceed with the complaint case pending in the court of the Special Judge, Economic Offences till the disposal of the appeal by the appellate authority.

Summary

Issues: Quashing of order under sections 276C and 276CC of the Income-tax Act, 1961 during pendency of appeal.

Analysis:
The judgment delivered by the High Court of Patna, under the supervision of Judge Smt. Mridula Mishra, revolves around the quashing of an order dated September 14, 2001, passed by the Special Judge, Economic Offences, Patna, in Complaint Case No. 184(C) of 2001. The petitioner had appealed against the assessment order, which is currently pending before the statutory appellate authority. The counsel for the petitioner argued that during the pendency of the appeal, launching a complaint case is unjustified, citing previous directions of the court in similar matters. The court has consistently held that prosecution should not commence immediately after the assessment order if the matter is under appeal. Criminal proceedings should only be initiated if the appeal is dismissed, and not if the findings of the Assessing Officer are set aside upon appeal.

The High Court, in this case, directed the trial court not to proceed with the complaint case until the appeal is disposed of by the appellate authority. It was emphasized that after the appeal's conclusion, the opposite party should act in accordance with the law and consider the order passed in the appeal. Both parties were granted the liberty to approach the trial court post the appeal's disposal. Consequently, the application was allowed with the specified directions, ensuring that the trial court refrains from advancing the complaint case until the appeal reaches a resolution. This comprehensive analysis of the judgment highlights the importance of due process and the need for alignment between civil and criminal proceedings in matters concerning tax assessments under the Income-tax Act, 1961.