1999 (10) TMI 58 - HC - Income Tax

Offences And Prosecution Wilful Attempt To Evade Tax False Verification Criminal Prosecution

Summary

Issues:
Application under section 482 of the Criminal Procedure Code to quash criminal proceedings initiated by the Income-tax Department based on undisclosed income allegations.

Analysis:
The petitioner, a partnership firm with multiple partners, filed a return for the year ending August 31, 1980, which was subsequently revised but not accepted by the Income-tax Officer. The total income computation included a sum of Rs. 82,000 as received by the assessee from certain persons. The Income-tax Officer accepted the explanation for some amounts but treated Rs. 82,000 as undisclosed income. The Commissioner of Income-tax (Appeals) later deleted this amount, but the Income-tax Appellate Tribunal reversed the decision, leading to the criminal complaint under sections 276C and 277 of the Income-tax Act, 1961.

The main ground for seeking the quashing of the complaint was the lack of disclosure of any offense. The petitioner argued that since the Tribunal's order was reversed, there was no basis for prosecution. The complaint did not specify the alleged false statements or tax evasion beyond the Rs. 82,000 addition. The authorization for prosecution under section 279 of the Income-tax Act must contain the facts constituting the offense, as per legal precedent. As the Rs. 82,000 addition was deleted by the court, no other offense remained in the complaint.

After hearing arguments from both sides and examining the case's facts, the court found no basis for prosecuting the petitioner for the alleged Rs. 82,000 addition in the total income. The complaint did not mention any other offense under the Income-tax Act, leading to the quashing of the proceedings in Case No. 316(C) of 1992 pending before the Chief Judicial Magistrate, Kamrup.