1994 (11) TMI 95 - HC - Income Tax

Summary

Issues:
1. Stay of criminal proceedings during the pendency of appeal before the Income-tax Appellate Tribunal.

Analysis:
The judgment pertains to two cases where the petitioners filed appeals before the Income-tax Appellate Tribunal against the additions made by the Income-tax Officer and penalties imposed. The petitioners contended that criminal prosecution should not proceed while the appeals are pending. The court noted that the petitioners did not seek to quash the criminal proceedings but requested a stay until the appeal is decided by the Tribunal.

The counsel for the petitioners cited previous court orders where criminal proceedings were stayed in similar circumstances. However, the counsel for the Union of India referred to the case of P. Jayappan v. S. K. Perumal, emphasizing that prosecution cannot be quashed merely due to pending tax law proceedings. Another case, Ananda Fabrics v. Asst. CIT, was mentioned where the Madras High Court held that criminal proceedings should not be quashed or stayed solely due to pending appeals before the Tribunal.

The court highlighted that the petitions sought only a stay of criminal proceedings without alleging any illegality in the proceedings. The counsel for the petitioners cited various cases where stay orders were granted, but the court noted that the case of P. Jayappan v. S. K. Perumal was not brought to its attention in a previous case where a similar application was dismissed.

Ultimately, the court dismissed both applications filed under section 482 of the Criminal Procedure Code, emphasizing that the mere pendency of appeals before the Tribunal does not warrant a stay of criminal proceedings, especially when no illegality in the proceedings was alleged.

This judgment underscores the principle that criminal proceedings should not be automatically stayed due to pending tax appeals, highlighting the importance of specific allegations of illegality in the proceedings to justify a stay. The court's decision was based on the legal precedents cited and the lack of grounds to support the requested stay in the absence of any identified irregularities in the criminal proceedings.