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TMI Blog2007 (3) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... C, 277 and 278B of the Income-tax Act, 1961 (for short "the Act"). 2 The Deputy Commissioner of Income-tax, Circle-16(3), Hyderabad, filed the above complaint. The first petitioner is M/s. Prabhava Organics Private Limited and the second and third petitioners are the managing director and director of the said company respectively. They were in-charge and responsible for the day-to-day affairs and conducting the business. The first Petitioner-company, filed its income-tax return for the assessment year 1995-96 mentioning that the total income of the company is "nil", after adjusting the brought forward losses of the earlier years to an extent of Rs. 34,74,157. While processing the return of the first petitioner-company under section l of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on January 23, 2006, confirming the levy of penalty of Rs. 3,54,200 ordered by the Assessing Officer. Therefore, the present complaint has been filed under sections 276C, 277, 278B of the Act to punish the petitioners according to law. The petitioners, being aggrieved by the court below taking cognizance the alleged offences, filed the present criminal petition under section 482 of the Cr- P. C. to quash the proceedings. 4 In the present quash petition, learned for the petitioners contended that the first petitioner is a private limited company incorporated under the Indian Companies Act. It is engaged in the manufacture of hulk drugs, chemicals and intermediataries. Its factory is located at Bollarum on the outskirts of Hyderabad and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the petitioners the point for consideration is whether the proceedings against the petitioners in C. C. N 83 of 2006 on the file of the Special Judge for Economic Offences, Hyderabad are liable to be quashed ? 6 The filing of the return by the first petitioner-company for the assessment year 1995-96 is not disputed. The company had shown the income for the said year as "nil" on account of the unsecured loans obtained by them to a tune of Rs. 13,81,900. Out of them, three loans were found to be genuine and four loans to a tune of Rs. 7,70,000 does not appear to be genuine. Therefore, the said amount was added to the income of the petitioners and the assessment order has been passed imposing a minimum penalty on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items of purchases were inflated and as such there was no proof that the assessee had concealed the income or furnished inaccurate particulars and cancelled the penalty. Thereupon, the assessee filed a writ petition to quash the criminal proceedings. The Punjab and Haryana High Court, after considering the material held as under (headnote) ".. in view of the finding of the Tribunal that there was no concealment and no inaccurate accounts were filed by the petitioners, the criminal proceedings against the assessee could not continue and were liable to be quashed." 9. In Uttam Chand v. ITO [1982] 133 ITR 909, the Supreme Court observed that a firm was assessed for several years as a registered firm. For the assessment year 1969-70, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pendency of the proceedings before the Tribunal is not a bar, I hold that the prosecution is maintainable during pendency of the appeal before' the Income-tax Appellate Tribunal, but the continuation of the prosecution depends on the judgment of the Income-tax Appellate Tribunal. It is for the Tribunal to give a decision whether the order passed by the Assessing Officer is correct or not. If the Income-tax Appellate Tribunal gives a judgment in favour of the petitioners, the prosecution may not be maintainable 11 In the light of the above circumstances, the proceedings against the petitioners in C. C. No. 83 of 2006 on the file of the Special Judge for Economic Offences, Hyderabad, are not liable to be quashed during pendency of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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