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TMI Blog2006 (9) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... ADAR DURREZ AHMED J.— 1. This revision petition is preferred by the Income-tax Department being aggrieved by the order dated July 5, 2005, passed by the learned Additional Sessions Judge. The impugned order arose in a revision petition which was filed on behalf of the assessees, M/s. Giggles (P.) Ltd. who are the respondents herein, against the order dated March 21, 2005, passed by the learned ACMM, Delhi. The order dated March 21, 2005, came to be passed on an application for discharge moved by the accused persons. In the application the accused had taken the plea that the Income-tax Appellate Tribunal had deleted the penalty sought to be imposed on the accused under section 271(1)(c)(iii) of the Income-tax Act, 1961 (hereinafter referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase by the trial court would be an exercise in the futility and as such, the learned Additional Sessions Judge directed that trial court should not proceed with the matter till the decision of the High Court in the appeal preferred by the Department. 3. Mr. Awasthi, who appears on behalf of the Income-tax Department, submitted that this order passed by the learned Additional Sessions Judge was not tenable in law inasmuch as penalty proceedings under section 271(1) (c) and the criminal liability under section 276 C, read with section 278B of the said Act were independent and the pendency of the proceedings under section 271(1) (c) could not be taken as a ground to stay the proceedings under section 276C read with section 278B of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alal [2001] 248 ITR 830 (SC); [2001] II AD 548 (SC) were that the trial court, considering the criminal proceedings, had passed an order permitting the trial court to go on but staying the passing of the order with regard to framing of charge, discharge of accused or acquittal of the accused during the pendency of the appeals preferred by the accused in that case before the income-tax appellate authorities. Against that order, revision petitions were filed before the Sessions Court, which did not interfere with the orders of the trial court. Thereafter, the matter was carried further to the High Court and the High Court, while entertaining a writ petition, granted an interim order staying the proceedings in the criminal cases filed before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had not been claimed by the accused. 7. The other case cited by counsel for the respondents, namely, that of K. C. Builders [2004] 265 ITR 562 (SC) is clearly on the point that the proceedings under section 271(1) (c) of the said Act would have a bearing on those under section 276C of the said Act. The Supreme Court, after considering the provisions of the said sections, observed (page 573) "In the instant case, the penalties levied under section 271(1) (c) were cancelled by the respondent by giving effect to the order of the Income-tax Appellate Tribunal in I. T. A. Nos. 3129-3132. It is settled law that levy of penalties and prosecution under section 276C are simultaneous. Hence, once the penalties are cancelled on the ground th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal has set aside the levy of penalty, the criminal proceedings against the appellants cannot survive for further consideration. In our view, the High Court has taken the view that the charges have been framed and the matter is in the stage of further cross-examination and, therefore, the prosecution may proceed with the trial. In our opinion, the view taken by the learned Magistrate and the High Court is fallacious. In our view, if the trial is allowed to proceed further after the order of the Tribunal and the consequent cancellation of penalty, it will be an idle and empty formality to require the appellants to have the order of the Tribunal exhibited as a defence document, inasmuch as the passing of the order as aforementioned is unsus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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