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TMI Blog2007 (12) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... GMENT 1. S. C. Vyas, J - By this petition filed under S. 482 of the Code of CriminalProcedure the order dated 25.7.05 passed by Chief Judicial Magistrate Ratlam in criminal case No. 15 of 1996 and order dated 14.7.06 passed by IIIrd Addl. Sessions Judge Ratlam in criminal revision No.180 of 05 are called in question with a prayer to quash these orders and to quash the proceedings of criminal case No.13 of 1990 which is pending in the court of Chief Judicial Magistrate against the present petitioners under Secs. 276-C, 277 read with 278 B of the Income Tax Act 1961. ( Hereinafter referred to as the 'Act' ) 2. Short facts of the case are that a private complaint at the instance of Income Tax Officer Ratlam under S. 276-C, 277 read wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year before the CIT (Appeals) on 21.5.85 who has confirmed the addition. On 17.3.1986 ITO levied the penalty of Rs.22, 226/- under S. 271 (1)(c) of the Act. On 21.10.1988 CITA confirmed the levy of penalty. Petitioners further preferred an appeal before ITAT who vide its order dated 13.8.1993 set aside the order of levied penalty and found that addition was made on the basis of mere estimate wherefrom it can not be positively said that there was concealment of income. The stock could be known at the time of survey. The assessee furnished return of income when it was due. The assessee had come with certain explanation which could not be said lacking bona fide. No penalty is therefore leviable and has been deleted. 5. Learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to be allowed and prosecution of present petitioners should be quashed in the light of above referred decision of Apex Court reported in the matter of KC Builders (supra) [2004] 265 ITR 562. 8. Some other features of the case are also required to be mentioned here. This is not the first round of litigation before this court. Earlier also the matter has come up twice in the form of petition under S. 482 of the Code which was withdrawn by petitioners with liberty to take action before appropriate forum. Thereafter petition under Article 226/227 of the Constitution of India was filed for quashment of the proceedings. The petition was heard and decided by learned Single Judge on 30.10.1998 and it was observed in para 8 that Tria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the stage of S. 245 (2) of the Code has already been passed and charges have been framed, therefore, the court can only consider the matter on merits after recording evidence. The revisional court also confirmed the said order of trial court and while doing so the Judgment of KC Builders (supra) was considered and observed that as the charge of S. 277 of the Act is also there against the petitioners and stage of S. 242 has already passed, therefore, the charge could not be quashed by the Trial Court and courts does not possess the inherent powers available under S.482 of the Code. But that hardly makes a difference if a wrong section of the Code was quoted in the application even; then, the Trial Court as well as the Revisional Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 271 (1)(c) of the Act has been struck down by the Tribunal, the AO has no other alternative except to correct his order under s. 154 of the Act as per the directions of the Tribunal. As already noticed, the subject matter of the complaint before this Court is concealment of income arrived at on the basis of the finding of the AO. If the Tribunal has set aside the order of concealment and penalties, there is no concealment in the eyes of law and, therefore, the prosecution cannot be proceeded with by the complainant and further proceedings will be illegal and without jurisdiction. The Asstt. CIT cannot proceed with the prosecution even after the order of concealment has been set aside by the Tribunal. When the Tribunal has set aside the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een described as culpable. 13. In the matter of SC Gupta Vs. Union of India [1998 (1) MPLJ 49] this court also expressed the similar view and prosecution launched under S. 276(1) (c), 277 and 278 of the Act against all the petitioners was quashed on the ground that Tribunal in appeal deleted the penalty holding that there was no concealment of income on the part of assessee. Similar view has also been expressed in the matter of G.L. Didwania and anr. Vs. I.T.O and anr. [ 1997 (224) ITR 687] 14. In view of aforesaid discussions, the petition succeeds and is allowed. The impugned orders passed by trial court as well as by revisional court are hereby set aside and prosecution of the petitioners in criminal case No.13 of 90 pend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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