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TMI Blog2001 (6) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... Those documents disclosed that the various amounts from the account of the companies were withdrawn under the guise of pay and allowance to be paid to their employees and thereby, inflated the expenditure of the companies, which are arrayed as accused No. 1 in order to suppress the real income of the companies. The directors of the companies obtained false vouchers from their employees, the other accused, as though they were paid pay and allowance for a higher amount, whereas in reality they were paid only a paltry sum for signing such false vouchers. On the basis of those vouchers, the companies' account books also were fabricated, thereby the companies and their directors attempted to evade income-tax leviable on the real income of the companies with active abetment and assistance of the other accused, namely, the employees who signed the false vouchers. Thus, all the accused persons committed the offences under sections 120B, 193, 196, 420, 511 and 34 of the Indian Penal Code, 1860 and sections 276C, 277 and 278 of the Income-tax Act, 1961." The petitions for quashing have been filed raising the grounds as given below: One of the petitioners, viz., Mrs. Indira D. Kothari, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hari in her individual assessment. Therefore, the finding given in the order relating to the individual assessment would not be applicable to the company against whom the complaints were filed. Moreover, the finding given in those orders by the Settlement Commission will not have any bearing on the allegations contained in the complaint. Furthermore, even in the individual assessment, no immunity has been granted in regard to the prosecution proceedings. The orders passed by the Settlement Commission and the orders of the Tribunal will have no impact on the trial of the complaint, as the offences alleged in the complaint basing on the seized materials are independent of assessment proceedings or the orders passed by the Settlement Commission and the Tribunal. Hence, the petitions for quashing are liable to be dismissed. Dealing with the above submissions, Mr. N. T. Vanamamalai, learned senior counsel appearing for the petitioners, and Mr. Ramasamy, learned Special Public Prosecutor for the Income-tax Department, the respondent, have argued in detail and at length. Mr. N. T. Vanamamalai, learned senior counsel for the petitioners, would cite the following authorities in support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income-tax authority are not binding on the criminal court, due regard should be given to the order passed by the income-tax appellate authority. The finding of fact given by the Tribunal has to be respected by the criminal court unless the court takes the view that the Tribunal had erred in law in arriving at the finding of fact. Otherwise, the conclusion on the question of fact arrived at by the Tribunal cannot be disturbed by the criminal court, since the findings of the Income-tax Appellate Tribunal on the facts are final. The criminal court has to give due regard to the result of any proceedings under the Income-tax Act having a bearing on the question in issue. In appropriate cases, it may drop the proceedings in the light of the order passed under the Income-tax Act. Let us now see the principles laid down on this issue by this court as well as the Supreme Court in the decisions cited by the learned Special Public Prosecutor, appearing for the respondent: The fact that the Tribunal has passed an order of remand in the assessment proceedings would not be a bar to the prosecution for offences under the Income-tax Act. Mere expectancies should not stand in the wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he criminal court has to judge the case independently on the evidence and materials placed before the court. In the light of the above guidelines given by this court as well as the Supreme Court referred to in the various decisions mentioned above, let us now see the merits of the contentions urged by counsel for the parties. The core of the submission made by learned senior counsel appearing for the petitioners is that the order passed by the Settlement Commission and subsequent order by the Tribunal accepting the finding of the Settlement Commission and remanding the matter for reassessment and consequent reassessment order cancelling the earlier assessment order would necessarily nullify the complaint. Arguing contra, the order of the Settlement Commission and other consequent orders were not passed in the application filed by the company and as a matter of fact, the application filed by the companies were rejected by the Settlement Commission. Therefore, the orders relied upon by the petitioners would not be of any help to them to hold that the complaint is invalid. Furthermore, according to counsel for the respondent, the order passed by the Settlement Commission in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the finding which has been given in the Settlement Commission's order or in the Tribunal's order or in the subsequent order passed by the other authority has been given with reference to the allegations made in the complaint so as to have any impact on the trial. The following observations mentioned in the order of the Settlement Commission dated January 28, 1993 are said to be relied upon by counsel for the petitioners to substantiate his plea that the finding has already been given: "On a perusal of the copies of the seized documents, we find that the employees, whose names were indicated therein, were not fictitious persons, but were actually working with the group companies am there is no evidence to show that no payment was made to them as indicated in the seized documents. In the circumstances, the offer of additional income made by the four lady directors is accepted. This income will be added under the head 'Income from other sources'." A perusal of the above observation and the complaint in question would not indicate any finding given which has got a bearing or impact to the allegations made in the complaint. The so called finding as referred to above, would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment order or the subsequent order passed by the Commissioner of Income-tax would never give any finding with reference to the specific allegations made in the complaint. As indicated by this court as well as the Supreme Court, when there are allegations in the complaint constituting the prima facie case for wilful attempt to evade tax and other offences, the complaint cannot be quashed. As noted above, the orders passed by the Tribunal and other departmental authorities are not binding on the criminal court, especially when there is no finding of fact by them in respect of the allegations contained in the complaint. According to the prosecution, the offences mentioned in the complaint have to be tried by the criminal court and the opportunity has to be given to the complainant to prove the same. As pointed out by learned counsel for the respondent, there may be assessment order or reassessment order on the basis of the subsequent development or on the basis of the request made by the petitioners by the authorities concerned. But, that would not absolve the accused persons from the offences which had already been committed. As indicated above, there is no finding by any auth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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