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TMI Blog1997 (1) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... he partners had filed the income-tax return, on 10th July, 1981 action was taken under s. 133-A of the IT Act by the ITO, on the business premises of the petitioners. During the course of action one uchanti note book was recovered and found in the control and possession of the petitioners. It was impounded by the ITO. On the verification of the books of accounts maintained by the petitioners with the uchanti note book, it was found that sales to the tune of Rs. 20,788 and purchases to a stock of Rs. 7,655 had been made by the petitioners from 1st May, 1981 to 8th July, 1981. The same were not entered in the books of accounts. At the time of said action, the stocks of the petitioners were physically verified and checked. Their value was asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted any relevant entry or statement in the books of accounts. They had wilfully attempted to evade the books, penalty or interest chargeable under the IT Act. By not making the entries of sale and purchase in their books of accounts, the accused were bound to be in possession and control of books of accounts containing false entries. It was contended that they had committed the offence punishable under ss. 276C and 278 of the IT Act. In support of their case, evidence had been produced. Learned Chief Judicial Magistrate, Sirsa considered the pre-charge evidence and concluded that no case was made against the petitioners and that if unrebutted, it would not warrant their conviction. The accused-petitioners were discharged. The ITO file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised number of arguments but the respondents met its waterloo because of the subsequent events. It becomes unnecessary, therefore, to consider the other contentions. 5. The subsequent events are clear that while the present revision petitions were pending, the CIT and the Tribunal had held that additions and penalty on basis of which the prosecution had started, be deleted. The short question that comes up for consideration is as to whether in these circumstances, the prosecution proceeding should be quashed or not. Reference to some of the precedents in this regard would be in the fitness of things. In the case of Uttam Chand Ors. vs. ITO [1982] 133 ITR 909 (SC) : TC 48R.304 the registration of the partnership firm under the IT Act ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t relying upon the decision in the case of P. Jayappan vs. S.K. Perumal, ITO [1984] 42 CTR (SC) 180 : [1984] 149 ITR 696 (SC) : TC 48R.501, held that it is unnecessary to continue with the criminal complaint and the proceedings. It would be an abuse of the process of the Court because the penalty proceedings had been set aside. Accordingly, the criminal proceedings were quashed. A Division Bench of this Court in the case of ITO vs. B.B. Mittal Ors. [1993] 113 CTR (P H) 229 : [1993] 199 ITR 805 (P H) : TC 48R.863 in a case where prosecution had been initiated under s. 276C and s. 277 under the IT Act r/w s. 193 of the Indian Penal Code also found that once the Tribunal had recorded that there was no concealment of any income, the complaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pril, 1986, is also to the same effect as recorded by the Tribunal in Parkash Chand's case . '' Same was the view of the Kerala High Court in the case of V. Rajasekharan Nair vs. CIT Ors. [1993] 113 CTR (Ker) 71 : [1993] 204 ITR 783 (Ker) : TC 48R.864. The matter in this regard would be clinched further by the decision of the Supreme Court in the case of G.L. Didwania Anr. vs. ITO Anr. 1995 Supp. (2) SCC 724. In the cited case the assessing authority held that assessee has intentionally concealed the income derived from the company which belonged to him. The appellate authority had set aside the said findings and held that there was no material that the company belonged to the assessee. It was concluded that prosecution, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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