9911796707
TMI Blog1996 (7) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of provisional purchases allegedly made from Camera India Photographic Co. Ltd., New Delhi, and Camera Works Pvt. Ltd., Bombay. It was further revealed that no such goods were supplied to petitioner No. 1. It had introduced bogus purchases under the garb of provisional purchases. This was done only in order to reduce the correct income of petitioner No. 1. This amount was added towards bogus purchases. The income of petitioner No. 1 was assessed with a profit of Rs. 34,071. Subsequently, penalty proceedings were initiated against petitioner No. 1. A penalty was levied. It was asserted that the petitioners had deliberately and wilfully concealed the real income in order to avoid payment of taxes. Hence, the complaint was filed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under : "At the outset it has to be stated that there is no provision in law which provides that a prosecution for the offences in question cannot be launched until reassessment proceedings initiated against the assessee are completed. Section 279 of the Act provides that a person shall not be proceeded against for an offence punishable under section 276C or section 277 of the Act except at the instance of the Commissioner." Subsequently, while discussing different other provisions, it was concluded that mere expectation of success in some proceedings cannot come in the way of the institution of the criminal proceedings. A specific finding so arrived at reads as under : "A mere expectation of success in some proceeding in appeal or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 97 of 1995, decided on April 6, 1995), will not help the respondents. In the cited case, the proceedings had been remanded and not finally decided by the appellate court. In the present case, as would be noticed hereinafter, the second appeal had been accepted and the penalty imposed had been set aside. The above said cases are clearly distinguishable. At this stage, it would be appropriate to refer to the findings of the Income-tax Appellate Tribunal dated March 14, 1990, in the appeal filed by the petitioners against the penalty imposed. In paragraphs 9 and 10, the Tribunal observed : "After hearing the parties' representatives, the first ground which prompted the Appellate Assistant Commissioner to confirm the penalty was simply n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee had entered in its stock register for the year 1981-82, the stocks after adjusting the advance stocks. They were maintained properly. When the penalty proceedings in appeal stand quashed and the findings of the Income-tax Officer set aside, it appears that no useful purpose would be served in allowing the criminal proceedings to continue. Reference with advantage may be made to the decision of the Madras High Court in the case of Mohamed I. Unjawala v. Asst. CIT [1995] 213 ITR 190 ; [1995] Crl LJ 1949. The questions involved before the State High Court were the same. In paragraph 8, it was held : "Therefore, it cannot be treated that every finding of the authorities under the Income-tax Act had to be disregarded and ignored for the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, there is absolutely no justification for continuing with the prosecution of the accused-petitioners pursuant to the complaint filed by the respondent-complainant on December 30, 1988. The Income-tax Appellate Tribunal has already held in its order dated September 23, 1992, that the Department has failed to prove that the assessee has concealed the particulars of any income or furnished inaccurate particulars for the assessment years 1983-84 and 1984-85 and the penalty orders were not justified. Though, at the time of the filing of the complaint, it cannot be said that the said complaint was misconceived because the orders under section 271(1)(c) had not attained finality, but now since the matter has attained finality at the stage of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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