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TMI Blog1996 (9) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 1987-88. The grievance of the petitioner in substance is that regarding the alleged violation of the provisions of the Income-tax Act separate penalty proceedings were initiated against the petitioner alleging the same set of facts; that he suppressed certain income in the return and thereby tried to evade the tax payable by him and also submitted false accounts. The authority of the first instance, the Income-tax Officer, Ward-3(4), Ayakar Bhavan, Hyderabad, levied penalty for both the assessment years and being aggrieved by the same the petitioner approached the Deputy Commissioner of Income-tax (Appeals), A-Range, Hyderabad. It is the case of the petitioner that, vide order dated September 7, 1994, the Deputy Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urts including the judgments of this court. He relied upon the following judgments in R. G. Agarwal and Co. v. Union of India [1994] 210 ITR 617; [1994] 2 Crimes 592 of the Madhya Pradesh High Court, in Masilamani v. G. Ranganathan [1988] 1 Crimes 602 of the Madras High Court, in Shrimati Tilaka Das v. Shrimati Rina Das [1988] 1 Crimes 466 of the Gauhati High Court, in ITO v. Rayala Corporation (P.) Ltd. [1994] 206 ITR 381 of the Madras High Court, in Ashok Biscuit Works v. ITO [1988] 171 ITR 300 of the High Court of Andhra Pradesh. As against these rulings, learned counsel appearing for the petitioner invited my attention to the rulings of the Supreme Court in a decision in Uttam Chand v. ITO [1982] 133 ITR 909, in Premier Breweries Ltd. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income-tax (Appeals), the Department has already preferred two appeals before the Income-tax Appellate Tribunal and those appeals are pending even as on today. It is only on the basis of this fact, learned counsel for the Revenue submits, that the proceedings have not reached finality. Therefore, the quashing of the criminal proceedings does not arise at this stage. He further submitted that there is also a charge against the petitioner under section 277 of the Income-tax Act in addition to the charge framed under section 276C of the Income-tax Act. Having regard to the admitted facts narrated above, now the short point for my consideration would be whether the proceedings are liable to be quashed at this stage. The judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of this court has held that the complaint already filed on the basis of the earlier return before the criminal court was not liable to be quashed, even though the penalty proceedings were set aside on the basis of another return filed later. But, the facts of that case do not apply to the facts of this case. In the instant case, the penalty proceedings are cancelled. In such circumstances, the question would be whether the prosecution could continue on the same allegations on which the penalty proceedings were initiated. Therefore, the facts of Ashok Biscuit Works v. ITO [1988] 171 ITR 300 (AP) are distinguishable from this case. The judgment of the Madhya Pradesh High Court in R. G. Agarwal and Co. v. Union of India [1994] 210 ITR 617 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uashed. The Supreme Court held as under : " Heard counsel, special leave granted. In view of the finding recorded by the Income-tax Appellate Tribunal that it was clear on the appraisal of the entire material on the record that Shrimati Janak Rani was a partner of the assessee-firm and that the firm was a genuine firm, we do not see how the assessee can be prosecuted for filing false returns. We, accordingly, allow this appeal and quash the prosecution. There will be no order as to costs. " Learned counsel for the petitioner also brought to my notice a decision in ([1994] 207 ITR (St.) 33). The short note reporting found in the said journal reads as under : " Offence : Cancellation of penalty by Tribunal during pendency of crimina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y proceedings. But counsel for the petitioner submits that whether the Department succeeds before the said Tribunal or not would be a matter of guess and on the basis of such a guess that the Department would succeed the prosecution cannot be allowed to go on. Having regard to these circumstances, I am of the considered view that the prosecution as on today cannot be quashed, However, it has to await the result of the Income-tax Tribunal. In case the Department succeeds before the Tribunal the prosecution may continue from the stage it stood and if the Department ultimately fails in its appeal before the Tribunal, the prosecution cannot be allowed to go on. What exactly would be the result cannot be anticipated as on today. In this view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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