9911796707
TMI Blog1995 (4) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... rievances made by the petitioners, it would be appropriate to refer to the factual background. Petitioner No. 1 is a partnership firm, whereas petitioner No. 5 is a private limited company incorporated under the Companies Act, 1956. Petitioners Nos. 2, 3 and 4 are partners of petitioner No. 1 and petitioner No. 6 is the director of petitioner No. S. A complaint was filed by respondent No. 2 in the Court of the Special Judicial Magistrate, Muzaffarpur, alleging, inter alia, that petitioner No. 1 was engaged in the business of leasing equipment like air-conditioners, etc., and pays a commission of Rs. 66,500 to petitioner No. 5. On scrutiny, this was disallowed and added to the total income of petitioner No. 1. Penalty proceeding under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter concern for maintenance charges in the assessee-firm first year. On the aforesaid finding, the said entire amount was disallowed and, as stated above, the same was added back and a penalty proceeding was initiated. Being aggrieved by the aforesaid order dated March 27, 1991, Petitioner No. 1 filed a statutory appeal before the Commissioner of Income-tax (Appeals) which was registered as Appeal No. 80/JSR of 1991-92. By an order dated March 24, 1992, as contained in annexure 4, the appellate court set aside the assessment order by observing as follows : " I have carefully considered the above arguments. I have also gone through the certificates issued by the companies to whom the air-conditioners have been leased out. In my opinion, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 271D of the Act was initiated. Against the said proceeding, the petitioners moved the appellate authority, Jamshedpur, in Income-tax Appeal No. 150/(SSR) of 1991-92, and by order dated February 6, 1992, the said appeal was allowed. It appears that when again a fresh penalty proceeding was initiated in respect of the same amount, the petitioners again moved the appellate authority in Income-tax Appeal No. 369 of 1994-95. By an order dated November 14, 1994, the said appeal was partly allowed. The aforesaid orders dated February 6, 1992, and November 14, 1994, passed by the appellate authority have been annexed as annexures 9 and 10, respectively, in the supplementary affidavit. This factual position has not been controverted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs of the authorities cannot be held to be binding on the criminal court. In support of his contention, he has relied upon a Division Bench decision of this court in the case of Surendra Kumar Jhunjhunwala v. State of Bihar [1991] 1 BLJ 468. On the premises of the aforesaid submissions made on behalf of the parties, the question which is required to be answered is whether a criminal proceeding should be allowed to continue when the basis of which has been nullified by a superior authority under the Act. It is not in dispute that the appellate order is dated March 24, 1992, whereas the complaint was filed on March 28, 1992. This finding of the appellate court has not been challenged and, as such, it reached its finality. A close readi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anwarilal Satyanarain v. State a Bihar [1990] PLJR 107. The petitioners in that case moved this court against the order refusing discharge in a criminal prosecution under section 276B of the Act. His Lordship, while considering the import of section 276B vis-a-vis sections 201 and 221 of the Act, observed that : " I am clearly of the view that the process of the criminal court should not be allowed to be abused in cases where an assessee has succeeded in proving good and sufficient reasons for his failure before an authority under the Act in a penalty proceeding ". In the aforesaid case, this court quashed the prosecution on the ground that during the pendency of the criminal prosecution, the penalty imposed by the Income-tax Officer and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Essential Commodities Act. On the same analogy given by the Division Bench, I may say with great respect that the said Division Bench decision is not applicable in this case inasmuch as the present case is under the Income-tax Act and not under the Essential Commodities Act. After considering the matter from various angles and after giving my thoughtful consideration, I am of the opinion that the continuation of the criminal proceeding against the petitioners will result in abuse of the process of the court. In the result, this application is allowed and the Complaint Case No. 287 of 1992 including the order taking cognizance dated March 28, 1992, as contained in annexure 2 is hereby quashed. There will be no order as to costs. - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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