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TMI Blog1986 (12) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... accused on various grounds. The learned Magistrate dismissed the petition by order dated March 12, 1985, against which Crl. R.P. No. 201 of 1985 has been filed. Not being satisfied with the said revision petition, the 13th accused filed Crl. M.C. No. 717 of 1985 under section 482 of the Code of Criminal Procedure, 1898, for quashing the complaint and all subsequent proceedings thereunder. The allegations in the complaint are briefly these: On June 26, 1971, returns were filed by the partners of the firm showing the income for the assessment year 1971-72. The total income shown in the returns is little above Rs. 4 1/2 lakhs. The Income-tax Officer rejected the returns holding that the partners concealed substantial portion of their income and submitted false returns. He made his best judgment assessment by adding an amount which is a little over Rs. 20 lakhs to the returned income. But the Appellate Assistant Commissioner, on appeal filed by the assessee, slashed down the amount and modified the assessment by adding Rs. 3 lakhs to the income returned. When the above order of the Appellate Assistant Commissioner was challenged in second appeal by both the Revenue and the assessees, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his arguments : (1) -The complaint was filed on the basis of a finding of the Income-tax Officer that a huge amount (nearly Rs. 21 lakhs) has been concealed. The Appellate Tribunal slashed down the said quantum in a substantial way and brought it to figure which is a little over Rs. 4 lakhs. The authorisation for prosecution was given on the strength of the earlier finding that a huge amount has been concealed as noted by the Income-tax Officer. Hence, the contention is that the Commissioner could not have chosen to direct the Income-tax Officer to launch prosecution against the accused if the concealment is only for the present figure which is relatively a small figure as now found by the Tribunal. Therefore, the point advanced is that the authorisation given by the Commissioner does not hold good in view of the changed circumstances. (2) As the Appellate Tribunal found that the partners of the firm are not guilty of concealment of income, prosecution as against accused, A-2 to A-12, who are partners cannot continue. (3) If the partners are not liable to be prosecuted, the prosecution as against the remaining persons also cannot be continued because the original sanction given by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady placed. This appears to be an extreme proposition. But there are other decisions which take a different approach. A single judge of this court in Balakrishnan v. ITO [1976] KLT 561, pointed out that " the prosecution initiated by the Income-tax Officer has independent existence irrespective of what happens to the assessment proceedings ". Again, in A. D. Jayaveerapandia Nadar & Co. v. ITO [1975] 101 ITR 390, a single judge of the Madras High Court expressed the same view. The Supreme Court, in the decision in P. Jayappan v. S. K. Perumal, First ITO [1984] 149 ITR 696, held that " it is not law that no proceedings can be initiated at all under section 276C and section 277 as long as some proceeding under the Act in which there is a chance of success of the assessee is pending. mere expectation of success in some proceeding in appeal or reference under the Act cannot come in the way of the institution of criminal proceedings under section 276C and section 277 of the Act " (at p. 700). The Supreme Court in the said case further pointed out that the criminal court has to judge the case independently on the evidence placed before it. In the light of these decisions, especially the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (4) says that the orders passed by the Appellate Tribunal, on appeal, shall be final. This is subject to the powers of the High Court on a reference under section 256 of the Act. A reading of the above provisions shows that finality is attached to the order of the Appellate Tribunal regarding the assessment. But that finality is not attached to every observation made by the members of the Appellate Tribunal, unless the observation is so inextricably connected with the conclusion regarding the assessment. If some of the remarks of the members of the appellate authority are not relevant for the determination of the assessment, those remarks cannot get the seal of finality envisaged in section 254. In the instant case, the Judicial Member of the Appellate Tribunal made the following observations in the order of the Appellate Tribunal: " So, under these circumstances, I am quite satisfied that none of the partners knew of this activity. It was all done without the knowledge or consent or connivance or abetment or instigation of any of the partners. They were innocent of these transactions. There is absolutely no material placed before the Tribunal to implicate any one of these p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to impose a sentence of imprisonment. Learned counsel for the Revenue referred me to a decision of single judge of the Madras High Court in A. D. Jayaveerapandia Nadar and Co. v. ITO [1975] 101 ITR 390. In an exhaustively discussed judgment, the learned judge concluded that a company is amenable to penal consequences if it is found guilty of the offence. But the absence of provision for awarding a sentence of fine was not considered in the said decision. A Division Bench of the Allahabad High Court in Modi Industries Ltd. v. B. C. Goel [1983] 144 ITR 496, had occasion to consider an identical question. Satish Chandra C.J., who spoke for the Bench, observed that the law is well-settled that a corporation or a juristic personality cannot be subjected to bodily punishment or imprisonment (Headnote). "A company registered under the Companies Act, 1956, is a juristic person and cannot be awarded the punishment of imprisonment and hence cannot be prosecuted for breach of sections 277 and 278 of the Act (during the relevant period) ". Similar view has been expressed by a Division Bench of the Calcutta High Court in Kusum Products Ltd. v. S. K. Sinha, ITO [1980] 126 ITR 804. A single ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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