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TMI Blog1984 (11) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... d with the Central Government within one week of the payments. However, this was not done and the deposits were effected much later. The position in this regard has been as under : --------------------------------------------------------------------------------------------------------------------------------------------------- Sr. Name of the Amount of Date of Date by Date on Delay in No. party tax deduction. deduction which tax which full of tax should tax paid months have been in Govt. deposited a/c. --------------------------------------------------------------------------------------------------------------------------------------------------- 1. M/s. Delhi 8,000.00 6-2-79 13-2-79 26-6-80 1 yr. 4 Automobiles months 2. M/s. Ansal Housing 13,417.00 31-3-79 7-4-79 19-10-79 6 months Estate (P) Ltd. 3. M/s. Ansal Properties 3,981.54 31-3-79 7-4-79 22-10-79 6 months Industries 4. Smt. Manju Devi 254.00 2-4-79 9-4-79 26-6-80 2 months 5. M/s. Delhi 7,889.00 14-6-79 21-6-79 26-6-80 1 year Automobiles 6. do. 9,132.00 29-9-79 6-10-79 26-6-80 8 months 7. Dr. Amrita Salve 1,234.75 30-10-78 6-11-78 7-12-78 1 month 8. M/s. Master 6,860.00 10-11-78 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als) who by an order dated March 24, 1983, quashed that penalty. The relevant operative part of that order was as under : " However, the contention of the learned representative that there had been good and sufficient reason for non-payment of the tax on account of the financial stringency appears to be correct. The appellant company, in fact, did not pay the creditors but their accounts were only credited with the amounts reduced by the tax that would have been deductible in respect thereof. Moreover, the deduction of tax in these cases was notional only. Further, the Income-tax Officer had charged interest under section 201 (1A) in respect of the delay in payment of tax deducted at source. The appeal against the order under section 201(1A) has been rejected by me in separate order upholding the levy of the interest. Considering the various facts and circumstances of the case and the fact that there had been sufficient and good cause, I hold that the Income- tax Officer was not justified in levying penalty under section 201(1)/221 and, as such, the same is cancelled. In the result, the penalty of Rs. 20,000 is cancelled and the appeal is allowed. " As a result of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prosecutions in cases of economic offences or violations of income-tax law are of recent growth and their desirability and/or necessity was felt because of rampant attitude of defiance displayed by some affluent sections of the society.The pernicious effect on the economy of the country that evasions and violations were playing naturally called for sterner measures. These prosecutions have thus been made permissible in spite of the already existing provisions with regard to levy of penalties by the income-tax authorities. The Legislature's wisdom, therefore, to open up prosecutions and dire consequences has a sound basis and cannot be doubted. There is no question of double jeopardy in such cases. The scope and purport of penalty proceedings and prosecutions are separate and independent. The existence of the one or the other is no bar to any of them. They are co-extensive. An assessee can be levied penalty as well as punished by prosecution. However, the question arises in cases where penalties have been quashed on the same facts and circumstances and the gravamen of the criminal charge is the same which was under purview in penalty proceedings. Can a finding given on those ver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there was no clear finding by the Commissioner of Income-tax that there was sufficient and good cause with the assessee not to effect deposits is plainly not borne out. Rather, a perusal of that order brings out that he was satisfied that there existed sufficient and good cause with the assessee. The two reasons which prevailed with him were the financial stringency of the assessee and that the interest payments were not in cash but merely notional by way of credit entries in their accounts. From the side of the complainant in the present cases, it has been urged that the balance-sheet of the company showed that the current liabilities were reduced by about Rs. 3.6 lakhs as compared to the preceding year. From this circumstance, it was urged that the company was not lacking in funds and if it could eliminate part of those liabilities, it could have as well paid the dues of the Revenue. However, the reduction of those liabilities were at different stages in the year and do not essentially reflect the state of affairs at the time when deposits were to be effected with the Revenue. In any case, the entire conspectus of facts and circumstances were before the Commissioner and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence and circumstance in favour of the accused in criminal trial. Thus, in the case of Gulab Chand Sharma v. H. P. Sharma [1974] ILR 1 Delhi 190, a Division Bench of this court discussed the essentials of the general principles of res judicata in criminal cases and observed that where a decision by a competent judicial tribunal has been finally given and determines the same questions as are sought to be controverted in a subsequent litigation and between the same parties, the plea of res judicata is available. The following pertinent observations may be reproduced here with advantage: " Since the principle of issue estoppel is aimed at the exclusion of evidence to prove facts which have been already proved between the parties, it has not been held to apply against the accused though it always applies in favour of the accused." The Allahabad High Court in Dr. D. N. Munshi v. N. B. Singh [1978] 112 ITR 173 took note that if the law permits, the order of the Tribunal may be utilised as a piece of evidence to show that there was no offence committed by the accused. But the finding given by the Tribunal cannot by itself be sufficient to direct the dismissal of the complaint o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urally the penalty or prosecution could not be sustained. The other observations of the court with regard to the maintainability of the criminal proceedings, where penalty has been dropped, were in the nature of obiter. Rather, the observation that initiation of penalty proceedings is not a condition precedent to the initiation of the complaint under section 277 cannot be taken exception to when the Supreme Court in Jayappan's case [1984] 149 ITR 696, has upheld the maintainability of the criminal case even where reassessment proceedings have still to be completed. In fact, levy of penalty in such case follows after the completion of reassessment proceedings. The view of this court in Rajinder Nath's case [1982] 134 ITR 397 that when additions to income is knocked down the prosecution cannot be sustained finds approval in a somewhat different situation, when the Supreme Court knocked down the prosecution in the case of Uttam Chand v. ITO [1982] 133 ITR 909 and found that the genuineness of the firm had been established in the regular assessment and, therefore, the assessee could not be prosecuted for filing false returns. The complainant has next made a reference to section 279 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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