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TMI Blog2010 (2) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... the Firm was disclosed to be ₹ 73,050/-, which was accepted by the Income Tax Officer, Shivpuri vide Assessment Order Dated 26.03.1981, passed in terms of Section 143(1) of the Income Tax Act. 3. The case of the Revenue as emerges from the record further disclose that during the Assessment of Financial Year 1981-82, it was found that an amount of ₹ 28,297/- was received by the Partnership Firm, from the Sales Tax Department, as a Refund of Sales Tax, by an Order of the Sales Tax Officer Dated 14.05.1979, but the receipt of this amount of ₹ 28,297/- was not disclosed by the Assessee Firm, in its Income Tax Return of the year 1980-81, therefore, for the purpose of reassessment of the Firm (in terms of Section 148 of the Income Tax Act), a Notice was issued under Section 147(A) on Date 17.02.1984 and in compliance to the Notice, the Assessee Firm had submitted a Revised Return on Date 06.06.1985 by showing their Income to be ₹ 94,175/-, wherein the amount of refund received from the Sales Tax Department was also included. 4. The Income Tax Officer, Shivpuri, while passing the Re-Assessment Order on Date 10.03.1986 determined the liability of the Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd have also perused the record of the Courts below and have considered the submissions orally advanced during the course of hearing of this Criminal Appeal. 8. Shri Sangam Jain, Learned Counsel for the Appellant-Union of India submits that the complaint was filed well within time period prescribed under Section 276-C of the Act, by computing the period of three years from the date of imposition of the penalty on Date 23.03.1988 and thereafter from the Date when the Appellate Tribunal affirmed the Order of penalty by Order Dated 12.12.1989. Shri Sangam Jain had also raised a preliminary grievances about the manner in which the appeal was disposed of by the First Appellate Court, without securing presence of the Counsel for the Income Tax Department (in view of non-authorization of the Government Advocate who usually appears on behalf of the State Government) to demonstrate that the appeal has been disposed of without affording an opportunity of hearing to the Union of India. 9. Shri Sangam Jain submits that the Firm had received information about the Refund Order of the Sales Tax Department, much before filling of the return for the Financial Year 1978 and 1981, therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mishra, while explaining the meaning of Willful Concealment has argued that unless the act or omission of the Assessee is prima facie negligent or suffers from apparent mala fide or actuated with such mens rea that the same could be evaluated from the conduct of Assessee and all these elements are adequately established by the Department, no inference could be drawn about suppression or concealment of the Income, in a willful manner as required for proving the offence under Section 276C of the Act. 13. Shri Mishra has drawn my attention to the provisions contained in Article 20 of the Constitution of India and Section 300 of the Cr.P.C. to demonstrate that since the Penalty was imposed by the Assessing Officer, on account of alleged concealment of Income and the same was deposited, therefore no prosecution could have been launched against the Partners of the Assessee Firm, as the same would be hit by the principles of double jeopardy. 14. Shri Mishra further submits that while passing the Judgment of acquittal, the Appellate Court has not only passed the Judgment on the point of Limitation but has also addressed to the merits of the matter and after due deliberation and ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the refund of ₹ 28,297/- from the Sales Tax Department, more particularly in the background, when no cash transaction was made in relation to ₹ 28,297/-, since this amount was adjusted in the existing Sales Tax liability of the Firm by the Sales Tax Department. 18. The record also demonstrates that while reassessing the return of the Assessee Firm, subsequent to the issuance of the Notice issued under Section 147-A, the Assessment Officer has imposed penalty of ₹ 20,000/- and the Assessee Firm had challenged the Order of penalty in Appeal and the Assessment Order was not challenged which further goes to demonstrate the bona fide of the Assessee Firm. Therefore there exist no element of criminal intention of the Assessee Firm, which could bring it within the clutches of Section 276C of the Income Tax Act, therefore this Court is of the considered view that the Appellate Court has not committed any error of law or jurisdiction, while passing an Order of acquittal. 19. The Supreme Court while dealing with somewhat similar situation has examined the objectivity and necessity of initiating a criminal action under Section 276-C of the Income Tax Act and has found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Judgments are reported as 2002 (5) MPLJ 449 Raghunath Prasad Mohanlal and Ors. v. Union of India and Anr. 2006 (2) MPLJ 18 Kusumchand Sharadchand and Anr. v. Union of India and Anr. and 2009 (1) MPLJ 528 Harkawat and Company and Ors. v. Union of India. 21. The Supreme Court of India in its Judgment reported as (2004) 2 Supreme Court Cases 731 K.C. Builders and Anr. v. Assistant Commissioner of Income Tax has very clearly observed that when the assessment is set aside, penalty automatically goes and this Judgment continue to hold good in relation to the ratio decidendi about Section 276C of the Income Tax Act, although on other point, the ratio of this Judgment has been doubted by the Supreme Court in its subsequent Judgment reported as (2006)4 Supreme Court Cases 278 Standard Chartered Bank and Ors. v. Directorate of Enforcement and Ors. and has further distinguished this case in another case reported as (2006) 13 SCC 252 State through CBI v. Sashi Balasubramanian and Anr. but the fact remains that ratio of K.C. Builders (supra) in relation to Section 276-C of the Income Tax Act has been found to be correct in a latter Judgment of the Supreme Court which is reported as (2007) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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