Penalty reduction does not bar tax prosecution absent a finding of no concealment and independent criminal assessment.

Reduction of penalty by the Commissioner following a Tribunal order did not, by itself, trigger the statutory bar under section 279(1A) against prosecution for concealment and wilful attempt to evade tax. The Tribunal's and Commissioner's orders did not record a finding that there was no concealment, and the penalty proceedings had not ended in the manner required to attract the protection relied on by the taxpayer. The criminal prosecution under the Income-tax Act was therefore not automatically controlled by the tax proceedings, and the criminal court must decide the case independently on the evidence before it.

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Issues: Whether the reduction of penalty by the Commissioner pursuant to the Tribunal's order attracted section 279(1A) of the Income-tax Act, 1961 so as to bar prosecution for offences under the Act.

Analysis: The complaints alleged concealment of income and wilful attempt to evade tax. The petitioner relied on the Tribunal's order and the Commissioner's subsequent reduction of penalty to contend that the prosecution was barred under section 279(1A). The Court held that the Tribunal's and Commissioner's orders did not contain a finding that there was no concealment of income, and the penalty proceedings had not culminated in favour of the petitioner in the manner contemplated in the earlier Supreme Court decision relied upon. The Court also reiterated that criminal proceedings under the Income-tax Act are not automatically bound by the result of income-tax proceedings and that the criminal court must decide the matter independently on the evidence before it.

Conclusion: The order reducing penalty did not attract section 279(1A), and the prosecution could proceed.

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