Quashing of tax prosecution follows deletion of the addition that formed its sole foundation.

Prosecution under section 276C of the Income-tax Act was held unsustainable after the appellate tribunal deleted the addition forming its sole foundation. With the alleged concealed income addition no longer surviving and the Revenue not disputing that position, the criminal proceedings were treated as having lost their basis. Continuation of the prosecution was found to serve no useful purpose and to amount to abuse of the process of court, so the prosecution was quashed.

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Issues: Whether prosecution launched under section 276C of the Income-tax Act, 1961 was liable to be quashed after the appellate authority deleted the addition on which the prosecution was founded.

Analysis: The prosecution rested solely on the addition made towards alleged concealed income. The appellate tribunal subsequently deleted that addition, and the Revenue did not dispute this position. Once the foundation of the criminal case ceased to exist, continuation of the prosecution would serve no useful purpose and would amount to abuse of the process of court.

Conclusion: The prosecution was quashed.

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