Pending tax appeal does not bar criminal prosecution where complaint alleges independent discovery of income suppression.

Criminal prosecution for offences under the Income-tax Act and the IPC is not barred merely because an appeal against the assessment is pending, since the criminal court must independently evaluate the evidence and the prosecution proceeds on a footing distinct from the tax assessment process. The complaint also contained specific averments that suppression of income was independently discovered and that royalty income was omitted from the return, so it could not be treated as having been filed only on the Commissioner's direction. The prayer to quash the proceedings was rejected.

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Issues: Whether criminal proceedings for offences under the Income-tax Act and the Indian Penal Code could be quashed on the ground that an appeal against the assessment order was pending and the complaint was said to have been initiated on the basis of the Commissioner's observations.

Analysis: The complaint contained specific averments that the suppression of income had been discovered independently by the complainant and that royalty income had been omitted from the return. On that basis, the complaint could not be treated as having been filed merely on the Commissioner's direction. As to the pending appeal, criminal prosecution for tax offences is not barred by pendency of assessment or appellate proceedings, because the Magistrate must independently assess the evidence and the criminal case proceeds on a footing distinct from the tax assessment process.

Conclusion: The prayer to quash the criminal proceedings was rejected.

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