Independent tax prosecution may proceed despite pending reassessment, and quashing requires final exoneration on the same facts.

Criminal prosecution under the Income-tax Act is not barred merely because connected reassessment or penalty proceedings are pending or had earlier led to deletion of penalty. The Court applied the settled principle that adjudicatory proceedings and criminal prosecution operate independently and may proceed simultaneously, so pendency of tax proceedings does not by itself justify quashing. Quashing is warranted only where the accused has been finally exonerated on merits on the same factual foundation. On the facts, the petitioner had not been so exonerated, and the criminal complaint based on alleged undisclosed jewellery investment was allowed to proceed.

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Issues: Whether the criminal complaint for offences under the Income-tax Act could be quashed on the ground that penalty-related and reassessment proceedings were pending or had earlier resulted in deletion of penalty.

Analysis: The complaint arose from alleged undisclosed investment in jewellery detected in search proceedings and the consequential assessment and penalty orders. The later reassessment and revision-related proceedings had not reached finality, and the Court noted that the petitioner had not been finally exonerated on merits. It further applied the settled principle that adjudication proceedings and criminal prosecution are independent, may proceed simultaneously, and pendency of adjudication does not by itself bar prosecution. Quashing is not justified unless the person has been exonerated on merits in the adjudicatory forum on the same facts.

Conclusion: The complaint could not be quashed; the petition was not maintainable on the facts placed before the Court.

Final Conclusion: The criminal prosecution was permitted to proceed, and no interference was called for in exercise of the quashing jurisdiction.

Ratio Decidendi: Criminal prosecution under the Income-tax Act is not barred merely because connected adjudicatory or reassessment proceedings are pending, and quashing is warranted only where there is a final exoneration on merits on the same factual foundation.

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