Settlement Commission immunity barred continuing prosecution for the same tax default, leading to quashing of criminal proceedings.

Where the Settlement Commission has granted immunity from prosecution for the relevant tax years and that order has attained finality, continuation of criminal proceedings for the same alleged Income-tax default is an abuse of process and may be quashed. The document notes that the petitioner was prosecuted for non-filing of return after search and notice under section 153A, but the final immunity order under section 245D(4) remained unwithdrawn. On that basis, the complaint, summoning order, charge-framing order, and consequential proceedings were quashed.

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Issues: Whether the prosecution complaint and consequential criminal proceedings under the Income-tax Act could be quashed after the Settlement Commission had granted immunity from prosecution.

Analysis: The petitioner faced prosecution for alleged non-filing of return after a search and notice under section 153A. Before framing of charge, the Settlement Commission passed an order under section 245D(4) granting immunity from prosecution for the relevant assessment years. The order of settlement had attained finality and there was no material to show that the immunity had been withdrawn. In such circumstances, continuation of the complaint would serve no purpose and would amount to misuse of the process of law. The Court relied on the principle that once the Settlement Commission has validly granted immunity and the order stands final, criminal prosecution on the same footing cannot be allowed to continue.

Conclusion: The complaint, summoning order, charge-framing order, and all consequential proceedings were quashed in favour of the petitioner.

Ratio Decidendi: Where the Settlement Commission has granted immunity from prosecution under the Income-tax Act and that order has attained finality, continuation of prosecution for the same alleged tax default is an abuse of process and is liable to be quashed.

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