TaxTMI 
TaxTMI 
2010 (8) TMI 48
X X X X Extracts X X X X
X X X X Extracts X X X X
....ollows : 5. The respondent herein has filed a complaint before the above said court in E. O. C. C. No. 151 of 1985 against this petitioner herein and one Mr.Navarathanmul Jain, chartered accountant for the alleged commission of the offences under section 120B read with sections 193, 196, 420 and 511 of the Indian Penal Code and sections 276C, 277 and 278 of the Income-tax Act, 1961. 6. It is averred in the said complaint, that the petitioner/accused is an approved transport contractor for transport of oil, etc., from storage points and installations of Indian Oil Corporation (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum Corporation (HPCL) to various factories in and around Chennai. The second accused is an authorised representative, who prepared final account statements of the first accused. 7. It is further averred that in respect of the assessment year 1983-84, relevant for the accounting year ended on March 31, 1983, the first accused filed a return of income along with the profit and loss account and the balance-sheet as on July 30, 1983, declaring an income of Rs. 32,494. A search was conducted in the residential and business premises of the first accused und....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Income-tax had scrutinised the application and agreed for a settlement under section 273A(4) of the Act, provided the first accused/assessee shall make full and proper disclosure. 12. In compliance with the same, the first accused/assessee has submitted an application on February 24, 1986, under section 273A(4) for a comprehensive settlement. The Commissioner of Income-tax, Central, Chennai-I, who dealt with the said application, has directed the Income-tax Officer, Central, Chennai-V, Chennai to complete the assessment based on the petition for settlement filed by the first accused/assessee under section 273A(4) of the Income-tax Act. 13. The learned counsel appearing for the petitioner would submit that in terms of the directions issued by the Commissioner of Income-tax, the Assessing Officer has passed an order initiating penalty proceedings under section 271(1)(c), (1)(a), (1)(b) and (2) of the Income-tax Act. 14. The said penalty proceedings were challenged before the Commissioner of Income-tax (Appeals) and the said appeals were also dismissed. Challenging the vires of the same, the petitioner/first accused filed Income-tax Appeals Nos. 3416 to 3434/MDS/1984 p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der section 273A of the Income-tax Act. It is also contended by the learned standing counsel, appearing for the respondent that the trial of the case has already been over and the case is posted for arguments and therefore, at this belated stage, this court need not exercise its power under section 482 of the Criminal Procedure Code to quash the proceedings and permit the trial court to proceed further with the trial of the case so that it can reach its logical conclusion. In support of his submissions, the learned standing counsel appearing for the respondent has placed reliance upon the following judgments : (1) P. Jayappan v. S. K. Perumal, First ITO [1984] 149 ITR 696 (SC); (2) Standard Chartered Bank v. Directorate of Enforcement [2006] 130 Comp Cas 341 (SC) ; [2006] 2 SCC (Crl) 221 ; (3) Deputy CIT v. M. Sundaram [2010] 322 ITR 196 (Mad) ; and (4) Asst. CIT v. N. K. Mohamed Ali [2010] 325 ITR 661 (Mad). 17. This court has paid its consideration to the submissions made by the learned counsel appearing on either side and also perused the materials available on record in the form of typed set of documents and also the decisions relied on by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y came to be passed on December 16, 1987 levying penalty of Rs. 5,108. According to P.W. 5, in his chief examination, there was a deliberate concealment of income on the part of the petitioner herein and he has accepted the income on the basis of the application submitted by the petitioner herein for settlement and the quantum of tax sought to be evaded was Rs. 71,206. In the cross-examination, P.W. 5 would depose that on the date of his proposal, assessment has not been completed and the assessee has got right to file a revised return before passing the assessment order if he finds any omission or mistake. P.W.5 would further depose that the prosecution came to be launched before the assessment order was passed. 20. The learned counsel appearing for the petitioner would submit that since admittedly the assessment has not been completed, the assessee has got right to file a revised return and therefore, the penalty levied was not at all proper and the Tribunal has taken into consideration the said aspect also and set aside the penalty and the same cannot be the subject-matter of criminal prosecution. 21. Let this court consider the decisions relied on by the learned cou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ovementioned provisions is the omission of the word 'deliberately' from the expression 'deliberately furnished inaccurate particulars of such income'. It is implicit in the word 'concealed' that there has been a deliberate act on the part of the assessee. The word 'concealment' inherently carries with it the element of mensrea. Therefore, the mere fact that some figure or some particulars have been disclosed by itself, even if takes out the case from the purview of non-disclosure cannot by itself take out the case from the purview of furnishing inaccurate particulars. Mere omission from the return of an item of receipt does neither amount to concealment nor deliberate furnishing of inaccurate particulars of income unless and until there is some evidence to show or some circumstances are found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid the imposition of tax thereon. In order that a penalty under section 271(1)(iii) may be imposed, it has to be proved that the assessee has consciously made the concealment or furnished inaccurate particulars of his income. Whe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....x Act and thereafter criminal prosecution on the same set of facts cannot be sustained. The Delhi High Court on taking into consideration the said submission has held as follows (page 103 of 244 ITR) : "Now, the question is whether on these facts, the prosecution should be allowed to proceed. The effect of the finding of the Tribunal would be that the assessee/accused were not guilty of concealment of income or furnishing of inaccurate particulars of income justifying imposition of penalty under section 271(1) © of the Act. On the same facts, it could not be said that the accused had wilfully attempted to evade any tax, penalty or interest under section 276C(1) of the Act. In any case the chances of conviction are too remote. In these circum-stances and as is also the consensus amongst High Courts as noticed above, continuation of the criminal proceedings would serve no useful purpose. It will be a sheer waste of valuable court time and unnecessary harassment to the petitioners." 28. Therefore, the learned counsel appearing for the petitioner would submit that the facts narrated in the above cited decision are similar to that of the present case and therefore, the ratio laid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....A of the Income-tax Act is an overriding power which he may exercise at his discretion. It is only where the Commissioner reduces or waives the penalty imposed or imposable under section 273A(1)(ii) of the Act in exercise of his discretion under section 273A. Section 279(1A) comes into operation and acts as a statutory bar for proceeding with the prosecution under section 276C or section 277 of the Act. Ultimately, the hon'ble Supreme Court of India on the facts of the said case, found that the pendency of the reassessment proceedings cannot act as a bar to institution of the criminal prosecution for the offences punishable under sections 276C or section 277 of the Act and therefore, dismissed the appeals filed by the assessee. 31. The learned standing counsel appearing for the respondent would submit that as per the testimony of P. W. 5, the Assessing Officer, he do not know whether the Commissioner has passed any orders on the petition given by the accused under exhibit P. 21 series (petition filed under section 273A(4) of the Income-tax Act). 32. It is the further submission of the learned standing counsel appearing for the respondent that only if an order is passed under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n section 56 to any award of penalty and not the initiation of proceedings under section 51 of the Act, the making of a contravention of any of the provisions of this Act as the key to both proceedings, would all indicate that an adjudication should precede a prosecution under section 56 of the Act. There is nothing in the Act to indicate that a finding in adjudication is binding on the court in a prosecution under section 56 of the Act. There is no indication that the prosecution depends upon the result of the adjudication. We have already held that on the scheme of the Act, the two proceedings are independent. The finding in one is not conclusive in the other. In the context of the objects sought to be achieved by the Act, the elements relied on by the learned senior counsel, would not justify a finding that a prosecution can be launched only after the completion of adjudication under section 51 of the Act. The decision in K. C. Builders v. Asst. CIT [2004] 265 ITR 562 (SC) ; [2004] 2 SCC 731, is clearly distinguishable. The court proceeded as if under the Income-tax Act, the prosecution is dependent on the imposition of penalty. That was a case where the prosecution ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....It is the further submission of the learned standing counsel appearing for the respondent that the decision rendered by the single Bench of this court reported in Asst. CIT v. N. K. Mohamed Ali [2010] 325 ITR 661 (Mad), is squarely applicable to the facts of this case as in the said case also, the Income-tax Appellate Tribunal had set aside the penalties levied against the respondent/assessee. However, this court in the said decision, has taken into consideration P. Jayappan's case [1984] 149 ITR 696 (SC), K. C. Builders' case [2004] 265 ITR 562 (SC) and Standard Chartered Bank's case [2006] 130 Comp Cas 341 (SC) and held that the findings of the Tribunal can have no binding effect on the proceedings of the criminal court. For the said reasons this court in the above cited decision, has allowed the revision filed by the Assistant Commissioner of Income-tax and directed the continuance of the criminal proceedings. 37. This court after taking into consideration the said decisions and in the light of the reasoning recorded by the hon'ble Supreme Court of India in Standard Chartered Bank's case [2006] 130 Comp Cas 341 (SC) ; [2006] 2 SCC (Crl.) 221 is of the consid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n-victed or acquitted of that offence and the said conviction or acquittal is in force. If that much is established, it can be contended that he is not liable to be tried again for the same offence nor on the same facts for any other offence for which a different charge from the one made against him might have been made under section 236 or for which he might have been convicted under section 273. It has been repeatedly held by this court that adjudication before a Collector of Customs is not a 'prosecution' nor the Collector of Customs a court. In Maqbool Hussain v. State of Bombay [1953] SCR 730 ; AIR 1953 SC 325 this court held that the wording of article 20 of the Constitution and the words used therein show that the proceedings therein contemplated are proceedings of the nature of criminal proceedings before a court of law or a judicial tribunal and 'prosecution' in this context would mean an initiation or starting of proceedings of a criminal nature before a court of law or a judicial tribunal in accordance with the procedure prescribed in the statute which creates the offence and regulates the procedure. This court further held that where a person against whom proceedi....