2014 (6) TMI 406

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....ons 276 C and Section 277 read with Section 278-B of the Income Tax Act, 1961, for short 'the Act', pertaining to assessment year 1988-89. On revision petition filed by Income Tax Officer, Khanna, against the order dated November 29, 2000. It was allowed by the learned Sessions Judge vide order dated October 12, 2001. Brief facts of the case are that the petitioner is a partnership concern which filed return for the year 1988-89 declaring total income of Rs.23570/-. The Assessing Officer issued notice under Section 143 (2) and 142 (1) of the Act alongwith printed questionnaire. The petitioners filed a revised return on January 11, 1989 declaring income of Rs.113570/- with a note that revised return was being filed subject to no penalty and....

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....in the name of cash creditors on the clear understanding that no penalty would be levied or prosecution launched. The explanation submitted by the assessee is a bonafide." Copy of the order dated June 22, 1994 has been placed on record as annexure P-2. The Commissioner of Income Tax (Appeals) filed a reference application to the Income Tax Appellate Tribunal, Chandigarh Bench, to refer the question of law arising out of the Tribunal order dated June 22, 1994 in the income tax appeal to the High Court of Punjab and Haryana for its opinion. The said reference application was dismissed by the Tribunal by order dated November 16, 1994. It was held that there was no justification for levying or confirming the penalty of Rs.38765/- under Section....

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....turn voluntarily filed on January 11, 1989, there had been no concealment before the Assessing Officer. The observations of the Income Tax Appellate Tribunal, Chandigarh Bench have been ignored by the Sessions Judge wherein it has been held that the revised return was filed subject to there being no penalty or prosecution. The short question which is required to be determined in the present case is whether it is not an abuse of the process of the law to prosecute an assessee for concealment of income when Adjudicatory Authority of the tax Department has itself held that return of the assessee was voluntary return filed in good faith and before the detection of any concealment by the Assessing Officer. In the present case, the Income Tax A....

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.... false returns. We, accordingly, allow this appeal and quash the prosecution." The judgment of Uttam Chand's case (supra) was again reiterated in the judgment of Supreme Court in G.L. Didwania and another Vs. Income Tax Officer and another, 1995 Suppl. (2) SCC 724, wherein it was held as follows:- "The whole question is whether the appellantassessee made a false statement regarding the income which according to the assessing authority has escaped assessment. So far as this issue is concerned, the finding of the Appellant Tribunal is conclusive. Therefore, as held in Uttam Chand's case [1982] 133 ITR 909 (S.C.), the prosecution cannot be sustained. Accordingly, the proceedings are quashed and the appeal is allowed." In view of the jud....