TaxTMI 
TaxTMI 
2006 (9) TMI 110
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....der dated March 21, 2005, came to be passed on an application for discharge moved by the accused persons. In the application the accused had taken the plea that the Income-tax Appellate Tribunal had deleted the penalty sought to be imposed on the accused under section 271(1)(c)(iii) of the Income-tax Act, 1961 (hereinafter referred to as "the said Act") and, therefore, the present criminal proceedings under section 276C(1), read with section 278B of the said Act against the accused also did not survive and the complaint ought to be quashed. The learned ACMM, after considering the application moved on behalf of the accused persons and the argument advanced by the parties, rejected the application for discharge on the ground that the income-t....
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.... inasmuch as penalty proceedings under section 271(1) (c) and the criminal liability under section 276 C, read with section 278B of the said Act were independent and the pendency of the proceedings under section 271(1) (c) could not be taken as a ground to stay the proceedings under section 276C read with section 278B of the said Act. He placed reliance on two decisions, namely, Rinkoo Steels v. K. P. Ganguli, ITO [1989] 179 ITR 482 (Delhi) and R. G. Agarwal and Co. v. Union of India [1994] 210 ITR 617 (MP). 4. Learned counsel for the respondents submitted that the present issue is no longer open to debate in view of the pronouncements of the Supreme Court in the cases of CIT v. Bhupen Champak Lal Dalal [2001] 248 ITR 830 ; [2001] II AD ....
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....itions were filed before the Sessions Court, which did not interfere with the orders of the trial court. Thereafter, the matter was carried further to the High Court and the High Court, while entertaining a writ petition, granted an interim order staying the proceedings in the criminal cases filed before the trial court. The interim order passed by the High Court was challenged before the Supreme Court. While considering the same, the Supreme Court observed as under (page 832) "The prosecution in criminal law and proceedings arising under the Act are undoubtedly independent proceedings and, therefore, there is no impediment in law for the criminal proceedings to proceed even during the pendency of the proceedings under the Act. However, ....
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....nder section 271(1) (c) were cancelled by the respondent by giving effect to the order of the Income-tax Appellate Tribunal in I. T. A. Nos. 3129-3132. It is settled law that levy of penalties and prosecution under section 276C are simultaneous. Hence, once the penalties are cancelled on the ground that there is no concealment, the quashing of prosecution under section 276C is automatic. In our opinion, the appellants cannot be made to suffer and face the rigours of criminal trial when the same cannot be sustained in the eyes of law because the entire prosecution in view of a conclusive finding of the Income-tax Tribunal that there is no concealment of income becomes devoid of jurisdiction and under section 254 of the Act, a finding of t....
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....al is allowed to proceed further after the order of the Tribunal and the consequent cancellation of penalty, it will be an idle and empty formality to require the appellants to have the order of the Tribunal exhibited as a defence document, inasmuch as the passing of the order as aforementioned is unsustainable and unquestionable." 8. This decision of the Supreme Court makes it more than clear that the proceedings under section 271(1)(c) would have a clear and definite bearing on those under section 276C. In so far as the proceedings under section 271(1) (c) are concerned, as of now, the penalty against the accused stands deleted. However, the Department has preferred an appeal which is pending before this court. Therefore, clearly, the ....