TaxTMI 
TaxTMI 
2005 (1) TMI 55
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....ssessed under section 143(3) of the Act at a total income of Rs. 16,85,510. The company claimed deduction of Rs. 1,77,03,141 being the demand on account of excise duty raised by the Superintendent of Central Excise during the financial year 1982-83. An amount of Rs. 9,23,000 was also debited in the profit and loss account of the company under the head "Provisions for warranty expenses". The Revenue made assessment under section 143(3) of the Act on March 25, 1986, disallowing the expenditure claimed on two accounts i.e., (i) excise duty amounting to Rs. 1,77,03,141, and (ii) warranty expenses of Rs. 9,23,000. The company, thereafter filed an appeal before the Commissioner of Income-tax (Appeals) (hereinafter referred to as "the CIT(A)) on April 23,1986, against the assessment order dated March 25,1986, but it was rejected by the Commissioner of Income-tax (Appeals) on October 25, 1989, who confirmed the order of the Assessing Officer dated March 25, 1986. In December, 1989, the company preferred appeal before the Income-tax Appellate Tribunal. During the pendency of the said appeal, on April 10, 1990, the Deputy Commissioner of Income-tax passed penal order under section 271(1)(c....
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..... Bodhiwala, director, on behalf of the accused. It was also alleged that as the accused persons had made a statement in verification of return under the Act and under the rules framed thereunder and the statement made was false which they either knew or believed to be false or did not believe to be true and as such the accused persons have committed offence punishable under sections 276C and 277 of the Act. The Special Court (Economic Offences), Jamshedpur, took cognizance on June 20, 1992, against the accused persons and ordered to issue summons against them. The petitioner company thereafter filed a petition under section 482, Cr. P.C, at the Patna High Court for quashing the entire proceeding. The case was registered as Cr. Misc. No. 6252 of 1993. On May 11, 1993, the Patna High Court after hearing learned counsel appearing on behalf of the petitioner-company, including learned senior counsel appearing on behalf of the Revenue, allowed the petitioner to withdraw the application with liberty to move the High Court again after disposal of the appeal, as was pending before the appellate authority. The court while permitted to withdraw the application, directed the trial court not....
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.... Vice-President of the Tribunal that the issue be readjudicated altogether by a different Bench since it apprehended that a definite view was formed by the Bench which passed the order on the miscellaneous petition filed by the Department. Accordingly, another Bench was constituted to readjudicate the claim. The appeal I.T.A. No. 34 (Patna) of 1990 (assessment year 1983-84) was heard afresh, whereinafter, the Tribunal by its order dated November 5, 1996, held as follows: ".. In our opinion, it is admitted position that the impugned liability arose for the first time on the basis of demand notice issued by the Excise department on September 29, 1982, in respect of certain transactions or work carried on by the assessee which was never brought to tax by the Excise Department in earlier years and the assessee was also of the definite view that the work was not exigible to the excise duty and this view was upheld by the apex court. Therefore, the assessee was entitled to appropriate deduction on the basis of notice of demand received for the first time in respect of altogether new liability raked up during the previous year... Besides the statement in the accounts is for the purpose o....
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....said provision, which reads as follows: "A person shall not be proceeded against for an offence under section 276C or section 277 in relation to the assessment for an assessment year in respect of which the penalty imposed or imposable on him under clause (iii) of sub-section (1) of section 271 has been reduced or waived by an order under section 273A." The further case of the Revenue is that the accused persons on behalf of the assessee having wilfully made wrong statement of verification which he knew to be false or which be believed to be false within the meaning of section 277 of the Act, they committed offence on two counts, i.e., under section 276C as well as section 277 of the Act, both of which are punishable with rigorous imprisonment extending to three years and with fine being the maximum sentence. It was informed that the Special Court (Economic Offences), Muzaffarpur, by its order dated June 20,1992, had already taken cognizance of the offences under sections 276C and 277 of the Act. It appears that on the second appeal preferred by the assessee (petitioner) before the Income-tax Appellate Tribunal, Patna Bench (camp at Jamshedpur), vide its order dated March 25, 19....
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....B which deals with the offences by a company, the following observation was made by the Supreme Court in the aforesaid case: "In the instant case, the penalties levied under 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 rigorous 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 the Appellate Tribunal supersedes the order of the Assessing Officer under section 143(3) more so when the Assessing Officer cancelled the penalty levied. In our view, once the finding of concealment and subsequent levy of penalties under section 271(1)(c) of the Act has been struc....