2003 (3) TMI 72

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.... Income-tax Officer, the petitioner preferred an appeal which was accepted on November 30, 1974, but on further appeal by the Department, the Tribunal vide order dated May 5,1987, decided the matter against the petitioner against which a reference is pending in this court. The Department filed a complaint on March 26, 1990, under sections 276C and 277 of the Act alleging concealment of income. This petition for quashing has been filed on the ground that the cause of action for filing a complaint was on November 16, 1979, when a finding of concealment of income was recorded and in any case on May 5, 1987, when the Tribunal restored the said finding. It is submitted that a complaint cannot be allowed to be filed long after the finding of c....

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....Department. Once proceedings are finalised, the prosecution has to be commenced within a reasonable period. Chapter XXXVI of the Criminal Procedure Code provides for limitation for taking of cognizance of certain offences. However, the provisions of the Economic Offences (Inapplicability of Limitation) Act, 1974, makes the said Chapter inapplicable to offences under the enactments in the Schedule, which includes the Income-tax Act. Learned counsel for the Department relied on C.G. Balakrishnan v. ITO [1988] 171 ITR 1, wherein the Kerala High Court held that conviction was not liable to be quashed merely on the setting aside of an assessment order. In Ashok Biscuit Works v. ITO [1988] 171 ITR 300, the Andhra Pradesh High Court held tha....

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.... for such a length of time that the inordinate delay can legitimately be called oppressive and unwarranted." It was held that there cannot be a hard and fast rule as all situations cannot be foreseen and no generalisation could be made. No doubt, as held in S. Vaidyanathan, ITO's case [1989] 179 ITR 463 (Mad), a complaint is maintainable even if further proceedings are pending before the Department, even though they may be liable to be stayed and counsel for the petitioner is right in submitting that a complaint could have been filed as soon as the alleged concealment was noticed. However, pendency of proceedings in the higher court cannot be ignored as the order of a higher court may have bearing on prosecution. It cannot also be ignore....