TaxTMI 
TaxTMI 
2018 (3) TMI 51
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....ere sold. Some other investments were also made. The petitioner also received gift. The details of purchase of shares and other transactions are not required to be noticed to decide the limited issue raised before this court. Suffice it to say that in the order of assessment the assessing authority added an amount of Rs. 20,64,598 as income from undisclosed sources vide annexure 1 dated March 18, 2007. The petitioner has given explanation that there was no such concealment as is portrayed in order annexure-1. 4. The petitioner aggrieved by the order of assessment preferred an appeal to the Commissioner of Income-tax (Appeals)-II, Lucknow (for short CIT (Appeals)). The appeal was decided vide order dated November 30, 2005 annexure-III. It is the contention of the petitioner that submissions made by the petitioners were not appreciated while deciding the appeal. 5. In the meantime penalty proceedings under section 271(1)(c) of the Income-tax Act were initiated against the petitioner and on addition of Rs. 28,11,266 a penalty of Rs. 10,00,000 was levied vide order dated May 31, 2006. The petitioner feeling aggrieved by the order of penalty filed an appeal before the Commissioner o....
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....f the donor was recorded. He disclosed the source of his income which was declared in the return of income so it cannot be said that the assessee furnished inaccurate particulars of income or concealed the income. 33. Considering the totality of the facts as discussed hereinabove, we are of the view that no penalty was leviable in the present case . . . 35. In the result, the appeal filed by the assessee is allowed." 10. Affidavit of Ms. Sapna Srivastava, Income-tax Officer posted in the office of the Principal Commissioner of Income-tax-II Lucknow sworn on November 1, 2017 has been filed, which is taken on record. The affidavit is to the effect that for the assessment year 2002-03 the assessment was completed on total income of Rs. 31,21,510. Against the said assessment the petitioner filed an appeal before the Commissioner of Income-tax (Appeals). The appeal was dismissed. Since addition was confirmed by the Commissioner of Income-tax (Appeals), therefore, penalty of Rs. 10,00,000 was imposed and was also confirmed by the Commissioner of Income-tax (Appeals). 11. Prosecution proceedings were launched under the Income-tax Act in the court of CJM (Economic Offence), Lucknow. ....
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....d by the hon'ble Supreme Court of India in K. C. Builders v. Asst. CIT reported in [2004] 265 ITR 562 (SC) to plead that the order of penalty having been set aside, the impugned criminal proceedings are liable to be quashed. 16. I have considered the facts and circumstances of the case, as noticed above. It is the conceded position of the Income-tax Department through additional affidavit sworn on November 1, 2017 (supra) that the order vide which penalty had been imposed on the petitioner has been set aside by the Income-tax Appellate Tribunal. It has been concluded through a pronouncement by the Income-tax Appellate Tribunal that the petitioner had not concealed income and therefore, penalty was not leviable. The order passed by the Income-tax Appellate Tribunal (supra) has not been challenged, rather the order of refund has already been passed in favour of the petitioner. 17. The hon'ble Supreme Court of India in the case of K. C. Builders (supra) formulated the following question of law (relevant only) (page 567 of 265 ITR) : "On the above pleadings and facts and circumstances of the case, the following questions of law arise for consideration by this court : (a) ....
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....the levy of penalty, the criminal proceedings against the appellants cannot survive for further consideration. In our view, the High Court has taken the view that the charges have been framed and the matter is in the stage of further cross-examination and, therefore, the prosecution may proceed with the trial. In our opinion, the view taken by the learned Magistrate and the High Court is fallacious. In our view, if the trial 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. . . . The High Court without adverting to the above important questions of law involved in this case, and examining them in the proper perspective disposed of the revisions in a summary manner and hence the impugned orders passed by the High Court and the learned magistrate warrant interference. It is a well-established principle that the matter which has been adjudicated and settled by the Tribunal need not be dragged into the crimin....