2019 (11) TMI 217

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....Court (Economic Offences), Ernakulam to keep in abeyance all further proceedings in the case C.C.No.915/2014 of that court till the disposal of the appeal filed by the petitioners in the matter before the Commissioner of Income Tax (Appeals). 2. The petitioners are the accused in the aforesaid case. The first petitioner is a company. The second petitioner is the Managing Director of the first petitioner company. The case C.C.No.915/2014 is based on the complaint filed against them by the Deputy Commissioner of Income Tax alleging that they had wilfully not filed the return of income tax for the assessment year 2007-08 within the prescribed time and that they have committed the offence punishable under Section 276CC of the Income Tax Act,....

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....s by companies. In K.C.Builders (supra), the Apex Court has held that levy of penalties and prosecution under Section 276C of the Act are simultaneous and hence, once the penalties are cancelled on the ground that there is no concealment, the quashing of prosecution under Section 276C of the Act is automatic. In the instant case, the prosecution is under Section 276CC of the Act for wilful failure to file returns within due time. It does not depend on the assessment of tax. 7. Learned counsel for the petitioners has also relied upon the decision of the Supreme Court in Commissioner of Income Tax v. Bhupen Champak Lal Dalal : AIR 2001 SC 1096, wherein it has been held as follows: "The prosecution in criminal law and proceedings a....

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....e offence for determination of the sentence of the offence, the department may resort to best judgment assessment or otherwise to past years to determine the extent of the breach. ..... If it was the intention of the legislature to hold up the prosecution proceedings till the assessment proceedings are completed by way of appeal or otherwise the same would have been provided in Section 276CC itself. Therefore, the contention of the learned senior counsel for the appellant that no prosecution could be initiated till the culmination of assessment proceedings, especially in a case where the appellant had not filed the return as per Section 139(1) of the Act or following the notices issued under Section 142 or Section 148 does not arise". 10....