1983 (5) TMI 21

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....antum proceedings, the matter came finally to rest. Simultaneously, the IAC passed an order of penalty against the petitioner-firm. The petitioner's appeal to the Income-tax Appellate Tribunal was dismissed. The petitioner thereupon successfully sought a reference to the High Court, bearing I.T. Ref. No. 11 of 1981, which is pending. The question posed therein is to the effect, whether the IAC was legally authorised to levy penalty. The third step which the Department took is to obtain sanction from the Commissioner to prosecute the petitioner before a criminal court under s. 277 of the I.T. Act. In the said complaint, charge having been framed against the petitioner-firm, it has approached this court to get quashed the same by invoking the....

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....hat there was no proof of concealment of income or deliberate furnishing of inaccurate particulars, then criminal proceedings cannot continue under s. 277 of the I.T. Act, 1961. It is the admitted position that if under the old Act of 1922, penalty proceedings has been taken against the assessee, then no prosecution could be launched against him. But, under the present Act of 1961, there is no such bar, for penalty proceedings can be launched as also prosecution. It is also a settled principle that whatever adverse has been observed in the orders in assessment or penalty proceedings, that is not binding on the criminal court while determining the guilt of the assessee. But a principle of good sense seems to have been grafted in the aforesai....