TaxTMI 
TaxTMI 
2024 (7) TMI 96
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....ission. 5. This bunch of petitions arise from identical set of facts questioning the legality and propriety of prosecution of the petitioners by respondent No. 1. The petitioners have, therefore, invoked inherent jurisdiction of this Court under Section 482 of the Code of Criminal Procedure, 1973 (for short "Cr. P.C") r/w Article 227 of the Constitution of India. 6. A few facts germane for disposal of these petitions can be summarized as follows. 7. Petitioner No. 1 in Writ Petition [Stamp] No. 321 of 2024 - Nirlon Ltd. is a company formed and registered under the Companies Act, 1956 having it's office at Goregaon (East), Mumbai. Respondent Nos. 2 to 7 in Criminal Writ Petition [Stamp] No. 321 of 2024 are the petitioners in the identical petitions. A Criminal complaint bearing C.C No. SW/189 of 2017 dated 27th April, 2017 came to be filed by the respondent No. 1 before the Additional Chief Metropolitan Magistrate, 38th Court, Ballard Pier, Mumbai. The learned Magistrate vide an order dated 9th December, 2019 issued process as well as summons dated 13th January, 2023. The petitioners and respondent No. 2 to 7 herein are being prosecuted under Section 276C, 277, 278B and 278....
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....e for filing complaint, accordingly upon following the prescribed procedure and obtaining necessary sanction, Criminal Complaint being CC no. SW/189/2017 was filed under the erstwhile charge of PCIT-13 against the Petitioner Company and its Directors/principal officers. I further submit that subsequent to the deletion of quantum addition and penalty levied u/s. 271 (1) (c) of the Income Tax Act by the Hon'ble ITAT vide its order dated 29.11.2017 read with Order dated 12.02.2019, the prosecution launched by the Income Tax department against the present Petition company and its directors/principal officers under CC no. SW/189/2017 at the relevant time does not survive and is to be withdrawn. The position that the such prosecution is to be withdrawn is also laid down in CBDT instruction bearing F. No. 285/16/90 - IT (Inv. - I) 43 dated 14-05-1996. 17. I say in the above circumstances, it is humbly submitted that the present Petition may kindly be disposed of accordingly". 12. I heard Mr. Desai, learned Senior Counsel for the petitioners and Mr. Khanchandani, learned Counsel for respondent No. 1. 13. Learned Counsel for the petitioners pressed into service following few ....
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....f the Supreme Court in case of K.C. Builders and another Vs. Assistant Commissioner of Income Tax (supra). 16. Law on the said aspect is no more res integra. The Supreme Court in the case of K.C. Builders and another Vs. Assistant Commissioner of Income Tax (supra) held thus; "13. "One of the amendments made to the abovementioned provisions is the omission of the word "deliberately" from the expression "deliberately furnished inaccurate particulars of such income". It is implicit in the word "concealed" that there has been a deliberate act on the part of the assessee. The meaning of the word "concealment" as found in Shorter Oxford English Dictionary, 3rd Edition, Vol. I, is as follows:- "In law, the intentional suppression of truth or fact known, to the injury or prejudice of another." 14. The word "concealment" inherently carries with it the element of mens rea. Therefore, the mere fact that some figure or some particulars have been disclosed by itself, even if takes out the case from the purview of non-disclosure, it cannot by itself take out the case from the purview of furnishing inaccurate particulars. Mere omission from the return of an item of ....
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....) of the Act has been struck down by the Tribunal, the Assessing Officer has no other alternative except to correct his order under Section 154 of the Act as per the directions of the Tribunal. As already noticed, the subject-matter of the complaint before this Court is concealment of income arrived at on the basis of the finding of the assessing officer. If the Tribunal has set aside the order of concealment and penalties, there is no concealment in the eyes of the law and, therefore, the prosecution cannot be proceeded with by the complainant and further proceedings will be illegal and without jurisdiction. The Assistant Commissioner of Income Tax cannot proceed with the prosecution even after the order of concealment has been set aside by the Tribunal. When the Tribunal has set aside 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.....
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....a and others Vs. Dharmendra Textile Processors and others [2007] 295 ITR 244 (SC) has held as under; "The penalty under the said section is a civil liability. Wilful concealment is not an essential ingredient for attracting the civil liability as is the case in the matter of prosecution under section 276C of the Act". Since it is a civil liability it does not require mens rea and in case of prosecution, mens rea is sine qua non and, therefore, the prosecution cannot be allowed to be continued, more particularly, in view of the fact that the ITAT had deleted the penalty. 22. As already stated, the Hon'ble Supreme Court in case of K.C. Builders and another Vs. Assistant Commissioner of Income Tax (supra) has in no uncertain terms held that the penalty and prosecution under the Act run hand in hand. When penalty itself is deleted then there is no question of prosecuting the assessee under Sections 276C (1), 277 and 278B of the Act. 23. Admittedly, no appeal has been preferred against the order dated 12th February, 2019 passed by the ITAT till date. Limitation to file an appeal has also expired and, therefore, the order has attained finality. 24. The Supreme Court ....