2026 (1) TMI 371

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....009 passed by the Special Chief Judicial Magistrate (Custom), Lucknow. A further prayer is made that during pendency of present application, implementation of order dated 2.4.2013 issuing bailable warrant be stayed and applicant may not be arrested till disposal of the present application. 2. It is the case of the applicant that the complaint is filed on basis of alleged willful attempt to evade tax and penalty imposed upon the applicant by the Income Tax Officer-IV(1), Lucknow on the basis of penalty order dated 25.6.2007 passed by the Income Tax Officer-IV(1), Lucknow under Section 271(1)(c) of the Income Tax Act 1961, which was subsequently set aside by the Commissioner of Income Tax (Appeal)-II Lucknow vide order dated 12.2.2009 and ....

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....income. 4. The applicant feeling aggrieved against the penalty order dated 25.06.2007 preferred an Appeal before the Commissioner of Income Tax (Appeal)-III, Lucknow which was registered as Appeal no.210/20/ITO-IV(1) Lko 08-09. The Appellate Authority of the department after hearing the parties at length satisfied that the order of imposing penalty on the ground of concealment is illegal, therefore, the Commissioner of Income Tax (Appeal)-III Lucknow vide order dated 12.02.2009 allowed the appeal and deleted the order of penalty passed by the Assessing officer. It has been further submitted that the Income Tax Department i.e. opposite party no.2 had preferred an appeal against the order passed by the Commissioner (Appeal) before the Inco....

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....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 law and, therefore, the prosecution cannot be proceeded with by the complainant and further proceedings will be illegal and without jurisdiction. 7. On the other hand, Sri Kushagra Dikshit, learned counsel for the Union of India, has submitted that the applicant has not challenged the assessment order and he has submitted that even though penalty levelled under Section 271(1)(c) of the Act is now contested in appeal before the C.I.T.(A), but that does not derogate the offence unde....

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....learned counsel for the Union of India and perused the record. 9. The Supreme Court in the case of G.L Didwania (supra) has considered the aspect of penalty and launching of criminal proceedings. In the said case, the Supreme Court has observed that in the order of the Appellate Tribunal, those conclusions reached by the assessing authority have been set aside and consequently, the very basis of the complaint is knocked out and, therefore, in the interest of justice, proceedings ought to have been quashed by the High Court. 10. Similar view has also been taken in the case of K.C. Builders (supra) wherein the Supreme Court has observed that the Assistant Commissioner of Income Tax cannot proceed with the prosecution even after the orde....