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2023 (1) TMI 536 - ALLAHABAD HIGH COURTCriminal proceedings arising out of orders of penalty - Penalty u/s 271(1)(a), 271(1)(c) and 273(b) for late filing of return for Assessment Year 1983-84 vide separate orders cancelled and allowed all appeals - criminal proceedings under Section 276-C of Income Tax Act initiated simultaneously remained in existence - HELD THAT:- As decided in judgment passed by Supreme Court in K.C. Builders and anothers [2004 (1) TMI 7 - SUPREME COURT] levy of penalties and prosecution under Section 276C are simultaneous. Hence, once the penalties are cancelled on the ground that there is no concealment, the quashing of prosecution under Section 276C is automatic. The appellants cannot be made to suffer and face the rigorous of criminal trial when the same cannot be sustained in the eyes of law because the entire prosecution in view of a conclusive finding of the Income Tax Tribunal that there is no concealment of income becomes devoid of jurisdiction and under Section 254 of the Act, a finding of the Appellate Tribunal supercedes the order of the Assessing Officer under Section 143(3) more so when the Assessing Officer cancelled the penalty levied. The facts of the present case are squarely covered by the judgment in K.C. Builders (supra) and the above ratio will also cover the position of law with regard to criminal proceedings arising out of orders of penalty. In view of above, the application is allowed. The orders passed by Special Chief Judicial Magistrate, Varanasi and order passed by Sessions Judge, Varanasi as well as proceedings under Sections 276, 277 of Income Tax Act, are hereby quashed.
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