TMI Blog2019 (7) TMI 987X X X X Extracts X X X X X X X X Extracts X X X X ..... hat against the order passed by the CIT (Appeals) deleting the penalty, the Revenue preferred second appeal before the Tribunal, Nagpur. However, the appeal filed by the Revenue was dismissed. The Revenue did not take up the matter further and thus the order passed by the Tribunal affirming the order passed by the CIT (Appeals) has attained finality. In the matter of K.C. Builders [ 2004 (1) TMI 7 - SUPREME COURT] the Supreme Court further observed that if the trial is allowed to proceed further after the order of the Tribunal and the consequent cancellation of penalty, it will be an idle and empty formality to require the appellants to have the order of the Tribunal exhibited as a defence document inasmuch as the passing of the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al case No.29362/1996 (Income Tax Officer, Rajnandgaon Vs. M/s System India Castings, Bhilai Others) pending before CJM, Durg. 3. At the outset, learned Standing Counsel for the Department would submit that the petitioners having already moved before the trial Magistrate for dropping the proceeding, the instant petition is not maintainable. However, considering that law in respect of continuation of prosecution for commission of offence under Sections 276C and 277 read with Section 278 of the Income Tax Act, 1961 (for short 'the Act') on a previous complaint though subsequently the fact of concealment of income having already been extinguished pursuant to the appellate order passed by the Income Tax Appellate Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed to have been made in cash. Further, no payment slips were available in respect of the above purchases. In one of the bills, the vehicle used for transportation was found to be a Tractor Trolley instead of the Truck as claimed by the assessee. Further, the same Tractor Trolley was shown to be carrying some other goods on 29/01/90 from Bhilai to Tedesara. It is not possible for the Tractor Trolley to transport Cast Iron Scraps from Jabalpur to Tedesara on 31/01/90 as claimed by the assessee. Based on all these discrepancies, the A.O. arrived at a conclusion that there was no party named M/s Sagar Enterprises at Jabalpur dealing in scrap and the purchases shown to have been made from the above said party was only a colourful device to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome, therefore, penalty of ₹ 4,26,630/deserves to be cancelled. Since the act of concealment of income is the main constituent for charge under Section 276C and 277 of the Act, once the CIT (Appeals) concluded that there was no concealment of income on the part of the assessee, the very foundation of the charge would not survive. It is also to be noted that against the order passed by the CIT (Appeals) deleting the penalty, the Revenue preferred second appeal before the Tribunal, Nagpur. However, the appeal filed by the Revenue was dismissed by order dated 12.6.1997 (AnnexureP/ 10). The Revenue did not take up the matter further and thus the order passed by the Tribunal affirming the order passed by the CIT (Appeals) has attained fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court that the finding of the Appellate Tribunal was conclusive and the prosecution cannot be sustained since the penalty after having been deleted by the complainant following the Appellate Tribunal's order, no offence survives under the Income Tax Act and thus quashing of prosecution is automatic . Same expression has again been used by the Supreme Court in para24 also. 8. In view of the settled legal position as enunciated by the Supreme Court in the matter of K.C. Builders (Supra), it will be an empty formality to direct the petitioners to approach the trial Magistrate, who has otherwise kept the application preferred by the petitioners pending since 15.1.2014. 9. In the circumstances, thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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