TMI Blog1992 (9) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... he hotel business and evade tax, he had put up the false plea of giving the building on rent to his son, Vinod Kumar. Accordingly, the Income-tax Officer assessed the income from the hotel business at Rs. 35,000 and added the same to the income of Naubat Rai by his assessment order dated September 23, 1974. He also gave a penalty notice under section 274/271(l)(c) of the Income-tax Act, 1961 ( hereinafter referred to as " the Act ), for concealment of particulars of income, to Naubat Rai. In the appeal filed by Naubat Rai, the Appellate Assistant Commissioner of Income-tax, Ludhiana Range, Ludhiana, upheld the findings of the Income-tax Officer that Messrs. Tourist Hotel was being run by the assessee himself and not by his son, Vinod Kumar, but reduced the income from the hotel business from Rs. 35,000 to Rs. 15,000 by his order dated March 1, 1975. Thereafter, a second appeal was filed by Naubat Rai before the Income-tax Appellate Tribunal, Chandigarh Bench, which by its order dated September 21, 1976, further reduced the income from the hotel business to Rs. 8,000. The Income-tax Officer by his order dated October 16, 1975, had also imposed penalty on Naubat Rai under section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had come into existence in the meantime, the Income-tax Officer, Mandi, assessed the income from Messrs. Tourist Hotel business at Rs. 20,000 by his order dated March 21, 1975. For concealment of particulars of income from the hotel business, a penalty notice tinder section 274 read with section 271(l)(c) of the Act was also given. Thereafter, a penalty of Rs. 7,500 was also imposed under section 271(l)(c) of the Act by the Income-tax Officer, Mandi, which was confirmed by the Appellate Assistant Commissioner of Income-tax in the second appeal filed by Naubat Rai. The Income-tax Appellate Tribunal, Chandigarh, remitted the penalty by its order dated September 30, 1982. In respect of income-tax return for the year 1972-73 another criminal complaint was filed by the Income-tax Officer, Mandi, against Naubat Rai. Vinod Kumar and Nanak Chand in the court of the Chief judicial Magistrate, Mandi. The facts and circumstances brought on record in the said complaint and the offences alleged against the accused persons were similar as these were in the criminal complaint filed in respect of the income-tax return for the year 1971-72. In this criminal complaint, charges were framed against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y imposed or imposable on a person under clause (iii) of subsection (1) of section 271 ; or . . . . " Clause (iii) of sub-section (1) of section 271 has been in the Act from October 1, 1975, and it governs the present case also, but the point to be examined is whether in the present case penalty has been waived or reduced by the Commissioner as provided in this section. The order dated December 6, 1977, cancelling the penalty order dated October 16, 1975, of the Income-tax Officer, Mandi, in respect of the year 1970-71 was passed by the Appellate Assistant Commissioner of Income-tax under section 250(6) of the Act. Similarly, the order dated September 30, 1982, remitting the penalty imposed by the Income-tax Officer, Mandi, and affirmed by the Appellate Assistant Commissioner, was passed by the Income-tax Appellate Tribunal. Admittedly, these orders were not passed by the Commissioner of Income-tax. Later on, the Commissioner of Income-tax, Patiala, had passed authorisation orders dated March 13, 1981, in favour of the Income-tax Officer, Mandi, to file complaints against Naubat Rai under section 277 of the Act read with sections 109, 177 and 193 of the Indian Penal Code and agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her legal bar for the institution of the proceedings is urged except stating that in the event of the petitioner being exonerated in the reassessment proceedings, the prosecutions may have to be dropped. It is true that, as observed by this court in Uttam Chand v. ITO [1982] 133 ITR 909 (SC), the prosecution once initiated may be quashed in the light of a finding favourable to the assessee recorded by an authority under the Act subsequently in respect of the relevant assessment proceedings but that decision is no authority for the proposition that no proceedings can be initiated at all under section 276C and section 277 as long as some proceeding under the Act in which there is a chance of success of the assessee is pending. A mere expectation of success in some proceeding in appeal or reference under the Act cannot come in the way of the institution of criminal proceedings under section 276C and section 277 of the Act. In the criminal case all the ingredients of the offence in question have to be established in order to secure the conviction of the accused. The criminal court no doubt has to give due regard to the result of any proceeding under the Act having a bearing on the ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order to be passed therein. Even here the discretion should be exercised judicially and in such a way as not to frustrate the object of the criminal proceedings. There is no rigid rule which makes it necessary for a criminal court to adjourn or postpone the hearing of a case before it indefinitely or for an unduly long period only because some proceeding which may have some bearing On it is pending else-where. But this, however, has no relevance to the question of maintain-ability of the prosecution. The prosecution in those circumstances cannot be quashed on the ground that it is a premature one. In the result, the first submission made by Shri Mandhotra has no force. The next submission made on behalf of the petitioner is that the prosecution of the petitioner and Naubat Rai under sections 177 and 193 of the Indian Penal Code is bad as section 195 of the Criminal Procedure Code has not been complied with. But this argument is raised only to be rejected. Admittedly, in the present case, the complaint has been filed by the Income-tax Officer, Mandi, on the authorisation of his superior, i.e., the Commissioner of Income-tax, Patiala, who is a public servant. As such section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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