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2019 (7) TMI 987 - CHHATTISGARH HIGH COURTQuashing of prosecution u/s 276C and 277 - Penalty u/s 271(1)(c) deleted by CIT and confirmed by Tribunal - HELD THAT:- 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. 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 order as aforementioned is unsustainable and unquestionable. Supreme Court observe in para23 that the High Court is not justified in dismissing the criminal revision ignoring the settled law as laid down by the Supreme 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.” In the circumstances, this Court deems it appropriate to exercise its inherent power for quashing the proceeding of criminal case No.29362/1996 (Income Tax Officer, Rajnandgaon Vs. M/s System India Castings, Bhilai & Others) pending before CJM, Durg and it is accordingly quashed.
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