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2020 (11) TMI 382 - GUJARAT HIGH COURTOffence punishable u/s 276C(2) - unsecured loan towards the sale of land and unsecured loan - settlement of the tax dispute under the scheme Vivad se Vishwas Scheme rejected - HELD THAT:- As evidently, the demand raised by the Department has not been crystallized since the appeal filed by the petitioner in the year 2015 against the order dated 23.10.2015 passed by the CIT(A) is still pending before the ITAT and has not adjudicated on merits. Had it been so that the petitioner had not taken the legal recourse available for restoration of the appeal dismissed for want of prosecution on 12.01.2018, then the demand raised by the Department could be said to have been crystallized. In the present case, the petitioner immediately took necessary legal recourse by filing the restoration application, which came to be allowed and the appeal was restored to the file of the ITAT and is pending adjudication as on date. Appeal filed by the petitioner before the ITAT was dismissed on 12.01.2018; however, it was not dismissed after being adjudicated on merits. Subsequently, the appeal has been restored to the file of ITAT vide order[2019 (8) TMI 1576 - ITAT AHMEDABAD]. Unless and until the said appeal is adjudicated and disposed of on merits, the demand raised by the petitioner cannot be said to have been crystallized. Under the circumstances, the continuation of prosecution under section 276C(2) of the IT Act could not be permitted as it would amount to a double whammy to the petitioner. If the ITAT has set aside the order of concealment and penalty, then there is no concealment in the eyes of law, under which circumstance, the prosecution cannot be proceeded with by the Department and the further proceedings will be illegal and without jurisdiction. The appeal is pending adjudication before the ITAT. There is no dispute about the proposition that adjudication proceeding and criminal prosecution can be launched simultaneously. Both the proceedings are independent in nature. The finding in the adjudication proceeding in favour of the person facing trial for identical violation will depend upon the nature of finding. In the present case, the allegations in both the proceedings are similar - demand raised by the Department is not crystallized as the appeal preferred by the petitioner is pending adjudication on merits.Since the petitioner has already deposited a substantial part of the demand raised by the Department, this Court is of the opinion that the continuation of the prosecution against the petitioner for the same allegations could not be permitted. Petition is partly allowed. The prosecution initiated against the petitioner by way of Criminal Case for the offence punishable under section 276C(2) of the Income Tax Act, 1961 shall remain stayed until the final judgment is delivered by the ITAT in the pending appeal
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