9911796707
TMI Blog2010 (4) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Act, 1961 ; (b) filing of false return of income with false statement of accounts under section 277 of the Income-tax Act, 1961 ; (c) fabricating false evidence under section 193 of the Indian Penal Code ; (d) using such false evidence in judicial proceedings before the Income-tax Officer under section 196 of the Indian Penal Code ; (e) cheating the Income-tax Officer under section 420 of the Indian Penal Code. for the assessment years 1984-85, 1985-86 and 1986-87. 4. Penalties were levied upon the respondent under section 271(1)(c) of the Income-tax Act. Against the orders of penalty imposed by the Department, the respondent filed appeals before the Income-tax Appellate Tribunal, Madras. The Economic Offences Court has taken cognizance of the com-plaints. While these appeals were pending, the Appellate Tribunal allowed the appeals and the penalties levied against the respondent were cancelled. The respondent had moved petitions for discharge on March 6, 1996, before the Economic Offences Court. The contention therein is that in view of the order of the Appellate Tribunal undoing the levy of penalty, the very basis of prosecution in the complaint case has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on July 21, 2005, the petitioner moved a petition under sec-tion 244(2) of the Code of Criminal Procedure, 1973, before the trial court seeking a direction for issue of process to the witnesses. 10. The trial court has required the prosecution to argue on the maintain-ability of the petition filed by the complainant under section 244(2) of the Code of Criminal Procedure, 1973, written arguments were submitted by the prosecution on August 1, 2005. Informing that the trial court is not following the procedure prescribed in Chapter XIX-B, sections 244 to 247 of the Code of Criminal Procedure, 1973, and the unwillingness of the lower court to follow the decision of the honourable apex court and disobedience of circular issued by this court in S. Mohan Gandhi v. Sri Visalam Chit Funds [1998] 231 ITR 69 (Mad) the petitioner seeks a direction to the trial court to record evidence under section 244 of the Code of Criminal Procedure, 1973. 11. I have heard Mr. K. Ramasamy, learned Special Public Prosecutor (I. T.) and Mr. A. Raghunathan, learned counsel for the respondent. 12. While, the contention of the learned Special Public Prosecutor (I. T.) is that the stage f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the binding nature of the order of the Tribunal upon a criminal court. While, the learned senior counsel for the respondent would submit that the same would be binding on the trial court, the learned special public prosecutor would argue otherwise. Various decisions were relied upon by counsel on either side. 16. The submissions of the learned senior counsel for the respondent pre-dominantly lie on the reasoning of the honourable apex court inK. C. Builders v. Asst. CIT [2004] 265 ITR 562 (SC) ; [2004] 2 SCC 731 and other decisions which reflect a similar line of thought and to the effect that levy of penalties and prosecution under section 276C of the Income-tax Act are simultaneous and hence, once the penalties are cancelled on the ground that there was (no) concealment, the quashing of prosecution under section 276C of the Income-tax Act was automatic. 17. In Standard Chartered Bank v. Directorate of Enforcement [2006] 130 Comp Cas 341 (SC) ; [2006] 4 SCC 278, the honourable apex court has dis-tinguished the decision in K. C. Builders v. Asst. CIT [2004] 265 ITR 562 (SC) ; [2004] 2 SCC 731, case in the following words (pages 359-360) : "The decision in K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assistant Collector of Customs, Bombay after obtaining the required sanction of the Government filed a complaint against five persons including the appellants in Criminal Appeal No. 35 of 1967 (accused Nos. 1 and 2 in the case) under section 120B Indian Penal Code read with clauses (37), (75), (76) and (81) of section 167 of the Sea Customs Act, 1878 (Act VIII of 1878) as well as under section 5 of the Imports and Exports (Control) Act, 1947. Before the commencement of the enquiry in that complaint, the first accused filed on August 3, 1965, the appli-cation mentioned above. 6. Now we shall proceed to examine the contentions set out earlier. 6A. Reliance on article 20(2) is placed under the following circum-stances. In the enquiry held by the Collector of Customs, he gave the benefit of doubt to accused Nos. 1 and 2. This is what he stated therein : `As regards M/s. Larmel Enterprises (of which accused No. 1 is the proprietor and accused No. 2 is the manager) although it is apparent that they have directly assisted the importers in their illegal activities and are morally guilty, since there is no conclusive evidence against them to hold them as persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 23 of the Foreign Exchange Regulation Act in respect of the same act, the proceeding before the sea customs authorities was not a prosecution and the order for confiscation was not a punishment inflicted by a court or judicial tribunal within the meaning of article 20(2) of the Constitu-tion and hence his subsequent prosecution was not barred. The said rule was reiterated in Thomas Dana v. State of Punjab [1959] Supp 1 SCR 274 ; AIR 1959 SC 375 and in several other cases. 8. We shall now take up the contention that the finding of the Collector of Customs referred to earlier operated as an issue estoppel in the present prosecution. The issue estoppel rule is but a facet of the doctrine of autre fois acquit. In Sambasivan v. Public Prosecutor, Federation of Malaya [1950] AC 458 at page 479, Lord Mac Dermott enunciated the said rule thus : `The effect of a verdict of acquittal pronounced by a competent court on a lawful charge and after a lawful trial is not completely stated by saying that the person acquitted cannot be tried again for the same offence. To that it must be added that the verdict is binding and conclusive in all subsequent proceedings between th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rriving at the final verdict. But by itself it affords no ground for dismissing the complaint. Hence we see no substance in the contention that the prosecution should be quashed on the ground that there was delay in instituting the complaint." In P. Jayappan v. S. K. Perumal, First ITO [1984] 149 ITR 696 (SC) the honourable apex court has observed as follows (page 700) : "The criminal court no doubt has to give due regard to the result of any proceeding under the Act having a bearing on the question in issue and in an appropriate case it may drop the proceedings in the light of an order passed under the Act. It does not, however, mean that the result of a proceeding under the Act would be binding on the criminal court. The criminal court has to judge the case independently on the evidence placed before it. Otherwise, there is a danger of a con-tention being advanced that whenever an assessee or any other person liable under the Act had failed to convince the authorities in the pro-ceedings under the Act that he has not deliberately made any false statement or that he has not fabricated any material evidence, the con-viction of such person should invariably follow in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
