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TMI Blog2011 (8) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... e income of Rs. 71,800/-. After inquiry, an addition of Rs. 3,15,000/- was made in the assessment order dated 27.3.1985. It was also found that no basis for the interest paid i.e. Rs. 35,000/- were given. Notices under Section 143 (2) and 142 (1) were issued to the accused. The accused then furnished a revised return of income showing addition of Rs. 3,15,000/- under the Amnesty Scheme. Since the revised return had been filed after the detection of concealment during original assessment proceedings, the surrender made in the Amnesty Scheme was not complete. Moreover, the interest of Rs. 35,000/- had not been surrendered. Learned counsel for the petitioners has submitted that the assessment order was challenged by the petitioners and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrect his order under section 154 of the Act as per the directions of the Tribunal. As already notices, the subject matter of the complaint before this court is concealment of income arrived at on the basis of the finding of the Assissing Officer. If the Tribunal has set aside the order of concealment and penalties, there is no concealment in the eyes of law and, therefore, the prosecution cannot be proceeded with by the complaint and further proceedings will be illegal and without jurisdiction. The Assistant Commissioner of Income-tax cannot proceed with the prosecution even after the order of concealment has been set aside by the Tribunal. When the Tribunal has set aside the levy of penalty, the criminal proceedings against the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne has appeared on behalf of the respondent. After hearing learned counsel for the petitioners, I am of the opinion that the instant petition deserves to be allowed. In the case of State of Haryana vs. Bhajan Lal, 1992 Supp (1) Supreme Court Cases 335, the Apex Court has held as under:- "The following categories of cases can be stated by way of illustration wherein the extraordinary power under Article 226 or the inherent powers under Section 482, Cr.P.C. Can be exercised by the High Court either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently chennelised and inflexible guidelines or rigid formula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the concerned Act (under which a criminal proceeding is instituted)to the institution and continuance of the proceedings and/or where there is specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of aggrieved party. 7. Where a criminal proceeding is manifestly attended with mala fide and/or where the proceedings is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, that would mean the Department has detected the concealment. If the Income-tax Officer only had prima facie belief, that would not mean concealment has been detected. Question No. 26- Where an order has been set aside on appeal or assessment proceedings are pending under section 147(a) (b), whether the assessee can surrender the amount which is the subject-matter of dispute. Whether such a surrender would be taken as a suo motu declaration before the detection by this Department? Answer - Such a surrender cannot be taken as a suo motu declaration but naturally a lenient view will be taken if an assessee decides to turn honest even at this stage." Question No.4 of the Circular No. 423 dated 26.6.1985 reads as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid factual position which is unassessable, it would amount to gross injustice to the assessee which is contrary to the settled law." Thus, as per the above order, the penalty imposed by the assessing officer was deleted. Once the penalty is deleted, the basis for criminal proceedings goes and the continuation of the criminal proceedings on the basis of the said penalty would be nothing but an abuse of process of law. Amnesty scheme was introduced and the petitioners availed benefit of the same and had surrendered the amount of Rs. 3,15,000/- by furnishing revised return on 27.3.1986 and had paid the tax accordingly on the said amount. The addition of Rs. 35,000/- made in the assessment order was made on the basis of levy of pen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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