TMI Blog2011 (2) TMI 954X X X X Extracts X X X X X X X X Extracts X X X X ..... submission advanced by Smt. Archana Sinha, learned counsel appearing on behalf of the Income Tax Department, that at initial stage of a criminal proceeding, this court should refrain from interfering - It is made clear that whatever observation has been made by this court in the present case has been observed for just decision in the present case and the learned court below may not be prejudiced or influenced by this order in proceeding with the case - Petition is rejected - 22099 OF 1998 - - - Dated:- 19-2-2011 - MR. RAKESH KUMAR, J. For the petitioner- Mr. K.N. Jain, Sr. Advocate Mrs. R. Usha, Advocate For Revenue: Mr. Harshwardhan Prasad Mrs. Archana Sinha Rakesh Kumar, J. The present petition has been filed under Section 482 of the Code of Criminal Procedure on behalf of petitioner no. 1 i.e. an unregistered firm (U.R.F.)and petitioner nos. 2 to 4 in the capacity of the partner of petitioner no. 1 with a prayer to quash entire criminal proceeding vide Complaint Case No. 47(C) of 1992/569 of 1993 pending before the Special Court of Economic Offences at Patna Civil Court, Patna which was transferred from the Special Court of Economic Offences at Muz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) of the Income Tax Act, 1961 (hereinafter referred to as the I.T. Act). It was further alleged that accused firm had advanced loans to two ladies namely Smt. Ranjana Agrawal, W/o petitioner no. 3 and one Smt. Nisha Agrawal, W/o petitioner no. 2. On the strength of the said loan the two ladies had constructed a house and then let it out to the firm. During assessment, statements on oath of both the ladies were not found convincing and as such, the Assessing Authority was of the view that both the ladies were having no source of income of their own and only with a view to divert the income of the firm and their husbands who were partners of accused no. 1 income from the house property was shown in their names. The income from the house property was treated as income of the firm and assessment was completed on the total income of Rs. 4,69,090/- as against declared income of Rs. 49,470/- and penalty proceedings under Section 271(1)(C) were also initiated. The computation of income was also described in the complaint petition which is as follows: (i) Receipt from business of steel manufacturing: Rs.3,94,610/- (ii) Receipt from contract work of M/s Deepak Engineering Works: Rs. 24, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto the merit of the case disposed of Cr. Misc. 5072 of 1993. However, it was observed that the prosecution in lower court will be stayed till the disposal of the appeal. The Income Tax Appellate Tribunal disposed of the appeal preferred by the petitioners. So far as assessment is concerned, the Assessing Officer in view of order passed by the Tribunal recomputed the total income under the different heads and finally determined the income of the petitioner firm to the tune of Rs. 88,510/-. The Assessing Authority after the order of the Tribunal further excluded the income of M/s Deepak Electricals from the income of the petitioner firm in view of Voluntary Disclosure Of Income Scheme, 1997. After the income of the petitioner firm was re-determined in the light of order passed by the Income Tax Appellate Tribunal, the petitioner approached this court by filing the present petition which was admitted on 10.3.1999. While admitting, this court directed that further proceeding in Complaint Case No. 47(C) of 1992 / 569 of 1993 pending before Special Court of Economic Offences, Civil Court, Patna shall remain stayed till disposal of this application. 5. Sri K.N. Jain, learned senior c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Accordingly, it has been prayed that in similar manner entire criminal proceedings in the present case also be set aside. 10. Smt. Archana Sinha, learned counsel appearing on behalf of the Income Tax Department has forcefully opposed the prayer of the petitioner. It was submitted that on the date of first assessment itself it was found that petitioner had filed an incorrect return whereby the accused persons had deliberately evaded paying due income tax. The complaint petition categorically indicates that the petitioners had committed offence under Sections 276C, 276D 277 of the Income Tax Act. It was further argued that petitioners have directly come against the order of cognizance. If at subsequent stage, any event has taken place in favour of the petitioners the petitioners can well be advised to appear before the court below and take their defence. It was submitted that time without number it has been held that normally the order of cognizance or criminal proceeding may not be interfered with while exercising power under Section 482 of the Code of Criminal Procedure. It was submitted that this power is to be exercised in exceptional and rarest of rare cases. According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. ((3) Where an offence under this Act has been committed by a person, being a company, and the punishment for such offence is imprisonment and fine, then, without prejudice to the provisions contained in sub-section (1) or sub-section (2), such company shall be punished with fine and every person, referred to in sub-section (1), or the director, manager, secretary or other officer of the company referred to in sub-section (2) , shall be liable to be proceeded against and punished in accordance with the provisions of this Act.) Explanation- For the purposes of this section,- (a) company means a body corporate, and includes- (i) a firm; and (ii) an association of person or a body of individuals whether incorporated or not; and (b) director , in relation to (i) a firm, means a partner in the firm; (ii) any association of persons or a body of individuals, means any member controlling the affairs thereof.) 13. On perusal of aforesaid provision it is evident that petitioner no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that at subsequent stage, action taken by the accused persons may not absolve them from the charges of the present case, at least for the period between 1989 to 1997 offence for evasion of the income tax was committed by the accused persons. In any event, the return which was filed showing income as Rs. 49,470/- is still incorrect and with evasive of tax. Since the computation of the income which has taken its finality shows that income of the petitioner firm was to the tune of Rs. 88,510/-. In view of the facts of the present case, the court is of the opinion, that petitioner cannot get any benefit either from G.L. Didwania s Case (Supra) or Prem Kumar Keshri case (Supra). In G.L. Didwania s case the order of Assessing Authority was quashed by the Appellate Authority, and as such, the Apex Court was of the view, that criminal proceeding, thereafter was not sustainable. Similar was the position in the case of Prem Kumar Keshri (Supra). Accordingly, both the judgments are not applicable in the facts and circumstances of the present case. 15. So far as the point relating to non-initiation of penalty proceeding is concerned, the submission of Sri Jain in contrary to the fact recor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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