9911796707
TMI Blog2012 (9) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... em Tailor and others and all the subsequent proceedings arising therefrom. The case of the complainant, in brief, is that accused No.1 M/s Prem Tailors was a partnership concern whereas accused No.2 Prem Nath and accused No.3 Rajinder Pal were its partners. The accused filed their return with regard to assessment year 1993-94 on 31.1.1994 declaring their income as Rs. 5810/- along with other documents. Notices were issued under Section 142(1) and 143(2) of the Income Tax Act, 1961 to the accused. The Income Tax Officer after taking into consideration all the impounded material framed the assessment at an income of Rs. 5,79,500/-, thus, making an addition of Rs. 5,73,690/- to the return income of Rs. 5810/-. Penalty and demand notices were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posed on the petitioners had been quashed by the Tribunal, the criminal prosecution of the petitioners was liable to be quashed. In support of his argument, learned counsel has placed reliance on 'K.C.Builders and another versus Assistant Commissioner of Income-tax, Income Tax Reporters (Vol. 265) 562. The Apex Court has held as under:- "In our view, once the finding of concealment and subsequent levy of penalties under section 27(1)(c) of the Act has been struck down by the Tribunal, the Assessing Officer has no other alternative except to correct 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, wherein, it has been held that if the penalty proceedings have been set aside in the deparmental proceedings then the very basis of launching of the prosecution against the assessee stands knocked down. In such facts, the Supreme Court had quashed the proceedings initiated under the Income-tax Act against the assessee. In view of the said judgment, I find that the prosecution against the petitioner is an abuse of the process of law. The very basis of penalty has been struck down by the authorities under the Act." Learned counsel for the respondent, on the other hand, has opposed the petition but has failed to controvert the submissions made by the learned counsel for the petitioners. After hearing learned counsel for the parties, I am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings were continuing upto the date of issuance of penalty notice i.e. dated 24.2.1994. This is also undisputed that no penalty notice under Section 271(1) (c) of the Act was issued in the course of assessment proceedings. Thus, in view of the factual details filed by the assessee, as reproduced above, in the matter of date of filing of the return, date of processing the return and date of issuance of the said notice, it is evident that the penalty notice, dated 24.2.1994, has been issued not in the course of survey proceedings under section 133A of the Act, but after its closure. Thus, there is jurisdictional defect in assumption of jurisdiction for levy of penalty, which cannot be cured. Consequently, the impugned penalty notice has been ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
