TMI Blog2013 (6) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... C of the Act. It is clear that the issue involved before the Commission was quite different whereas the prosecution that has been launched is quite different, i.e., for non-filing of the return even after the notice. In this view of the matter, the judgments relied on by the petitioners are not applicable to the present case, as explained hereinabove and the judgments that have been relied on by the respondents are by and large very near to this case and, as such, the order of cognizance cannot be held to suffer from any infirmity. - Decided against the assessee. - - - - - Dated:- 6-2-2013 - SHIVAJI PANDEY J. JUDGMENT Shivaji Pandey J.-Since in all these batch cases common points are involved, with the consent of the parties, they have been heard together and are being disposed of by this common order. In all these cases common points have been raised, as such, in order to avoid repetition of facts, the facts of only one case (Crl. Misc. No. 17189 of 2011) are being incorporated. The first point that has been raised on behalf of the petitioner is as to whether the prosecution under section 276CC of the Income-tax Act, 1961 (hereinafter, in short, referred to as "t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und that receipts from the schools were directly credited in the personal account of the accused and his family members. Schools are practically run as the proprietorship concern of the accused petitioner and his family members and in the complaint petition, it has been mentioned that the accused persons deliberately and wilfully avoided the income-tax proceeding and did not file the income-tax return nor the petitioner offered any plausible explanation in the show cause reply, on getting sanction from the appropriate authority, as such, the prosecution under section 276CC of the Act was launched. The case was registered and the court took cognizance, vide order dated December 23, 2009, under section 276CC of the Act. In this case, counsel for the petitioner submits that the order of cognizance is bad in law also on facts on the ground, in the complaint petition, though the facts have been mentioned therein but there is nothing in the body of the complaint petition to show the amount of evasion of tax by the petitioner which is the sine qua non for a proceeding under section 276CC of the Act. He has further submitted that the Settlement Commission found that the petitioner had di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prabhakar, HUF v. Asst. CIT [1996] 217 ITR 553, Deepak Engineering Works v. CIT [2011] 243 CTR Patna 278 ; [2013] 352 ITR 161 (Patna) and Raghunath Pandey v. State of Bihar [1998] 232 ITR 908 (Patna). It appears from the record before filing an application before the Settlement Commission at Kolkata that the petitioner has deposited an aggregate amount of Rs. 1,34,08,582 in Form No. 34B of the Act. The Income-tax Settlement Commission which is a High Power Tribunal under the Income-tax Act found the disclosure by the petitioner to be true and accepted the statement of income. With regard to the issue of granting of immunity from the future prosecution and penalty and waiver of interest part leviable under the provisions of the Act, the Tribunal held, the waiver of interest was not allowed and held that the interest would be charged as per law by the Assessing Officer, keeping in view the decision of the hon'ble Supreme Court passed in Brij Lal v. CIT [2010] 328 ITR 477 the Tribunal granted immunity from penalty under the Act for all the years involved in the settlement application. While considering the issue of granting immunity in connection with the present prosecution alread ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (1) of section 139, has not made a return or a revised return under sub-section (4) or sub-section (5) of that section or fails to comply with all terms of notice under sub-section (1) of section 142 or fails to comply with a direction issued under sub-section (2A) of that section, or having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143, the Assessing Officer, after taking into account all relevant materials which the Assessing Officer has gathered, shall, after giving the assessee a opportunity of being heard, make the assessment of the total income or loss to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment. Section 147 of the Act provides the income escaping assessment which provides that the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153 assess escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inafter provided : Provided that no such application shall be made unless- (i) in a case where proceedings for assessment or reassessment for any of the assessment years referred to in clause (b) of sub-section (1) of section 153A or clause (b) of sub-section (1) of section 153B in case of a person referred to in section 153A or section 153C have been initiated, the additional amount of income-tax payable on the income disclosed in the application exceeds fifty lakh rupees." "245H. Power of Settlement Commission to grant immunity from prosecution and penalty.-(1) The Settlement Commission may, if it is satisfied that any person who made the application for settlement under section 245C has co-operated with the Settlement Commission in the proceedings before it and has made a full and true disclosure of his income and the manner in which such income has been derived, grant to such person, subject to such condition as it may think fit to impose immunity from prosecution for any offence under this Act or under the Indian Penal Code (45 of 1860) or under any other Central Act for the time being in force and also (either wholly or in part) from the imposition of any penalty under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn, though he made a prayer for extension of time. It is a fact that after paying the tax, he filed an application before the Settlement Commission who found that the petitioner had disclosed the income truly and correctly, and also agreed to pay the tax on the income computed and for that reason, the immunity for penalty as well as prosecution on other issues excluding pending criminal case under section 276CCC of the Act which was already launched against the petitioner. Section 276CC of the Act deals with the situation if the person wilfully fails to furnish return in due time on the income or fringed benefit which he is required to furnish under sub-section (1) of section 139 or by notice given under clause (1) of section 142 or section 148 or section 153A of the Act, shall be liable for prosecution. In a case where the amount of tax which would have been evaded if the failure had not been discovered exceeding twenty five thousand rupees with rigorous imprisonment for a term which shall not be less than six months and may extend to seven years with fine and in any other case shall not be less than three months, but may extent to three years with fine, but a person shall not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the revised return, the assessee has submitted the income of the original return with a revised return vis-a-vis there was no concealment of any income. In view of the aforesaid finding of non-concealment of income by the assessee, which set aside the order of concealment and penalty, as there was no concealment, therefore, the prosecution for concealment cannot proceed with at the instance of the complainant and further proceeding was quashed holding it as without jurisdiction. In this case, there is no such finding of fact. So this case is not applicable to the facts of the present case. With regard to the two judgment of this court, so far one in the case of Mahadeo Lal Agrawal [1997] 224 ITR 119 (Patna) is concerned, it is not applicable to the present case as it was a case of regular assessment where the person was prosecuted on the ground that the petitioner had fraudulently and dishonestly made a false assessment about his income for the verification of the return for the year 1974-75 and thereby dishonestly induced the income-tax authority to assess on the lesser amount causing loss to the Income-tax Department and wrongful gain to him. The court has held that if the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings and criminal prosecutions can be launched simultaneously; (ii) Decision in adjudication proceedings is not necessary before initiating criminal prosecution ; (iii) An adjudication proceedings and criminal proceedings are independent in nature to each other ; (iv) The finding against the person facing prosecution in the adjudication proceedings is not binding on the proceeding for criminal prosecution, 1973 ; (v) An adjudication proceedings by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of article 20(2) of the Constitution or section 300 of the Code of Criminal Procedure, 1973 ; (vi) The finding in the adjudication proceedings in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceedings is on technical ground and not on the merits, prosecution may continue ; and (vii) In case of exoneration, however, on the merits where the allegation is found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue, the underlying principle be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plaint petition it does not disclose the offence alleged, the proceeding will be an abuse of the process of the court. Those cases are not applicable to the facts of the present case. Let us examine the judgments relied on by learned counsel for the Income-tax Department for the proper appreciation of the argument of the other side. Learned counsel for opposite party No. 2 has relied on the judgment in the case of CIT v. Om Prakash Mittal reported in [2005] 273 ITR 326 (SC). There the issue was raised that the order was obtained by fraud and an application for revival of the proceeding before the Commission was filed and the Commission refused to reopen the proceeding as the Commission is of the view that the Commission did not possess power. The Commission would go into the merit regarding the genuineness of the loans that would amount to re-appraisal and re-evaluation of the evidence which was already appraised by the earlier Bench and it would amount to sitting in judgment over the findings arrived at the earlier Bench which was not legally permissible to the Commission to review its own decision. The matter went to the hon'ble Supreme Court where the hon'ble Supreme Court c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner for the failure to produce the accounts and documents despite service of notice will be an abuse of the process of the court and there also a point was raised that the assessment order was already unsettled that will be a good ground for interference in the criminal proceeding. The court has come to the conclusion that penalty proceeding was initiated that will not be a ground to absolve the assessee from filing incorrect and false return thereby clubbing the income of M/s. Deepak Electrical. The court has held that that action taken at the subsequent stage 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. The allegation was made for wilful attempt to evade tax, interest or penalty due to concealment of particulars of income. The court has refused to interfere with the order of criminal proceeding and refused to exercise the inherent power in favour of the assessee. In another judgment in the case of K. Jagadeesan v. ITO reported in [1993] 199 ITR 307 (Mad) where the point was raised that charging of interest by the I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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