TMI Blog1993 (1) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... e first petitioner-company. For the assessment year 1986-87, the first petitioner-company filed a return after deducting certain claims under the Act. Two such claims were depreciation and investment allowance under sections 32 and 32A of the Act in respect of two items of machinery. These two machines were purchased on March 5, 1986, and March 8, 1986, respectively. If the said machines were put to use during the, accounting period, the two claims could be entertained. The assessing authority conducted enquiries and found that the machinery was not used during the accounting year and hence the assessing authority completed the assessment rejecting the two claims. An appeal was preferred by the first petitioner-company before the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Procedure Code. Learned counsel for the petitioners maintained that, as matters now stand, the very basis of the prosecution is no longer existing as a result of annexures-II and III orders. According to him, in such circumstances, annexure-I complaint is only an abuse of the process of the court and, consequently, the same has to be quashed. In the decision in Uttam Chand v. ITO [1982] 133 ITR 909 (SC), the Income-tax Officer granted registration to the firm for the assessment year 1969-70. The Income-tax Officer can celled the registration of the firm on the ground that the firm was not genuine, since one of the alleged partners stated that her signature in the records was not hers and that she was not a partner. The Tribunal found that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because the reassessment proceedings started against him for these years had not been completed. The High Court dismissed the petition. The petitioner preferred a petition under article 136 of the Constitution for special leave. The Supreme Court dismissed the petition, holding that the pendency of the reassessment proceedings could not act as a bar to the institution of the criminal prosecution for the offence under section 276C or section 277 of the Act. In considering the said aspect, the Supreme Court, in P. Jayappan's case [1984] 149 ITR 696, at page 700, adverting to the case of Uttam Chand [1982] 133 ITR 909 (SC) observed : "It is true that, as observed by this court in Uttam Chand v. ITO [1982] 133 ITR 909, the prosecution once in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal into consideration, we are constrained to hold that the appellants cannot be held to be liable for punishment under section 120B read with section 277 and section 277 (simpliciter) of the Income-tax Act, 1961, as the very basis of the prosecution is completely nullified by the order of the Tribunal which fact can be given due regard in deciding the question of the criminal liability of appellants Nos. 1 and 2. These decisions would show that the finding of the Tribunal, since it is in favour of the assessee, would take away the very basis of annexure I complaint. But learned counsel for the respondent relied on the decision of the Madras High Court in Hema Mohnot v. State by Chief CIT [1992] 198 ITR 410 to contend that, in such circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt, in Criminal M. C. No. 1047 of 1991, invoked its jurisdiction under section 482 of the Criminal Procedure Code and quashed the complaint where the prosecution was launched against the assessee under sections 276C(1) and 277 read with section 278B of the Act. In that case, the orders on the basis of which the complaints were laid were set aside by the Tribunal and reassessment was ordered. This court quashed the complaints without prejudice to the right of the respondent to file a fresh application in the light of the result of the reassessment proceedings. In the decision in W. L. Kohli v. CIT [1985] 152 ITR 154 (Delhi), the Tribunal's decision was in favour of the assessee. The application by the Department under section 256(1) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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