TMI Blog1990 (5) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... ter referred to as "assessing authority") which was duly verified by petitioner No 1. The balance-sheet of the petitioner-company was also placed before the assessing authority and the said balance-sheet showed that the assessee received Rs. 16,50,000 as preference share application money and out of that amount, preference shares worth Rs. 13,50,000 were allotted and Rs. 3,00,000 was shown as balance in share application money account. The assessing authority started investigation into the matter of receiving Rs. 16,50,000 as share money and arrived at the conclusion that the said money was the undisclosed income of petitioner No. 3 and the assessing authority ordered that the same amount be added to the income of the assessee. In this regard, the explanation given on behalf of petitioner No. 3 that the sum of Rs. 16,50,000 was received through Shri Vimal Nanda and Kapil Dev was not believed by the assessing authority. Therefore, the assessing authority passed the assessment order on March 29, 1985, holding that the said amount of Rs. 16,50,000 was the undisclosed income of the assessee under the provisions of section 68 of the Act. Notices under sections 271(1)(c), 271(l)(a) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Income-tax Appellate Tribunal, Chandigarh, vide orders dated October 27, 1988. The petitioners, therefore, alleged that, from the order of the Commissioner of Income-tax (Appeals), Ludhiana, as well as the Appellate Tribunal, it is quite clear that the petitioners did not make any attempt, much less wilful attempt, to evade tax or furnished any wrong return and as such no offence under sections 276C(1), 277 and 278 can be said to have been committed by them. As per the order of the appellate authorities, the verification made by petitioner No. 1 on page No. 3 of the return of income for the assessment year 1982-83 filed on December 14, 1981, is a correct statement. Therefore, no offence under section 277 of the Act or under sections 193 and 196, Indian Penal Code, is made out against the petitioners. The petitioners also alleged that before filing the complaint, no notice/ opportunity was given to them to enable them to meet out the case filed against them. Respondents Nos. 1 and 2 were duty bound under law to give hearing to them before launching the present criminal complaint against them. The petitioners further pleaded that the respondents have filed the present co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed in this case. After the filing of the complaint, an order was passed by the Commissioner of Income-tax (Appeals) and the Settlement Commission. The contention of learned counsel for the petitioners is that, in the light of these orders, no cause of action survives. The material parts of sections 276C and 277 of the Act and sections 193 and 196 of the Indian Penal Code read as follows : "276C. Wilful attempt to evade tax, etc.-(1) If a person wilfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable ; (i) in a case where the amount sought to be evaded exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine ; (ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine. (2) If a person wilfully attempts in any manner whatsoever to evade the payment of any tax, penalty or interest und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication as given in the complaint is as follows : "I, Sant Parkash, s/o. Shri Ram Lubhaya being the ....... of ..... solemnly declare that to the best of my knowledge and belief the information given in this return and the annexures and statements accompanying it is correct and complete and that the amount of total income and other particulars shown therein are truly stated and relate to the previous year (s) relevant to the assessment year 1982 ... I further solemnly declare that during the said previous year (s) (a) no other income accrued or arose to or was received by the company from any asset held in the name of the company or in the name of any other person. (b) there is no other income including income of any other person in respect of which the company is chargeable to tax under the Income-tax Act, 1961. I further solemnly declare that during the said previous year (s) :- (a) no other income accrued or arose to or was received by the person in respect of whose total income the company is assessable from any asset held in the name of the person in respect of whose total income the company is assessable or in the name of any other person. (b) there is no other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to all these facts and circumstances, we are of the view that this is not a case where complete immunity from imposition of penalty under section 271(1)(c) should be granted. In our view, a penalty of Rs. 3 lakhs will meet the ends of justice." In a similar situation, the apex court in P. Jayappan v. S. K. Perumal, First ITO [1984] 149 ITR 696 had examined the desirability of continuance of criminal proceedings and observed as under (at p. 700) : "In the criminal case, all the ingredients of the offence in question have to be established in order to secure the conviction of the accused. The criminal court no doubt has to give due regard to the result of any proceeding under the Act having a bearing on the question in issue and in an appropriate case it may drop the proceedings in the light of an order passed under the Act. It does not, however, mean that the result of a proceeding under the Act would be binding on the criminal court. The criminal court has to judge the case independently on the evidence placed before it. Otherwise, there is a danger of a contention being advanced that whenever an assessee or any other person liable under the Act had failed to convince t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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