TMI Blog2020 (11) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... tored to the file of ITAT vide order[ 2019 (8) TMI 1576 - ITAT AHMEDABAD] . Unless and until the said appeal is adjudicated and disposed of on merits, the demand raised by the petitioner cannot be said to have been crystallized. Under the circumstances, the continuation of prosecution under section 276C(2) of the IT Act could not be permitted as it would amount to a double whammy to the petitioner. If the ITAT has set aside the order of concealment and penalty, then there is no concealment in the eyes of law, under which circumstance, the prosecution cannot be proceeded with by the Department and the further proceedings will be illegal and without jurisdiction. The appeal is pending adjudication before the ITAT. There is no dispute about the proposition that adjudication proceeding and criminal prosecution can be launched simultaneously. Both the proceedings are independent in nature. The finding in the adjudication proceeding in favour of the person facing trial for identical violation will depend upon the nature of finding. In the present case, the allegations in both the proceedings are similar - demand raised by the Department is not crystallized as the appeal pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secured loan to the extent of ₹ 1,39,092/- came to be deleted. Resultantly, a fresh notice of demand for ₹ 15,96,800/- came to be raised under section 156 of the IT Act on 03.12.2015. 2.2 Against the order passed by the CIT(A), the petitioner-assessee preferred appeal before the Income Tax Appellate Tribunal, Ahmedabad Bench (for short, the ITAT ), which was numbered as ITA No.3604/AHD/2015. It appears that the said appeal came to be dismissed for want of prosecution vide order dated 12.01.2018. Thereafter, a penalty order came to be passed on 30.07.2018 under section 271(1)(c) of the IT Act for ₹ 8,14,180/- and notice of demand under section 156 of the IT Act came to be issued. 2.3 In the meanwhile, it appears that the petitioner had filed application being M.A. No.134/Ahd/2019 in ITA No.3604/Ahd/2015 seeking restoration of the appeal. The said application came to be allowed vide order dated 19.08.2019 and the appeal was restored on file. On 28.11.2018 the Principal Commissioner of Income Tax issued show cause notice under section 276C(2) of the IT Act for the A.Y. 2011-12. The petitioner gave his reply to the said notice inter alia stating that the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had applied with the Department for settlement of the tax dispute in March 2020 in pursuance of the scheme declared by the Union Government. The petitioner had already deposited 85% of the total demand raised by the Department . However, ignoring the fact that the tax demand had not been crystallized as the issue was pending before the ITAT, the Department rejected the request made by the petitioner for settlement of the tax dispute under the scheme. It was contended that the ground on which the Department rejected the proposal of the petitioner is baseless and without application of mind. It was, accordingly, urged that the prosecution raised by the Department under section 276C(2) of the IT Act deserves to be quashed and set aside. 4. Mr. M.R. Bhatt, learned Senior Standing Counsel appearing for the respondent Department, submitted that penalty proceedings and criminal prosecution are independent of each other and that they can be initiated simultaneously as per the provisions of the IT Act. It was submitted that there is no impediment in law for the criminal proceedings to proceed even during the pendency of proceedings under the IT Act inasmuch as the pendency of appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prosecution. While doing so, the ITAT had also granted liberty to the petitioner to file an application for restoration of the appeal. Pursuant to the dismissal of the appeal for want of prosecution, the petitioner filed restoration application being M.A. No.134/Ahd/2019, which came to be allowed, vide order dated 19.08.2019 and the appeal being ITA No.3604/AHD/2015 was restored to file. It is reported that the said appeal is pending adjudication as on date before the ITAT. Thus, evidently, the demand raised by the Department has not been crystallized since the appeal filed by the petitioner in the year 2015 against the order dated 23.10.2015 passed by the CIT(A) is still pending before the ITAT and has not adjudicated on merits. Had it been so that the petitioner had not taken the legal recourse available for restoration of the appeal dismissed for want of prosecution on 12.01.2018, then the demand raised by the Department could be said to have been crystallized. However, in the present case, the petitioner immediately took necessary legal recourse by filing the restoration application, which came to be allowed and the appeal was restored to the file of the ITAT and is pending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the person concerned shall be an abuse of the process of the Court. 9. In the present case, the allegations in both the proceedings are similar. As discussed herein above, the demand raised by the Department is not crystallized as the appeal preferred by the petitioner is pending adjudication on merits. Considering the aforesaid factual scenario and since the petitioner has already deposited a substantial part of the demand raised by the Department, this Court is of the opinion that the continuation of the prosecution against the petitioner for the same allegations could not be permitted. 10. For the foregoing reasons, the petition is partly allowed. The prosecution initiated against the petitioner by way of Criminal Case No.1622 of 2019 pending with the Court of learned 4th Additional Senior Civil Judge and Additional Chief Judicial Magistrate, Gandhinagar for the offence punishable under section 276C(2) of the Income Tax Act, 1961 shall remain stayed until the final judgment is delivered by the ITAT in the pending appeal being ITA No.3604/AHD/2015. Needless to say that the passing of this order will not preclude the Department from considering the case of the petitioner und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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