TMI Blog2022 (6) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 153 B of the Act. Therefore, it was held that the assessments for the five assessment years on 24.09.2008 are bad in law. Essentially, the Income Tax Appellate Tribunal disposed the appeals only on the ground of limitation and not on merits. It is further observed that other grounds relating to merits become an academic exercise, meaning that other issues raised in the complaint, especially the allegations raised in the complaints with regard to non filing of return of income, non payment of advance tax, non payment of the tax demanded, suppression of true and correct income by not filing return of income had not been considered by the Income Tax Appellate Tribunal. When the matter was not decided on merits, but only on technical ground of limitation, this Court is of the considered view, on the basis of the principles settled in Radheshyam Kejriwal Vs. State of West Bengal and another [ 2011 (2) TMI 154 - SUPREME COURT ] that petitioner cannot seek to quash the proceedings in E.O.C.C.Nos.101, 102, 103, 104, 105 of 2015 on the ground that Income Tax Appellate Tribunal had set aside the assessment orders. As seen from the complaint allegation that despite, givi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Complaint in E.O.C.C.No.101 of 2015: Petitioner/accused is a cine actor and Director deriving income from remuneration for acting in movies and also directing movies. He ought to have filed his return of income for the assessment year 2002-2003 on or before 31.07.2002. However, he did not filed his return of income within the due date prescribed by the statute and thus contravened the provisions of Section 139 (1) of the Income Tax Act, 1961. It is an offence punishable under Section 276 CC of Income Tax Act, 1961. He ought to have paid the advance tax within the prescribed dates of 15.09.2001, 15.12.2002 and 15.03.2002 and filed the relevant return for the assessment year 2002-2003 on or before 31.07.2002. Petitioner did not pay advance tax and failed to file return of income within the statutory due date. Thus, committed the offence under Section 276 CC of the Income Tax Act, 1961 by concealing true the correct income by not filing the return of income and committed an offence under Section 276 C (1) Income Tax Act, 1961. The survey operations under Section 133 A were conducted on 04.09.2003 and a search was conducted on 26.10.2005. It revealed unaccounted receipt of mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealize the garnishee amounts. Agricultural lands and the flats belonging petitioner were placed under provisional attachment under Section 281 B of the Income Tax Act. Original assessment was confirmed in appeal on 31.03.2014. Even, thereafter, petitioner has not paid the arrears. A notice under Section 153 (A) of Income Tax Act, dated 07.07.2006 was issued to the petitioner to prepare a true and correct return of total income including undisclosed income for the assessment year 2002-2003, within 45 days from the date of service of the notice. It was acknowledged on 22.07.2006. Petitioner ought to have filed return of income on or before 05.09.2006, he failed. Again a show cause notice dated 26.10.2006 was issued to the petitioner to show cause why the prosecution under Section 276 CC of the Income Tax Act, 1961 should not be initiated. It was acknowledged on 11.01.2007. A reminder dated 11.01.2007 was issued. There was no reply from the petitioner. Assessment under Section 153 A r/w. Section 144 was completed on 24.09.2008 on a total income of Rs.2,00,56,592/-. Based on the materials seized a sum of Rs.1,70,56,592/-representing the money received for the remuneration of the film & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly on 15.09.2004. A notice under Section 153 (A) of income Tax Act was issued on 07.07.2006 to prepare a true and correct return of total income including the undisclosed income and that was acknowledged by the petitioner on 22.07.2006. Petitioner did not file the return of income and therefore a show cause notice dated 26.10.2006 was issued. Assessment was completed on 24.09.2008 on a total income of Rs.1,93,82,227/-, taking into consideration, the material seized. Total gross demand was determined at Rs.1,26,05,955/-. The appeal filed by the petitioner was dismissed by a common order on 31.03.2014. Tax recovery officer issued notices in ITCP 1 to the petitioner on 11.06.2014. Stay petition filed by the petitioner was dismissed by Income Tax Appellate. Petitioner willfully failed to file return of income for the assessment year 2003-2004 and violated the provisions of Section 139 (1), 148 and 153 A of Income Tax Act, 1961, punishable under Section 276 CC of Income Tax Act; did not pay the advance tax and the demand raised under Section 144 r/w 153A, which amounts to commission of offence under Section 276 C (2) of Income Tax Act; willfully and deliberately concealed his true an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. Petitioner is entitled to claim of carry forward loss only if the return is filed on or before the statutory due date. The return of income was treated as defective and petitioner was directed to rectify the defects. However, petitioner did not rectify the defects. The defective return filed on 28.10.2005 is non-est in law. Based upon information and material gathered during search, statutory notice under Section 153 A of Income Tax Act, 1961 dated 07.07.2006 was issued calling the petitioner to prepare a true and correct return of total income including the undisclosed income, for the assessment year 2004-2005. It was acknowledged on 22.07.2006. Petitioner did not file the return of income and therefore, a show cause notice under Section 153 A dated 26.10.2006 was issued. There was no reply. Based on the materials seized, the assessment was completed determining the total gross demand at Rs.1,32,63,662/-. Penalty proceedings for concealment of income were initiated simultaneously. Tax Recovery Officer issued notices in ITCP 1, to the petitioner on 11.06.2014. Stay petition filed by the petitioner was dismissed by Income Tax Appellate Tribunal. Petitioner willfully failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed could not be substantiated by the petitioner. Petitioner did not pay the amount raised. Tax Recovery Officer issued notices in ITCP 1 to the petitioner. Petitioner is an affluent person deriving income from acting and direction of films. He willfully and deliberately attempted to evade tax and interest. Thus, he is liable to be prosecuted for the offence under Section 276 C (1), 276 C (2), 276 CC and 277 of the Income Tax Act, 1961. 8.Challenging these petitions, the aforesaid criminal original petitions have been filed for quashing the proceedings. 9.Learned counsel for the petitioner assailed the taking cognizance of these cases on the grounds that, i)the complaint is pre-mature, when the proceedings before the department are yet to conclude and reach finality. ii)The assessment order passed by the Assessing Officer, confirmed by the CIT (A) have been set aside by the Income Tax Appellate Tribunal declaring the Assessment orders as null and void. iii)the Income Tax Appellate Tribunal makes it clear that the petitioner is not liable to pay any tax penalty or interest that could be chargeable or imposable under the Income Tax Act by the department. iv)W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... When the ingredients of offence are clearly made out in the complaint to establish that the accused has committed the offence, the complaint cannot be quashed. 11.Learned counsel for respondent relied on the following judgments reported in 1984 AIR SC 1693 P.Jayappan Vs. S.K.Perumal, I.T.O, 1995 214 ITR 778 Mad, Tip Top Plastic Industries Pvt. Ltd. Vs. ITO, (2011) 3 SCC 581 Radheshyam Kejriwal Vs. State of West Bengal and another in support of her submissions. 12.Considered the rival submissions and perused the records. 13.It is seen from the submission made by the learned counsel appearing for the parties, especially, learned counsel for petitioner that petitions for quashing the proceedings in E.O.C.C.Nos.101, 102, 103, 104, 105 106 of 2015 have been filed mainly on the grounds that the proceedings before the department have not come to conclusion and therefore, the filing of the complaint is pre-mature and that the Income Tax Appellate Tribunal declared the assessment orders as null and void and therefore, the prosecution of criminal cases would be an abuse process of law. Learned counsel for respondent pressed into service the judgment reported in (2011) 3 SCC 581 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal or binding in the other, as both the cases have to be decided on the basis of the evidence adduced therein.... 32.There are authorities of this Court in relation to the Income-tax Act in this regard. The first in the series is the judgment of this Court in the case of Uttam Chand and others vs. Income Tax Officer, Central Circle, Amritsar (1982) 2 SCC 543 in which registration of firm was cancelled on the ground that it was not genuine and prosecution initiated for filing false return. However, in appeal, the Income Tax Appellate Tribunal reversed the finding and held the firm to be genuine. Relying on that, this court quashed the prosecution inter alia observing as follows : 1. Heard counsel, special leave granted In view of the finding recorded by the Income Tax Appellate Tribunal that it was clear on the appraisal of the entire material on the record and Shrimati Janak Rani was a partner of the assessee firm and that the firm was a genuine firm, we do not see how the assessee can be prosecuted for filing false returns. We, accordingly, allow this appeal and quash the prosecution. 2. There will be no order as to costs. 33.In the case of G.L. Didwania an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound on merit that there is no contravention of the provisions of the Act in the adjudication proceeding, the trial of the person concerned shall be in abuse of the process of the court. 14.The reading of this judgment makes it clear that adjudication proceedings and criminal proceedings can be launched simultaneously and they are independent in nature to each other. The adjudication proceedings is not binding on the proceedings for criminal prosecution. It may be relevant, if the adjudication proceedings in favour of person facing the trial decided on merits and in favour of him. However, if the exoneration in adjudication proceedings is on technical ground and not on merit, the prosecution may continue. 15.In the judgment reported in 1984 AIR 1693 P.Jayappan Vs. S.K.Perumal, it is observed that, pendency of re-assessment proceedings cannot act as bar to the institution of criminal proceeding and it cannot in such circumstances amount to abuse of process of Court. 5.At the outset it has to be stated that there is no provision in law which provides that a prosecution for the offences in question cannot be launched until reassessment proceedings initiated against the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .As stocks to the value of Rs. 4,93,177 are alleged to have been concealed, the first respondent would allege that the income to the abovesaid value has been suppressed and this will attract punishment under sections 276C and 277 of the Act. But learned senior counsel for the petitioners, Mr. V. Ramachandran, would argue that only if the income-tax authorities find that the real income was concealed and the return of income is false, the criminal court can find the petitioners guilty of the offence and, therefore, the assessing authority has to find out whether the original assessment submitted in October, 1981, for the period ended with March 31, 1981, is not correct. .....Therefore, when the records seized discloses short statement of stock, certainly the Income-tax Officer is entitled to proceed against the petitioners-assessees according to law, for the fresh assessment and also for prosecution. Hence, the above decisions cited by learned senior counsel do not help the petitioners to avoid the criminal prosecution. 8. The next line of argument of learned senior counsel for the petitioners is that as the assessment order of the Income-tax Officer has been set aside by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground of limitation and not on merits. It is further observed that other grounds relating to merits become an academic exercise, meaning that other issues raised in the complaint, especially the allegations raised in the complaints with regard to non filing of return of income, non payment of advance tax, non payment of the tax demanded, suppression of true and correct income by not filing return of income had not been considered by the Income Tax Appellate Tribunal. When the matter was not decided on merits, but only on technical ground of limitation, this Court is of the considered view, on the basis of the principles settled in (2011) 3 SCC 581 Radheshyam Kejriwal Vs. State of West Bengal and another, that petitioner cannot seek to quash the proceedings in E.O.C.C.Nos.101, 102, 103, 104, 105 of 2015 on the ground that Income Tax Appellate Tribunal had set aside the assessment orders. 20.It is seen from the complaint allegation that despite, giving notice, statutory notice as detailed in the complaint, petitioner has not filed return, paid advance tax and tax demanded, suppressed the real and true income by not filing the return in time. These issues have to be necessaril ..... X X X X Extracts X X X X X X X X Extracts X X X X
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