TMI Blog2015 (9) TMI 1740X X X X Extracts X X X X X X X X Extracts X X X X ..... the Petitioner : S Ravi. For the Respondent : Public Prosecutor TG. ORDER:- This petition is filed under Section 482 Cr.P.C., for quashing all further proceedings in C.C.No.109 of 2007 on the file of the Special Judge for Economic Offences, Hyderabad, filed by the 1st respondent under Section 276C of the Income-Tax Act, 1961 (hereinafter referred to as the Act ). 2. The allegation of the complainant is that for the assessment year 2003-04, the petitioner/accused declared his total income at Rs.17,03,060/-. As per the computation sheet filed along with the return of the income, the total tax payable was Rs.5,09,164/- and after giving credit for Tax Deducted at Source amounting to Rs.1,17,000/-, the assessee has to pay Rs.4,59,322/- under self-assessment and has to file a proof of such payment along with return. The petitioner/assessee has not paid the said tax and did not file proof of payment, and hence he is treated as a defaulter. On 08-03-2004, the return of the income was processed and tax payable was determined at Rs.4,78,913/-. This amount was collected by the department from the Income-tax refund due to Smt. Parneet Kaur Bagga on 08-11-2005 after obtaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision to punish the assessee who is guilty of tax evasion. Prosecution is entirely different from the process of recovery which is contemplated in Schedule II of the Act. It is submitted that the provisions of Section 276C of the Act are para materia with Order XXI of C.P.C., laying down elaborate procedure for recovery of taxes which are quantified and assessed in the hands of the assessee. The Department has all the powers of a civil Court virtually to attach and sale movable as also immovable property belonging to the defaulting assessee. Even the provision of detention of an assessee to civil imprisonment is provided. Therefore, it is submitted that when the returns are filed and tax was paid within the permitted time or if there is any dispute, launching criminal prosecution under Section 276C is onerous without taking recourse to the other provisions of the Act. Therefore, launching of the criminal prosecution is nothing but subjecting the assessee to needless harassment and hence all further proceedings in the calendar case may be quashed. 7. In that view of the matter, what is required to be seen is as to whether the petitioner/assessee has conducted himself in the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but in order to attract the stringent provisions of criminal prosecution what is required is that there should be a wilful attempt to evade any tax, penalty or interest. The explanation appended to the Section, as seen above, makes it clear as to what acts of an assessee can be brought within the ambit of a person guilty of wilful attempt to evade any tax. 9. The explanation provides for four categories of acts which encompasses the conduct to come within the ambit of wilful attempt. 10. Learned Counsel appearing for the petitioner/assessee strenuously submitted that in the case in hand, the assessee has filed the return declaring his income and also the tax payable by him. Upon processing the return, which is filed under Section 139 of the Act, if there is any defect, the Assessing Officer can call upon the assessee to rectify the defects, if any, noticed. Section 143 of the Act provides for assessment and after computing the same, an intimation shall be sent to the assessee specifying the sum determined to be payable or the amount of refund due to assessee. The penalties imposable, for failure to furnish return, comply with notices, concealment of income etc., is incorpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh than any other provisions of the Act even severe than Parts I to VI of Schedule-II of the Act, the basic requirement is the satisfaction of the Revenue that there was wilful attempt to evade tax. It is no doubt true that prosecution under Section 276C of the Act is without prejudice to any penalty that may be imposable on an assessee but the authorities should take notice of the following observations of the Constitution Bench of the Supreme Court made as long back as in 1957 in the decision reported in PANNALAL BINJRAJ v. UNION OF INDIA [AIR 1957 SC 397] viz., A humane and considerate administration of the relevant provisions of the Income Tax Act would go a long way in allaying the apprehensions of the assessees and if that is done in true spirit, no assessee will be in a position to charge the revenue with administering the provisions of the Act with an evil eye and unequal hand. 12. Learned Counsel appearing for the petitioner has relied upon a decision of the Supreme Court reported in K.C.Builders and Anr. V. The Assistant Commissioner of Income Tax [(2004) 2 SCC 731] 13. In the case before the Apex Court, the assessee was unsuccessful in his attempts to get the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judgment squarely applies to the facts and circumstances of the case on hand. In this case also, similarly, the application was moved by the assessee before the Magistrate to drop the criminal proceedings which were dismissed by the Magistrate and the High Court also on a petition filed under Sections 397 and 401 of the Code of Criminal Procedure, 1973 to revise the order of the Additional Chief Metropolitan Magistrate has also dismissed the same and refused to refer to the order passed by the competent Tribunal. As held by this Court, the High Court is not justified in dismissing the criminal revision vide its Judgment ignoring the settled law as laid won by this Court that the finding of the appellate Tribunal was conclusive and the prosecution cannot be sustained since the penalty after having been cancelled by the complainant following the appellate Tribunal s order, no offence survives under the Income Tax Act and thus quashing of prosecution is automatic. 27. In the instant case, the penalties levied under Section 271(1)(c) were cancelled by the respondent by giving effect to the order of the Income Tax Appellate Tribunal in I.T.A.Nos.3129-3132. It is settled law that l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. It is a well-established principle that the matter which has been adjudicated and settled by the Tribunal need not be dragged into the criminal Courts unless and until the act of the appellants could have been described as culpable. 14. Bearing in mind the above principles enunciated by the Supreme Court and in view of the submissions made by the learned senior Counsel appearing for the petitioner, what could be stated is that continuing the criminal prosecution of the petitioner/assessee will be subjecting the assessee to needless harassment in view of the facts and circumstances noted hereunder:- In the instant case, the complaint is that an additional demand was raised for Rs.70,647/- on 27-01-2006. It is admitted that the assessee has paid the same on 17-11-2006 and due to oversight, he again paid the said amount on 25-06-2007. Proof thereof is produced. It is not disputed. In that view of the matter, all further proceedings are liable to be quashed. 15. In the result, the Criminal Petition is allowed quashing all further proceedings in C.C.No.109 of 2007 on the file of the Special Judge for Economic Offences at Hyderabad against the petitioner/accused. Miscella ..... X X X X Extracts X X X X X X X X Extracts X X X X
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