TMI Blog2009 (3) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year 1989-90. 2. The petitioners in Crl.M.C.4825/2000 are the co-accused arrayed in the aforesaid compliant case. 3. Both the petitions raise a common question as to whether in view of the subsequent orders passed by the Income Tax Appellate tribunal in favour of the petitioners revoking the order of penalty imposed by the assessing officer and holding that the depreciation was rightly claimed by the petitioners in respect of the machines which were purchased in the assessment year 1989-90 and further direction of the Tribunal to refund the levy of the penalty imposed upon petitioners, will it not be appropriate to quash the complaint and the summoning order by invoking the extraordinary jurisdiction of this Court under Section 482 of the Cr.P.C. 4. The relevant averments made in the complaint are as follows: 5. That the accused No.1 filed its duly signed and verified return of income on 22.12.1989, along with a total income of Rs.1,36,96,534. Sh. Manoj Khann and Sh. C.L. Sehgal attended the assessment proceedings from time to time on behalf of accused No.1. 6. That during the course of assessment proceedings, it came to the notice of the assessing officer th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Directors/Principal Officers corruptly for wrongful gains and intentionally gave false evidence in the judicial proceedings and fabricated and false evidence for the purpose of being used in the judicial proceedings, and attempted to use the same as true or genuine evidence, and when they know the same to be false and fabricated; hence, committed the offence under Sections 193 and 196 IPC. 5. On the basis of the aforesaid assertions it was prayed that the petitioners be summoned and be directed to stand trial and thereafter be sentenced accordingly. 6. It is, thereafter, that the petitioners received the summons from the Court of learned ACMM to face the trial in the aforesaid complaint. 7. Some more facts which are relevant for the purpose of deciding these cases are: (i) The Assessing Officer, while assessing the income tax of the petitioners for the assessment year 1989-90, disallowed the claim of depreciation of Rs.37,90,541.00 which was claimed by the petitioners @ 33.12% of the total costs of the new machines-TDS Horizontal Boring Machines and the allegedly purchased by the petitioners in the said year and levied a penalty of Rs.65,67,114/- on the alleged concealed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30. (iv). The appeal preferred by the petitioners before the Income Tax Appellate Tribunal, New Delhi was allowed vide order dated 26.11.2001. 8. By the aforesaid order the Appellate Tribunal accepted the contentions raised by the petitioners and after dealing the points and contentions and in this case illegalities and infirmities in the impugned assessment order dated 28.02.1991. The tribunal held that the provisions of Section 271(1)(c) cannot be applied to the circumstances of this case and accordingly cancelled the penalty order. The Income Tax Appellate Tribunal vide its order dated 26.11.2001 while allowing the appeal held: 12. We are therefore clear that the claim has been made on the aforesaid basis whatever had been claimed earlier then loses its significance. Therefore, such a circumstances of the earlier claim will not be available to the Revenue to view the conduct of the appellant tinged with any motive to avoid tax" 13. Then what remains is the claim of the appellant on the one side and the conclusion of the Revenue on the other. Though, the Tribunal had concurred with the Revenue, yet the two different views on the appreciation of the same set of facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 277 4 [, section 277A] or section 278 except with the previous sanction of the Commissioner or Commissioner (Appeals) or the appropriate authority: Provided that the Chief Commissioner or, as the case may be, Director General may issue such instructions or directions to the aforesaid income-tax authorities as he may deem fit for institution of proceedings under this sub-section. Explanation.- For the purposes of this section, "appropriate authority" shall have the same meaning as in clause (c) of section 269UA.] 5 [(1A) A person shall not be proceeded against for an offence under section 276C or section 277 in relation to the assessment for an assessment year in respect of which the penalty imposed or imposable on him under clause (iii) of sub-section (1) of section 271 has been reduced or waived by an order under section 273A.] 11. In Prem Dass Vs. ITO (Supra) while dealing with Section 279(1A) of the Income Tax Act, the Apex Court made the following observations: We also find sufficient force in the contention of Mr. Salve that the legislative mandate in Section 279(1A) of the Income Tax Act has not been borne in mind by the High Court while interfering with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c)of the Act, is no more correct in view of the order of the tribunal dated 26.11.2001 and thus, the complaint filed by the respondent against the petitioners and others cannot proceed. It is thus, prayed that the complaint pending before the ld. ACMM be quashed. 15. On the other hand, learned counsel appearing for the respondent has denied the claim of the petitioners by relying upon the provisions of Section 277 of the Income Tax Act which reads as under: 277.[False statement in verification, etc:-If a person makes a statement in any verification under this Act or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable,- (i) in a case where the amount of tax, which would have been evaded if the statement or account had been accepted as true, 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 y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion in the judgment on one of the arguments which was raised by counsel for the appellant Bank. The contention was that criminal proceedings under Section 56 of the FERA Act could not be initiated before holding adjudication proceedings in terms of Section 51 of the FERA and if only satisfied, proceed with the prosecution under Section 56 of the said Act. This argument was on the premise that first there have to be findings in the adjudication proceedings about the violation of the provisions of FERA and imposition of penalty and only in the light of those findings in the adjudication for penalty that the Directorate of Enforcement could decide as to whether to impose or not to impose any further punishment under Section 56 of the Act and thus launch prosecution or not. This argument was countered on behalf of Union of India by arguing that adjudication and prosecution are two separate and distinct proceedings with distinct purposes and there was no bar either in FERA or in any other law to an adjudication and prosecution being launched simultaneously in respect of an alleged contravention of FERA. It was argued that for the violation of those provisions both civil and criminal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioners on merits and there is a finding that there was no evasion of tax the question of culpable state of mind cannot be presumed and for that reason even the complaint filed by the petitioner which is based upon their original assumption would not survive. 21. It may be observed here that in the order of the Appellate Tribunal, the Tribunal it has been very categorically held that the claim of the revenue is not available with them in view of the conduct of the petitioners tinged without any motive to avoid the tax. The tribunal has formed an opinion that in the present case the claim of depreciation appears to be normal and bonafide as any other assessee might have been done. In the decided cases, the assessee have made such claim inspite of the judgment in Hindustan Sugar Mills case. The tribunal also quoted the judgment of the Apex Court in Cement Marketing case and held that the claim is bona fide. It is on the basis of the aforesaid legal position that the appellate authority has taken a view that the provisions of Section 271(1)(c) cannot be applied to such circumstances and therefore they had no hesitation in cancelling the penalty order pursuant where to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machine has not been used in the factory during the previous year. At the same time, the officer has referred to appellant's letter dated 26/10/90 wherein the claim was based on the use of the machine at the Exhibition. The contents of the aforesaid letter including, the following two paragraphs has been extracted in the assessment order:- In view of the above documents, we were of the opinion that since the "The Printers House Ltd." machine had been put to use on 9th and 10th February 1989 at IMTEX 89 itself by Printers House as explained above, the requirement of section 32 in regard to the claim of depreciation were duly satisfied and the claim for depreciation was accordingly made." "We would like to state that the depreciation has not been claimed on the basis of the installation in the factory premises as specified in your show cause notice." 23. In view of the aforesaid categorical finding returned by the Appellate Tribunal that the claim of depreciation by the petitioners was genuine based upon such claims made by others and there was no intention to avoid the tax at their instance; the question of petitioners having made a statement which is false or which he belie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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