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TMI Blog2009 (3) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... rchased 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 that accused no.1 claimed the depreciation of Rs.1,08,78,392.00 including a claim of Rs.37,90,541.00 @33-1/2% of the total cost of a new machine-TDS Horizontal Boring and Milling Machine of cost of Rs.90,98,208.00 before 31.3.1989. The said depreciation amount was checked up by the assessing officer and found to be a bogus and false claim which was added in the income of accused No.1, and the assessment was completed at a total income of Rs.167,04,156.00/- 7. That accused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 income of Rs.37,90,541/-, i.e., 300% of the tax allegedly evaded under Section 276(1)(c)of the Income Tax Act, 1961 even though the said amount was deposited by the petitioners. (ii) The petitioners assailed the order of the assessing officer by filing an appeal before CIT(A)- I. However, the same was dismissed vide order dated 08.08.1992. (iii) Against the order of the CIT(A)-I, the petitioners filed an ITR before this Court which came for disposal before a Division Bench. The High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly 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 and circumstances were present throughout the proceedings. Such controversy is also for consideration of the Hon'ble High Court. 14. We are of the opinion that the claim of the depreciation appears to be normal and bona fide as any other assessee might have done. In the decided cases, the asessee have made such claim inspite of the judgment in Hindustan Sugar Mills case. The Supreme Court held in Cement Marketing case that the claim is bonafide. Applying the ration laid down by the Supreme Court, to the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 an order of acquittal. Mr. Shukla, no doubt has indicated that the said provision will have no application as the penalty imposed has not been reduced or waived by an order under Section 273A. We do not agree with the aforesaid literal interpretation of the provisions of Section 279(1A) of the Act, when we find that the Commissioner of Income Tax (Appeal) has reduced the penalty. Further the Tribunal has totally set aside the order, imposing penalty could not have been lost sight of by the High Court while considering t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment 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 years and with fine.] 16. It is submitted that in view of the aforesaid provisions the right to take out the criminal prosecution against the accused persons in addition to taking out departmental adjudicatory proceedings is very much vested in the respondents. 17. The respondents, also submits that neither the complaint nor the summoning order can be quashed by this Court at this stage in view of the provisions contained under Section 278(E) which is applicable to the facts of this case. The said provision came into the statute boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indings 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 action could be taken under the law criminal action was not wait till the outcome of the adjudication proceedings as even when penalty was imposed in the adjudication proceedings criminal action was still warranted in view of the provisions Section 56 of the FERA which commences with the words "without prejudice to any award of penalty by the Adjudicating Officer under this Act". 15. The Court accepted the argument of the Government and held that a complaint under Section 56 of the FERA can never be said to be pre-mature if it is initiated before the award of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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 amount of penalty deposited by the petitioners has been returned to them with interest. 22. It may also be relevant to make a reference to the reasoning given by the Appellate Tribunal while reaching to the aforesaid finding which are as follows: 11. We have heard the rival parties and considered the submissions made before us by the counsel of the assessee and the ld. DR. We have perused the evidence placed before us and find that while the appellant is claiming that he has purchased the machine and, therefore, he is the owner and has also used the machine and on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 believed to be false or did not believe to be true does not arise. It also does not arise for consideration that there was any evasion of tax by the petitioners and therefore there could be no presumption of the culpable mental state or any intention, motive or knowledge of evasion of tax in this case. 24. In these circumstances leaving the matter to be decided by the ACMM in view of the provisions contained under Section 277E of the Act and for that purpose to direct the petitioners to face the trial further would only be abusing the process of Court and would be against interest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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