TMI Blog2023 (7) TMI 1283X X X X Extracts X X X X X X X X Extracts X X X X ..... es, allowed the Appeal - HELD THAT:- As applying the ratio laid down in Radheshyam Kejriwal's case [ 2011 (2) TMI 154 - SUPREME COURT ] when the findings of the Income Tax Appellate Tribunal are in favour of the petitioners, a criminal prosecution on the same set of facts is not maintainable and is unsustainable and the same is liable to be quashed. Decided in favour of assessee. - Honourable Mr. Justice V. Sivagnanam For the Petitioners : Mr.N.R.Elango Senior Counsel for M/s.Aruna Elango For the Respondent : Mrs.M.Sheela Special Public Prosecutor ORDER This Criminal Original Petition has been filed challenging the criminal proceedings in E.O.C.No.390 of 2018 on the file of the Additional Chief Metropolitan Magi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Senior Counsel appearing for the petitioners that, when the Appellate Tribunal has exonerated the petitioners on merits, a criminal prosecution on the same set of facts will not be maintainable, and hence, he submitted that the complaint filed by the respondent is liable to be quashed. In support of his submissions, the learned Senior Counsel relied upon the judgments of the Hon'ble Supreme Court in the cases of J.Sekar v. Directorate of Enforcement reported in (2022) 7 SCC 370 , and R.Vasudevan v. The Deputy Commissioner of Income Tax, Central Circle-1(1) reported in MANU/TN/6309/2022. 3. Learned Special Public Prosecutor appearing for the respondent/Department submitted that the Department reassessed the petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 38,84,470/- under Section 271(1)(c) of the Income Tax Act, 1961, which was challenged by the petitioners before the Commissioner of Income Tax (Appeals), Chennai, who dismissed the Appeal filed by the petitioners. 6. Challenging the order of the Commissioner of Income Tax (Appeals), the petitioners preferred further Appeal before the Income Tax Appellate Tribunal, which allowed the Appeal, finding that the penalty imposed under Section 271(1)(c) would not be applicable. Further, on a perusal of the Appellate Tribunal's order, it is seen that, in Para No.7 of the order, the Appellate Tribunal has found that the estimate made by the Department is without any material. The observations made by the Appellate Tribunal are reproduced hereu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that no penalty can be imposed in case where additions are made merely on the basis of estimate. In the case CIT Vs. Pavankumar Dalmia reported in 168 ITR 1, the Hon'ble Kerala High Court has held that where there was nothing to show that the plea of the assessee was false or inherently impossible, penalty cannot be imposed. That being the case, we wonder how penalty can be levied in the case of the assessee where addition is made based on only presumption. 7. From the observations of the Appellate Tribunal, it is clear that the Appellate Tribunal factually found that there is no material for cash payment made by the petitioners and in these circumstances, allowed the Appeal. The Hon'ble Supreme Court in the case of J.Sekar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cedure Code; (vi) The finding in the adjudication proceedings in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceedings is on technical ground and not on merit, prosecution may continue; and (vii) In case of exoneration, however, on merits where the allegation is found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue, the underlying principle being the higher standard of proof in criminal cases. In view of the facts of the present case and applying the ratio laid down by the Hon'ble Supreme Court in Radheshyam Kejriwal's cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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