PADMALAYA MOVIES Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE accused in C.C. No. 44 of 1992 on the file of the Additional Chief Metropolitan Magistrate (EOII), Chennai, have preferred the revision aggrieved against the orders passed in M.P. No. 166 of 1997 dated December 22, 1998.THE case in brief is as follows :On March 25, 1992, the respondent filed a complaint against the petitioners for the offence under sections 276C(1) and 277 read with section 278B of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the assessment year 1982-83 and under sections 120B, 193, 196, 420 and 511 of the Indian Penal Code, 1860, alleging that subsequent to the search on December 17, 1983, and pursuant to the notice under section 148 of the Act for the said year on July 21, 1986, and later a revised return on October 28, 1987. In the course of the assessment proceedings, it was conceded the royalty of Rs. 60, 000 received by the firm for exploitation of the rights of the two pictures was not disclosed and was assessable as its income and on October 28, 1987, the assessment was completed levying the tax of Rs. 33, 360 for the said year. On March 30, 1989, a penalty of Rs. 60, 000 was also imposed on the first petitioner.

(2.) THE Commissioner of Income-tax (Appeals) also confirmed the order of penalty on August 3, 1990. THE petitioner firm preferred an appeal to the Commissioner of Income-tax under section 273A(4) of the Act and in the order dated March 23, 1994, the Commissioner of Income-tax, waived the penalties imposed on the firm for all the four years, i.e., 1982-86, under the provisions of the said Act. Hence, the petitioners cannot be proceeded against for the offence under sections 276C and 277 of the Act in view of the mandatory provisions of section 279(1A) of the Act.THE respondent opposed the application and the learned judge after hearing, dismissed the application and aggrieved against this, the present revision has been filed.Heard learned counsel for the parties.THE point that arises for consideration is whether the order passed by the court below is proper and correct.Point : It is not in dispute that the respondent filed a complaint against the accused for the offence under sections 120B, 193, 196, 420 and 511 of the Indian Penal Code, 1860, and also for the offences under sections 276C(1) , 277 and 278B of the Act relating to the assessment year 1982-8

(3.) THE revised return was made by the petitioners only after the search and after finding out the escaped assessment. It is therefore evidently clear that the accused did not disclose the income voluntarily relating to the escaped assessment of Rs. 60, 000. THE complaint against the accused is filed not only under the provisions of the Income-tax Act, but also under the various provisions of the Indian Penal Code. It is also pertinent to point out that after getting sanction from the competent authority only, the charge-sheet was filed against these petitioners.THE main contention put forward by learned counsel for the revision petitioner is that in view of the orders passed under section 273A(4) of the Act, which clearly attracts section 279(1A)(a) of the Act and under the circumstances, there is a statutory bar for continuance of the prosecution and as such the proceedings have to be closed.Learned counsel for the revision petitioner relied upon an unreported judgment of this court passed in Cr. O.P. No. 3172 of 1996, dated August 21, 1998, on the ground that in the identical case by invoking section 279(1A) of the Act, the prosecution was closed. A perusal of the order only indicated that the accused concerned in the case was charged for the offence under the sections of the Income-tax Act and not clubbed with any provisions of the Indian Penal Code.