ITO Vs. NANDLAL & CO.

JUDGEMENT

(1.) As common question of law arises for consideration in the above-referred matters, they are being disposed by this common judgment and order. (The facts are taken from Criminal Revn. Appln. No. 132 of 1998). By this revision application, the revision-applicant prayed for to quash and set aside the judgment and order dt. 27th Jan., 1998 passed by learned 2nd Addl. Sessions Judge, Nagpur in Criminal Misc. Criminal Revn. Appln. No. 823 of 1997.

(2.) It is the case of the revision-applicant that as an ITO a Criminal Complaint No. 138 of 1992 was filed by the applicant alleging offences punishable under ss. 276C and 277 of the IT Act, 1961 in the Court of Chief Judicial Magistrate, Nagpur. In that proceeding, the non-applicant had moved an application for discharge on the ground that Tribunal had set aside the penalty and, therefore, prosecution could not be sustainable. The Trial Court had rejected the application filed by the non-applicant, therefore, the revision application was filed before the learned Sessions Judge, Nagpur. By judgment and order dt. 27th Jan., 1998 the learned 2nd Addl. Sessions Judge, Nagpur allowed the revision of the non-applicant and discharged them.

(3.) At the hearing of this application, it is submitted as regards the allegation of concealment of income, that penalty proceedings initiated under s. 271(1)(c) of the IT Act were started by the Department which were quashed by the Tribunal. In that matter, the Department had filed reference against the order of the Tribunal which was admitted on the basis of some allegations of alleged concealment of income. My attention has been invited to rulings of the apex Court in the case of G.L. Didwania & Anr. vs. ITO & Anr., 1995 Supp2 SCC 724. The apex Court considered the question as to whether the appellant in that case made a false statement regarding the income which according to the assessing authority had escaped the assessment. It was held that on this issue the finding of the Tribunal was conclusive and, therefore, the prosecution cannot be sustained. Accordingly, it was concluded that the criminal proceedings were liable to be quashed. It is, therefore, submitted that the question as to whether the prosecution can be sustained in view of the order passed by the Tribunal is answered by the apex Court to the effect that once the finding of the assessing authority that assessee made a false statement is set aside by the Tribunal, the criminal proceedings would not be sustainable because the finding of the Tribunal is conclusive. Earlier also, in the ruling in K.C. Builders & Anr. vs. Asstt. CIT, 2004 265 ITR 562, on the identical issue the apex Court had observed that before penalty under s. 271(1)(iii) may be imposed it has to be proved that the assessee has consciously made the concealment or furnished inaccurate particulars of income. The ruling concluded that it is an established principle that the matter which has been adjudicated and settled by the Tribunal need not be dragged into criminal Courts unless and until the act of the appellant could have been described as culpable. In another ruling in H.T. Power Structure (P) Ltd. vs. R.P. Sharma & Anr., 2008 299 ITR 363 it appears concluded that when penalty has been set aside by the Tribunal the finding becomes conclusive and the prosecution would not be sustainable and is liable to be quashed and set aside. Looking to the aforesaid rulings cited and legal position, I do not see any merit in the revisions. All revision applications are therefore dismissed.