BADRI PRASAD Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS is a petition under Section 482 of the Code of Criminal Procedure seeking quashment of Criminal Case No. 58 of 1987 instituted in the court of A. C. J. M. (Economic Offences), Indore, on a complaint lodged by the respondent under Sections 276C and 277 of the Income-tax Act (for short "the Act").

(2.) THE facts material for the purpose of this order are that the applicants at the material time were the partners of Badri Prasad Rameshwar Prasad carrying on business at Gol Bazar, Katni. THE firm was an assessee under the Act. THE relevant assessment year is 1974-75. THE assessee-firm filed a return showing income of Rs. 38,680. THE Income-tax Officer assessed the income at Rs. 39,830. Accordingly, a revised return of income was filed by the assessee-firm showing income at Rs. 39,830. THE firm was accordingly assessed vide order dated October 30, 1975. However, a survey was conducted on January 15, 1974, in the business premises of the assessee. On the basis of information collected in the survey, the Income-tax Officer came to the conclusion that the income of the assessee-firm for the relevant year comes to Rs. 65,974 being the unexplained money in terms of Section 69A. He, therefore, issued notice under Section 148 on March 23, 1979. In compliance with this notice, the assessee filed the return on April 27, 1979. THE Income-tax Officer assessed the firm at Rs. 3,38,604 i.e., for Rs. 4,98,774 over and above the amount of Rs. 39,830 assessed originally. On the assessee's appeal, the learned Commissioner of Income-tax (Appeals) reduced the addition by Rs. 2,37,436. Thus finally the addition made on account of income from undisclosed sources came to Rs. 2,61,338. During these assessment proceedings, penalty proceedings under Section 271(1)(c) were also initiated by the Income-tax Officer. THE matter was examined by the Inspecting Assistant Commissioner of Income-tax, Jabalpur, who, vide his report dated March 21, 1983, advised the Income-tax Officer to drop the penalty proceedings. THE learned Inspecting Assistant Commissioner, inter alia, observed :

(3.) I have heard Shri S.C. Bagdia, senior counsel, with Shri Pankaj Bagdia, for the applicants, and Shri P.K. Saxena, senior counsel, with Shri P.K. Jain for the respondent-Department.