KAMRA TRADING CO Vs. INCOME-TAX OFFICER

JUDGEMENT

(1.) THIS is a revision petition filed by Kamra Trading Company (hereinatfer described as "the petitioner") directed against the order dated November 22, 1994, passed by the Chief Judicial Magistrate, Ferozepur. By virtue of the impugned order, the learned trial court framed charges against the petitioner with respect to offences punishable under Sections 276c and 277 read with Section 278b of the Income-tax Act, 1961.

(2.) PETITIONER No. 1 is a registered firm and petitioners Nos. 2 and 3 are its partners. The petitioner-firm filed its return of income declaring an income of Rs. 1,28,05,0 in August, 1986. During the course of assessment proceedings, the Income-tax Officer made an addition of Rs. 1,75,000, vide order dated December 30, 1987. Penalty proceedings were also started under Section 271 (1) (c) of the Income-tax Act. As against the said order, the petitioner preferred an appeal to the Commissioner of Income-tax (Appeals), Chandigarh, which was dismissed on March 7, 1988. After dismissal of the appeal, a criminal complaint was filed against the petitioners under Sections 276c, 277 read with Section 278b of the Income-tax Act, before the Chief Judicial Magistrate, Ferozepur. The petitioners challenged the assessment made by the Income-tax Officer by filing ah appeal before the Income-tax Appellate Tribunal. The second appeal of the petitioners was accepted and the matter was remanded to the Income-tax Officer.

(3.) RELIANCE strongly is being placed by the petitioners on a decision from the Kerala High Court in the case of Dr. B. Seerapani v. ITO [1993] 203 ITR 288. In the cited case, the question under consideration was identical and the case was remitted by the Income-tax Appellate Tribunal. The Kerala High Court felt that the very basis of prosecution having been taken away, the complaints are liable to be quashed. The relevant extract of the order passed by the Kerala High Court reads as under (at page 289): " The petitioner contends that, in view of the setting aside of the assessment by the Tribunal, the very basis of the prosecution having been taken away annexure I complaint in the respective criminal miscellaneous cases are liable to be quashed. Learned counsel for the petitioner relied on the decision of this court in Criminal Miscellaneous No. 1047 of 1991 and Criminal Miscellaneous No. 1091 of 1992 (Madras Spinners Ltd. v. Dy. CIT [1993] 203 ITR 282 (Ker)), in support of the said argument. In both the cases, in similar circumstances, upon the setting aside of the order of the appellate authority by the Tribunal, the complaints filed against the assessee on the basis of the assessment were quashed without prejudice to the right of the Revenue to file fresh complaints. But learned counsel for the respondent contended, in view of the Tribunal's order that it may not be necessary to quash the complaints, instead a direction need be issued to keep the complaint in abeyance till the reassessment is over and to revive the same if the result of the reassessment is in favour of the Revenue. The two orders of this court favoured the quashing of the complaint without prejudice to the Revenue to file a fresh complaint, if so advised, in the light of the reassessment proceedings against the petitioners. "