R L CHADHA Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) The legal question of some consequence raised in this petition under section 482, Cr. P.C., relates to the interpretation and true scope of section 245-F of the Income-tax Act, 1961 (for short, the Act), The following undisputed facts give rise to it.

(2.) The petitioner, a private limited company, and its three directors are sought to be prosecuted in the Court of Chief Judicial Magistrate, Ludhiana, for offences under sections 276C and 217 of the act on a complaint (Annexure P-3) filed by the Income-tax Officer, Central Circle-IT, Ludhiana, on July 5, 1984. This complaint, as per the stand of the complainant (respondent) was filed at the instance, authorisation and under orders of the Commissioner of Income-tax (Central), Ludhiana, as envisaged by section 279 of the Act. The crux of the complaint is that for that assessment year 1980-81, a return was filed by the company bearing false verification and containing false statement of accounts as the stocks worth Rs. 2,87, 840/- were available with the assessee in excess of what it had disclosed to the department and the source of these stocks was also not disclosed. It was so done with a view to evade the payment of tax, penalty and the interest chargeable under the Act. As a result of this complaint, the petitioners were summoned by the trial Magistrate. They then moved an application under section 245(2), Cr. P.C., for their discharge on the plea that they had already moved an application under section 245C(1) of the Act for settlement before the Income tax Settlement Commission (hereinafter referred to as the Commission) and the latter had allowed the application, vide its order dated August 30, 1983, to be proceeded with as envisaged by section 245D(3) of the Act, and till the finalisation of these proceedings the complainant or the Income tax Commissioner had no jurisdiction to launch any criminal prosecution against them by way of complaint as had been done. The Court, however, dismissed their application vide its order dated April II, 1986 (Annexure P 5) primarily for the reason that criminal proceedings against the petitioners could not be allowed to stagnate till the conclusion of the proceedings before the Commission This was so said on the basis of certain judgments which have no relevance, even remotely, to the provisions of Chapter 19-A, including section 24SF of the Act The petitioners now impugn the complaint Annexure P 1 and the order of the trial Magistrate Annexure P 5 on the same very ground as was urged before that Court.

(3.) To appreciate the anatomy of the contention raised, the foundational facts need to be sifted without crippling them and are as follows: