PATNA GUINEA HOUSE Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is an application under Section 482 of the Code of Criminal Procedure, 1973, for and on behalf of the four partners of a partnership business known as Patna Guinea House, challenging the order dated January 4, 1991, passed by Shri S.R. Hussain, Presiding Officer, Special Court, Economic Offences, Muzaffarpur, in Complaint Case No. 3 of 1991 (TR No. 2188 of 1991), whereby cognizance was taken of the alleged offences under Section 276C of the Income-tax Act (hereinafter referred to as "the Act."), and the petitioners were summoned to stand their trial.

(2.) ACCORDING to the petition of complaint lodged by one Lekha Shrivastava, Assistant Commissioner of Income-tax, Patna, the petitioners herein had, inter alia, disclosed a sum of Rs. 52,000 in their returns, but had refused to disclose the source of income. Therefore, penalty proceedings were initiated against them under Section 271(1)(c) of the Act and a penalty of Rs. 14,367 was imposed on them. The same was reduced to Rs. 2,701 by the appellate authority, and was affirmed by the Tribunal by its order dated December 20, 1989. On these allegations, the aforesaid petition of complaint dated January 7, 1991, was filed before the Special Court of Economic Offences, Muzaffarpur, which was registered as Complaint Case No. 3 of 1991, a copy of which is marked annexure 1 to this application.

(3.) LET it be recorded that the allegations in the present case do not constitute a case of income escaping assessment. Therefore, the case of the petitioners stand on a much better footing than the one covered by the aforesaid notification and the reported judgment. Counsel has rightly invited my attention to the judgment of the Supreme Court reported in Uttam Chand v. ITO [1982] 133 ITR 909, wherein it has been held that the find ing,s of the assessing authority which is the basis for the prosecution, having been set aside by the superior court at a later stage, results in setting aside the resultant prosecution. This was followed by the Supreme Court in a recent judgment reported in G. L Didwania v. ITO [1997] 224 ITR 687. I am also reminded of the judgment of the Supreme Court reported in Nawabkhan Abbaskhan v. State of Gujarat, AIR 1974 SC 1471, wherein it has been held that the basis for prosecution having been set aside at a later date by a superior court, results in setting aside of the same from the date of its nativity. Therefore, the resultant criminal proceedings based on the said order becomes unsustainable in law. When the substratum is gone, where is the question of the superstructure ?