REGISTAN PRIVATE LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS writ petition has been filed with the prayer to quash the order dated November 3, 1987, passed under Section 279(1) of the Income-tax Act, 1961 (hereinafter called "the Act"), and also to set aside the criminal complaint and the proceedings pending in the court of the Special Judicial Magistrate (Economic Offences), Jaipur, in Criminal Case No. 282 of 1987.

(2.) IN the order dated November 3, 1987, the Commissioner of INcome-tax found that the assessee wilfully attempted to evade tax, penalty and interest on Rs. 6,32,446 which it claimed as alleged bad debts and alleged payment of commission, etc. It was held that the assessee had committed an offence punishable under Section 276C(1) of the Act. The entries of bad debts of Rs. 1,63,153 were made on the last date of the relevant assessment year 1981-82. A sum of Rs. 4,74,062 was claimed as export promotion expenses of which the details were not furnished and subsequently it was informed that it was commission paid to a foreign agent and the entry was also passed on the last date of the previous year through a journal. The account of the commission agent was not credited and the additions were deleted by the Commissioner of INcome-tax (Appeals). The matter was challenged before the INcome-tax Appellate Tribunal where the additions of Rs. 46,145, Rs. 35,418 and Rs. 53,549 were upheld and the order of the Commissioner of INcome-tax (Appeals) was reversed. With regard to the commission of Rs. 4,69,259 for Paul Comar, the order passed by the INspecting Assistant Commissioner (Assessment) was restored and that of the Commissioner of INcome-tax (Appeals) was reversed. A miscellaneous application was made against the order dated May 28, 1987, passed by the Tribunal and the matter was restored to the file of the INspecting Assistant Commissioner for re-examination of allowing the bad debts in the light of the evidence sought to be placed of the persons being income-tax assessees, assessments being made on them, demands raised but not being capable of enforcement. The re-examination is limited to this extent only and the re-examination shall not apply to advance provided to Lloyd Sales Corporation of an amount of Rs. 3,500. IN the light of the order passed on the miscellaneous application, learned counsel for the petitioner has submitted that the prosecution must be quashed and for that purpose reliance has been placed on the case of Uttam Chand v. ITO [1982] 133 ITR 909 (SC), wherein on the basis of the decision of the INcome-tax Appellate Tribunal that the firm was a genuine one, the prosecution for filing a false return was quashed. Reliance has also been placed on the decision in the case of Kamaljeet Singh v. State of Rajasthan (S.B. Criminal Miscellaneous Application No. 28 of 1988), wherein the petitioner was directed to move an application before the trial court along with a certified copy of the order relied upon with the direction that the trial court would pass an appropriate orders for dropping the proceedings after taking into consideration the facts of the case. It was also observed that the court hopefully expected that, in the changed circumstances, the Department would withdraw the prosecution to show its bona fides. IN the present case, a copy of the order passed by the INspecting Assistant Commissioner (Assessment) with regard to bad debts has not been placed and, therefore, what would be the effect of the order of the Tribunal cannot be considered. If according to the petitioner, the Departmental authorities have given any finding in favour of the petitioner from which it could be said that no offence has been committed by the company, the petitioner is free to produce such a document before the trial court, but looking to the facts and circumstances of the case, more particularly that the order of the INspecting Assistant Commissioner (Assessment) after remand has not been produced, it will not be proper to interfere in the extraordinary writ jurisdiction of this court under Article 226 of the Constitution of INdia.