MADRAS SPINNERS LIMITED Vs. DEPUTY COMMISSIONER OF INCOME TAX ASSESSMENT
HIGH COURT OF KERALA
MADRAS SPINNERS LTD.
DEPUTY COMMISSIONER OF INCOME-TAX (ASSESSMENT)
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(1.)This petition under S.482 of the Code of Criminal Procedure is to quash Annexure-I complaint in C.C. No. 84/1990 on the file of the Chief Judicial Magistrate (Economic Offences), Ernakulam. First petitioner is an assessee under the Income Tax Act, 1961 (for short 'the Act'), second petitioner is the Managing Director, third petitioner is one of the Directors and 4th petitioner is the General Manager of the first petitioner company. For the assessment year 1986-87 the first petitioner company filed return after deducting certain claims under the Act. Two such claims were depreciation and investment allowance under S.32 and 32A of the Act in respect of two items of machineries. These two machineries were purchased on 5-3-1986 and 8-3-1986 respectively. If the said machineries were put to use during the accounting period, the two claims could be entertained. The assessing authority conducted enquiries and found that it was not used during the accounting year and hence the assessing authority completed the assessment rejecting the two claims. An appeal was preferred by the first petitioner company before the Commissioner of Income Tax; but he confirmed the order of assessment. The assessing authority had also initiated proceedings under S.271(1)(c) of the Act. In that after completing the necessary steps the authority passed an order levying penalty. The order of assessment as well as the order levying penalty were challenged by the company before the Income Tax Appellate Tribunal, Ernakulam. The Tribunal by Annexure-II order allowed the two claims and set aside the order appealed against. Annexure-I complaint is based on the assessment order as confirmed by the Commissioner of Income Tax. The department filed an application for reference under S.256(1) of the Act; that was also dismissed by the Tribunal by Annexure-III order.
(2.)According to the petitioners, since the very basis of the prosecution thus is no longer in existence, the prosecution is not sustainable; consequently the same is liable to be quashed under S.482 of the Cr. P.C.
(3.)It was contended by the learned counsel for the respondent, that the respondent has a right to file an application under S.256(2) of the Act for compelling the Tribunal to make the reference for which the period is six months and the same is yet to expire therefore the challenge is premature and that the grounds now raised are such that they could urge the same before the Criminal Court and hence they cannot, in the circumstance, invoke the jurisdiction of this court under S.482 of the Cr. P.C.
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