Ajit Singh Bains, J. - (1.) THESE seven petitions (Criminal Revision Nos. 15 -M to 21 -M of 1976) filed under art. 227 of the Constitution of India read with s. 482 of the Cr. PC, shall be disposed of by this order as the same point is involved in all the petitions. The facts giving rise to criminal revision No. 15 -M of 1976 are as under : There was a firm known as M/s. Handu and Chopra, Amritsar, consisting of four partners, viz., Uttam chand Chopra, Sunder Singh, Sunder Dass and Janak Rani, before 31st March, 1954. In 1959, this firm consisted of seven partners, viz., Uttam Chand Chopra, Bihari Lal Chopra, Sudarshan Lal Chopra, Hira Lal Chopra, Vijay Kumar Chopra, Ashok Kumar Chopra and Janak Rani. The firm was granted registration by the ITO for the assessment year 1960 -61 and the registration continued to be granted for the assessment years 1961 -62 to 1966 -67. Therefore, a new partnership deed was executed on 18th February, 1967, when one more partner, namely, Devinder Kumar Chopra, joined the firm with effect from 1st April, 1966. On the basis of this deed the firm was granted registration by the ITO for the assessment year 1967 -68 and the registration continued to be granted for the assessment years 1968 -69 and 1969 -70. On the death of Bihari Lal Chopra, one of the partners, the firm was dissolved and Janak Rani was dropped out of the partnership and a new deed was executed on 31st October, 1968, between the remaining six partners. The ITO granted registration to this firm also for the assessment year 1969 -70. Later on, Janaki Rani, one of the alleged partners, asserted before the ITO that the assessee -firm was not a genuine firm and that she was not its partner. She also denied her signatures on the partnership deed dated 1st May, 1959, and 18th February, 1967. The ITO, vide his order dated 8th February, 1972, rejected the submissions of the firm and held that the firm was not a genuine one. He, therefore, cancelled the registration. Dissatisfied by the order of the ITO, the assessee -firm appealed to the AAC, who, vide his order dated 29th December, 1972, rejected the appeals for all the seven assessment years 1963 -64 to 1969 -70. Thereupon the assessee -firm preferred a second appeal before the Income Tax Appellate Tribunal, which vide its order dated 30th November, 1974, allowed all the seven appeals and set aside the orders of the ITO and the AAC. In the meanwhile, the revenue filed a complaint against the petitioners under s. 277 of the I. T. Act, 1961 (hereinafter referred to as "the Act") as under ss. 193,196,467 and 471 read with ss. 109, 114, 34 and 37 of the IPC,pertaining to the assessment year 1963 -64, before the Additional Chief Magistrate, Amritsar, on 29th March, 1973. The petitioners had raised an objection before the learned Magistrate, but he did not agree with the contentions of the petitioners and rejected their objection, vide his order dated 2nd February, 1976. It is against this order that the petitioners have come up under s. 482, Cr. PC, for quashing the proceedings on the complaint.
(2.) IT is contended on the behalf of the petitioners that the proceedings pending before the Magistrate amount to an abuse in view of the findings of the Income Tax Appellate Tribunal and hence the same may not be allowed to continue. I do not find any merit in this contention. The proceedings before the Magistrate are entirely independent to the findings of the Income Tax Appellate Tribunal. The findings of the Income Tax Appellate Tribunal are not binding on the criminal courts. The criminal court is to independently go into the matter and if on evidence adduced by the revenue it comes to a conclusion that any offence is made out against the petitioners, then it will convict them and if it comes to a conclusion that no offence is made out, then it will acquit them. So far the petitioners have not even been charged. As soon as the complaint was filed the petitioners moved an application before the Magistrate raising the objection that the proceedings in the complaint cannot continue in view of the findings of the Income Tax Appellate Tribunal. After their objection was rejected by the Magistrate, they came to this court by way of this application under s. 482, Cr, PC, and the proceedings before the Magistrate, were stayed by this court. No evidence is led before the Magistrate.
(3.) THE view I am taking finds support from an authority in Dr. D. N. Munshi v. N. B. Singh : [1978] 112 ITR 173;, [1976] Tax LR 677, wherein, in a similar matter, Hari Swarup J. of the Allahabad High Court observed as under : Sub -section (1A) of section 279 contains a bar to the institution or continuance of the prosecution against an assessee under section 277. The import of this provision is that in case the Commissioner himself waives the penalty under sub -section (4A) of section 271, the prosecution should not be initiated or continued. The Income Tax Appellate Tribunal when it allows an assessees appeal really does not act on the basis of the law contemplated under sub -section (4A) of section 271, but does so on the basis of the existence of the conditions on which the penalty may be imposable. If it finds that the penalty is not legally imposed, it sets aside the order. The order of the Tribunal is really the order of the assessing authority not imposing a penalty. That order is not contemplated by sub -section (1A) of section 279 as the order mentioned in that sub -section is the order which is passed under sub -section (4A) of section 271 and not the order not imposing the penalty. It contemplates waiver and not non -imposition of penalty. The order of the Tribunal setting aside the penalty may be utilised as a piece of evidence to show that there was no offence committed by the accused but that by itself is not sufficient to direct the dismissal of the complaint or acquittal or discharge of the accused under the Criminal Procedure Code." In Dr. D. N. Munshis case, the penalty order passed by the IAC was quashed by the Income Tax Appellate Tribunal and the revenue filed a complaint against the assessee under various provisions of the IPC before the Magistrate. The assessee then approached the High Court under section 561A of the old Cr. PC and it was held that the proceedings before the criminal courts are entirely independent of the findings of the Tribunal and these findings are not binding on the criminal courts. The basic law is laid down in R. P. Kapur v. : 1960CriLJ1239 , wherein their Lordships of the Supreme Court have held as under : The inherent power of the High Court under s. 561A. Criminal P. C., cannot be exercised in regard to the matters specifically covered by the other provisions of the Code. The inherent jurisdiction of the High Court can be exercised to quash proceedings in a proper case either to prevent the abuse of the process of any court or otherwise to secure the ends of justice. Ordinarily, criminal proceedings instituted against an accused person must be tried under the provisions of the Code, and the High Court would be reluctant to interfere with the said proceedings at an interlocutory stage. It is not possible, desirable or expedient to lay down any inflexible rule which would govern the exercise to this inherent jurisdiction. ;