SHARMA, J. - (1.) ALL the above numberred revision petitions involve a common question of law and therefore, it will be in the interest of justice to deal with them by a common order. It is also necessary to deal with them under a common order because the complaint out of which the above numberred revision petitions arise, were filed after proceedings under S. 132 (5) of the Income Tax Act, 1961 hereinafter referred to as (The Act) will finalised and they arose out of a raid organised on 20th May, 1983, by the Income-tax Officer, Central Circle-1, Jaipur.
(2.) THE common question of law which is involved in all the cases is as to whether for filing complaint under Section 276 (c) of the Act it is necessary that there should be a regular assessment under the Act, against the assessment? On May 20, 1982, under the provisions of Section 132 (1) and (1a) of the Act, a search was conducted in the business premises and residential house of the accused situated in Dhamani Market and also at Sodala Farm, Jaipur, after obtaining a search warrant. During that search it is alleged that cash, precious and semi-precious stones and jeweilary as well as certain documents were found. The I. T. O. after affording reasonable opportunity to the petitioners of being heard and after making an enquiry under the provisions of the Act, with the approval of the Inspecting Assistant Commissioner, made an order under subsection (5) of S. 132 of the Act. for the various assessment years in respect of the petitioners. In the said order the amount of tax on the income estimated to be undisclosed income was also calculated. Thereafter complaints were filed against the accused petitioners under Section 276-C of the Act, for the assessment years 1980-81, 1981-82, 1982-83, 1983-84 and 1984-85. The complaints filed at the instance of Commissioner, Income-tax, served under S. 279 of the Act. Application were filed in all the cases on behalf of the accused petitioners that the complaint was premature and there were no reasonable ground for prosecuting the petitioners The learned Chief Judicial Magistrate (Economic Officers), Jaipur, dismissed the applications. The main contentions of the learned counsel for the petitioners is that the prosecution has been launched on uncertain facto. He contends that when the complaints were filed, the regular assessment orders had not been made in any of the cases and it cannot be said as to how much tax is imposable against the accused petitioners. He has further contended that the order under S. 132 (5) of the Act, was not made under the provisions of the Act with the approval of the Inspecting Assistant Commissioner, as required under sub-section (5) of Section 132 of the Act, as it is not so averred in the complaints. He contends that unless a regular assessment order is made it cannot be said definitely that the accused petitioners how wilfully evaded many manner payment of any tax penalty/interest chargeable under the Act, and he cannot be prosecuted under Sec. 276-C of the Act. His contention is also that even if it be assumed that they can be prosecuted they should not be so prosecuted and the Asstt. Income-tax Commissioner should not rush for prosecution of the accused unless there is a regular assessment order from which it can be said that the accused petitioners willfully attempted in any manner whatsoever to evade any tax/penalty or interest chargeable or imposable under the Act. His further contention is that on the account of tax sought to be evaded two different kinds of imprisonments are provided under clauses (i) and (ii) of sub-section (1) of S. 276-C of the Act, and therefore, it will not in the interest of justice to launch the prosecution unless the liability is established in a regular assessment by the assessing authority. In support of his contention Mr. Khandelwal, learned counsel for the petitioner placed reliance on the case of Uttam Chand Vs. The I. T. O. , Central Circle, Amritsar (i) in that case it was held that: "in view of the finding recorded by the Income-tax appellate Tribunal that it was clear on the appraisal of the entire material on the record that Smt. Jank Rani was a partner of the assessee-firm and that the firm was a genuine firm, we do not see how the assessee can be prosecuted for filling false returns". In the aforesaid case when the appeal was pending before the appellate tribuna'l the I. T. O. initiated the prosecution of the partner of the firm under S. 277 of the Income-tax Act, for filling false returns. It was not held in the aforesaid case of the Uttam Chand Vs. The S. T. O. (Supra) that during the pendency of the appeal the I. T. O has no jurisdiction to initiate the prosecution. This case of Uttam Chand Vs. The I. T. O. (Supra) came-up for consideration before their Lordships of the Supreme Court in P. Jayappan Vs. S. K. Perumal First Income Tax Officer Ttlcoria (2) it was observed that: "it is true that as observed by this court in Uttam Chand Vs. The I. T. O. Central Circle Amritsar (1) the prosecution once initiated maybe quashed in the light of a finding favourable to the assessee recorded by an authority under the Act, subsequently in respect of the relevant assessment proceedings but what decision is no authority for the prosecution that no proceedings can be initiated at all under S. 276-C and S. 277 as long as some proceeding under the Act, in which there is a chance of success of the assessee is pending. "
(3.) THEIR Lordships further observed as under:- "an appeal or reference under the Act cannot come in the way of the institution of criminal proceedings under S. 276c of the Act. In the criminal case all the ingredients of the offence in question have to be established in order to secure the conviction of the accused. The Criminal court no doubt has to give due regard to the result of any proceedings under the Act having a bearing on the question in issue and in an appropriate case it may drop the proceedings in the light of an order passed under the Act. It does not, however mean that the result of a proceedings under the Act would be binding on the criminal court. A criminal court has to judge the case independently on the evidence placed before it otherwise there is a danger of a contention being advanced that whenever assessee or any other person liable under the Act has failed to convince the authorities in the proceedings under the Act that he has not deliberately made any false statement or that he has not fabricated any material evidence conviction of such person should invariably follow in the criminal court. " It will therefore, be clear that in the case of P. Jayappan vs. S. K. Peru-mal (Supra) the Hon'ble Supreme Court has categorically held that mere pendency of proceedings of assessment, re-assessment under the Act against an assessee is not a bar of initiation of criminal prosecution for the offence punishable under S. 276c or S. 277 of the Act. In any criminal case before the prosecution can succeed it has to establish all the ingredients of the offence. No doubt, in case any assessment or re-assessment order is passed in favour of the assessee during the criminal proceedings the criminal court has to take note of it and may drop the proceedings. In the case of PWB Finance and Industries Ltd vs. Miss Gita Kriplani, Income-tax Officer Company Circle X, New-Delhi (2) on which reliance has been placed by Mr. Khandelwal, learned counsel for the petitioners it has been observed as under: "in case of offence, under the tax-laws, it would be improper for the Department to rush with the prosecution without a proper determination by a competent authority under the Act. of liability, which is sought to be made the basis of the prosecution, even, though such prosecution may not be incompetent. " It appears from to perusal of the above judgment that it has been held that the prosecution may not be incompetent in the absence of determination of tax liability. ;