- (1.) THIS writ application has been filed for quashing the entire criminal proceeding pending in the court of Special Judge, Economic Offences, Jamshedpur in connection with C/1 Case No. 147 of 1992 registered under Sections 276 (C) and 277 of the Income Tax Act, 1961.
(2.) IT appears that a complaint filed by Income Tax Department against the petitioners alleging therein that the petitioners filed income tax return for the Assessment Year 1986 -87 showing income of the firm as Rs. 2,78,600/ -. Assessing Authority, after scrutinizing the matter, has found that petitioners had not disclosed their income with regard to two additions i.e. unexplained expenditure Rs. 2,54,469/ - and commission on sales of Rs. 38,200/ -. Accordingly, Assessing Authority asked the petitioners to pay tax on the said amount. Against that assessment order, petitioners filed an appeal before the C.I.T. (Appeals), Jamshedpur. In the said appeal, the aforesaid assessment order set aside and the case was remitted back to the Assessing Authority. Thereafter, re -assessment made and the Assessing Authority found that petitioners have not given the account with respect to two additions i.e. Unexplained expenditure under Section 69 to the tune of Rs. 10,499/ - and commission on sales of Rs. 38,200/ -. Accordingly, petitioners paid tax on the said additional amount. Thereafter, the Assessing Authority initiated a penalty proceedings under Section 271 (1)(C) of the Income Tax Act with respect to aforesaid two additions and gave notice to the petitioners. After considering the show cause filed by the petitioners, the Assessing Authority levied penalty vide order dated 23.07.1990 of Rs. 30,000/ -. Against the said order of penalty, petitioners filed an appeal before the C.I.T. (Appeals), Jamshedpur. It appears that during pendency of aforesaid appeal before the C.I.T. (Appeals), Jamshedpur, the Assessing Authority filed the present complaint before the Special Judge, Economic Offences, alleging therein that petitioners concealed the aforesaid two additions with a view to evade payment of income tax. Accordingly, on the basis of the said complaint, cognizance taken. Learned counsel for the petitioners submits that during pendency of the complaint case in the court below, petitioners' filed appeal before C.I.T. (Appeal), Jamshedpur, which was dismissed vide order dated 31.03.1992 (Annexure -3). Against that order, petitioners filed appeal before the Income Tax Appellate Tribunal, Patna Bench, Patna vide I.T.A. No. 623 (Pat) of 1992. The said appeal was disposed of by order dated 06.12.1994, whereby the order passed by Assessing Authority under Section 271 (1) (C) of the I.T. Act and the appellate order passed by C.I.T. has been set aside holding that petitioners had not concealed any fact from the Assessing Authority. Sri Poddar further submits that since the Income Tax Tribunal has set aside the order of penalty passed by Assessing Authority as well as by the Appellate authority, the prosecution launched against the petitioners under Sections 276 (C) & 277 of the Income Tax Act is liable to be quashed automatically. In support of the said contention, he relied upon the Judgment of Hon'ble Supreme Court in the case of K.C. Builders and Another Vs. Assistant Commissioner of Income Tax reported in (2004) 2 SCC 731.
(3.) LEARNED counsel appearing for the Income Tax Department submits that the cognizance has already been taken against the petitioners and thereafter the court below has also rejected his discharge petition. Under the said circumstance, this writ application is not maintainable. However, after going through the order of Income Tax Appellate Tribunal, learned counsel for the Income Tax Department has not disputed the order of penalty has already been set aside.;