D.K. Sinha, J. - (1.) THE petitioners have preferred this petition under Section 482 of the Code of Criminal Procedure for quashing entire criminal proceedings in Complaint Case No. 176 of 1992, corresponding to Trial No. 2729 of 1992 including the order impugned dated 24.3.1992, passed by Special Court for Economic Offences, Dhanbad whereby and whereunder cognizance of the offence was taken under Sections 276(c) and 277 of the Income Tax Act, 1961 against the petitioners.
(2.) THE informant opposite party No. 4, Income Tax Officer, Ward -II, Hazaribagh filed a complaint case being No. 176 of 1992 before the special Court stating therein that the petitioner No. 1 was the registered firm M/s. Novelty Dresses and the other petitioners were the partners of the said firm having equal share in profit and loss account, who derived income from business in ready made dresses and hosiery. The petitioners had filed return of income on 27.8.1990 showing total income of Rs. 48,240/ - for the assessment year 1990 -91. The assessment was completed on a total income of Rs. 1,38,950/ -. The stock of the business premises of the petitioners was verified by the officials of "income Tax Department which was valued at Rs. 8,95, 934/ -. But according to Books of account the stock position on that was at Rs. 3, 82, 483/ -. No explanation was given by the petitioners about the difference of Rs. 5,13,496/ -. However, after considering the explanation, the Assessing Officer found that a sum of Rs. 88,500/ - still remained unexplained and, therefore the Assessing Officer added the same to the Income of petitioners. In that manner it was alleged that the accused petitioners had willfully attempted to evade tax consciously and that they concealed the true particulars of income and, therefore, the petitioner had committed an offence as alleged punishable under Sections 276(c) and 277 of the Income Tax Act, 1961. The sanction of the Commissioner of Income Tax, Ranchi was obtained. Notices were issued to the opposite parties 2 to 4 and the office reported the same as valid service,
(3.) LEARNED Counsel for the petitioners submitted that an appeal was preferred before the Commissioner of Income Tax (Ranchi), vide I.T.A. No. 101/RAN of 1991 -92 against the aforesaid order dated 27.3.1991 whereby a sum of Rs. 88,500/ - was added in the return in which total income was shown at Rs. 48,240/ -. It was finally heard and order under Section 250 of the said Act was passed on 20.7.1992 allowing the said appeal in part by giving a relief of Rs. 48,500/ - and Rs. 1188/ - as contained in Annexure -5. Against such partial relief the petitioners preferred 2nd Appeal before the Income Tax Appellate Tribunal, Patna, vide I.T.A. No. 938/Pat/1992 and after hearing the parties Income Tax Appellate Tribunal, Patna, vide order dated 20.7.1995 Allowed the appeal in full and dismissed the appeal preferred by the Income Tax Department as contained in Annexure -6, The Tribunal observed and held that "adequate materials have not been brought on record to show that the actual stock in assessee's possession exceeded the stock as per books. The addition of Rs. 40,000/ - sustained by the CIT (A) is, therefore, deleted. In the result, the assessee's appeal is allowed and the Departmental appeal is dismissed.";