Crl Op/12095/2019 Of A.latha v. The Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HON'BLE DR. JUSTICE G.JAYACHANDRAN A.Latha The Deputy Commissioner of Income Tax,Central Circle-2,Income Tax Office,63, Race Course Road,Coimbatore 641 018. .. Respondent/Complainant PRAYER: Criminal Original Petition filed under Section 482 Cr.P.C,to call for the records in C.C.No.433 of 2018 before the learnedJudicial Magistrate No.III of Coimbatore and quash the same. This criminal original petition is filed to quash theprivate complaint lodged by the Deputy Commissioner of IncomeTax under Section 276C(2) read with 278E of the Income Tax Act,1961. 2. The complaint was filed on the premises that for theAssessment Year 2014-2015, the accused had failed to disclosethe income and the same came to the notice of the Departmentthrough search and seizure conducted on M/s.Green Home Landscape https://hcservices.ecourts.gov.in/hcservices/ Private Limited on 17.03.2015. Notice was caused under Section153C to the accused Latha and requested her to file returns forher income for the Assessment year 2014-2015 within 15 days.The accused filed her returns on 15.12.2016, declaring herincome of Rs.2,43,610/-. On completion of assessment by makingaddition on account of unexplained money to the tune ofRs.1,00,00,000/-, a demand of Rs.50,21,160/- was raised aspenalty and penalty proceedings were initiated causing noticeunder section 274 read with 271(1)(c) of the Income Tax Act. 3.Citing appeal pending before the Commissioner ofIncome Tax (Appeals), the accused sought for time and stay oncollection of demand. Since the accused failed to satisfy todeposit 15% of the demand as pre-condition, the request to staythe collection of demand was declined. Even after the lapse oftwo months from the date of receipt of the notice, the demandraised in the penalty notice dated 31.12.2016 was not paid.Meanwhile, the appeal preferred by the accused was considered bythe Appellate Authority and by order dated 20.11.2017 inI.T.A.No.479/16-17, the penalty and demand was enhanced toRs.1,83,50,000/- and the assessee was directed to be assessedunder Section 69A for the unexplained money. 4. In view of the order passed by the AppellateAuthority, demand of Rs.1,01,13,225/- was demanded to be payableand in addition, penalty was imposed. The total amount payableby the accused was determined as Rs.1,85,99,232/- and the demandnotice under Section 156 of the Income Tax Act was caused on theaccused. In response to the demand notice, the accused paidonly Rs.6,993/- against the demand of Rs.2,87,12,457/- whichincluding penalty for the Assessment Year 2014-2015. Inspite ofaffording several opportunity to pay the balance amount, theaccused has willfully evaded the payment of tax for theAssessment Year 2014-2015, which leads to the legal presumptionof her culpable mental state. Hence, after obtaining sanctionto prosecute, the impugned private complaint has been lodged. 5. A short point raised in the quash petition is that,pending prosecution initiated based on the order passed by theAppellate Authority, the accused/ petitioner herein preferred anappeal before the Tribunal and in ITA No.1223/Chny/2018, 3 and39 Chny/2018 for the Assessment Year 2014-15 and 2015-2016, theTribunal has set aside the order of the Appellate Authority.Therefore, contending that by virtue of the common order dated31.03.2022 passed by the Tribunal, the very foundation of theprosecution against the petitioner herein for the allegedwillful default to the demand and the penalty made falls toground and therefore, the prosecution has to be quashed. 5. A short point raised in the quash petition is that,pending prosecution initiated based on the order passed by theAppellate Authority, the accused/ petitioner herein preferred anappeal before the Tribunal and in ITA No.1223/Chny/2018, 3 and39 Chny/2018 for the Assessment Year 2014-15 and 2015-2016, theTribunal has set aside the order of the Appellate Authority.Therefore, contending that by virtue of the common order dated31.03.2022 passed by the Tribunal, the very foundation of theprosecution against the petitioner herein for the allegedwillful default to the demand and the penalty made falls toground and therefore, the prosecution has to be quashed. 6.To ascertain whether the order of the Tribunal dated31.03.2022 will tantamount to set aside the order of theAssessing Authority demand of Rs,50,21,160/- will also get setaside, the learned counsel for the Department answered innegative. So, it is very clear that in the order of theTribunal, the petitioner herein could not be liable to pay thedemand and the penalty made based on the order passed by theAppellate authority dated 20.11.2017 but status quo ante will berestored. In any event, in view of the subsequent development,the criminal prosecution laid based on the alleged failure tocomply the demand notice issued on 22.03.2018 will not survive.Hence, for that reason, the criminal original petition isallowed with liberty to the Department to proceed against theassessee, if there is any violation of failure on her part tocomply the demand which she is liable to pay for the AssessmentYear 2014-2015 and thereafter. This observation is subject tothe right reserved by the Department to prefer further appealagainst the order of the Tribunal dated 31.03.2022. Theconnected miscellaneous petition is closed. Sd/- //True Copy// Sub Assistant Registrar vri To 1. The Deputy Commissioner of Income Tax, Central Circle-2, Income Tax Office, 63, Race Course Road, Coimbatore 641 018. 2. The Public Prosecutor, High Court of Madras. +1cc to Mr.A.Saravanan, Advocate, S.R.No.35995+1cc to Mr.V.Vijayakumar, Advocate, S.R.No.36781 SRII(CO)PM/29/06/2022 Crl.O.P.No.12095 of 2019andCrl.M.P.No.6263 of 2019