Revn/168/1996 Of 2Nd Income Tax Officer v. Ajayprakash Murlidhar Kanoria

IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT NAGPUR, NAGPUR. ... CRIMINAL REVISION APPLICATION NO.132/1998WITHCRIMINAL REVISION APPLICATION NO. 142/ 1996WITHCRIMINAL REVISION APPLCIATION NO.143/1996WITHCRIMINAL REVISION APPLICATION NO: 144/1996WITHCRIMINAL REVISION APPLICATION NO. 168/1996WITHCRIMINAL REVISION APPLICATION NO. 169/1996 1)CRI.REVN.APPLICATION NO. 132/1998: Income Tax OfficerShri Ramesh Bhoskarwar“Aayakar Bhawan”Telangkhedi Road, Nagpur. ..APPLICANT v e r s u s 1)Nandlal & co. A partnership firm through ItsPartner Shri Kishore s/o Jivraj PatelItsPartner Shri Kishore s/o Jivraj Patel 2)Kishore s/o Jivraj Patel Aged about 32 years 3)Chimanlal s/o Jivraj PatelAged about 28 yearsAged about 28 years 4)Smt. Dekshaben w/o Mohanlal Patel,Aged about 27 yearsAged about 27 years 5)Lakhanbhai Bhimaji PatelAged about 31 yearsAged about 31 years All C/o M/s Nandlal & co. M/s Jagdish Trading CompanyOld Reshma OliNagpur 440 002...RESPONDENT............................................................................................................................ Mr Anand Parchure, Adv.for applicantMr. S N Chinchbawkar, Adv.h/for Mr C.J.Thakar Adv.for respondent…....................................................................................................................4)CRI.REVN.APPLICATION NO. 144/1996:Income Tax Officeron Ward No.1(2) “Aayakar Bhawan”Telangkhedi Road, Nagpur...APPLICANTv e r s u sVishram s/o Lekhraj MagnaniAged about 40 years ProprietorM/s Jagdish Trading CompanyOld Reshma OliNagpur 440 002...RESPONDENT............................................................................................................................Mr Anand Parchure, Adv.for applicantMr. S N Chinchbawkar, Adv.h/for Mr C.J.Thakar Adv.for respondent…....................................................................................................................5)CRI.REVN.APPLICATION NO. 168/1996:2nd Income Tax Officer (Assessment)“Aayakar Bhawan”Civil Lines , Nagpur...APPLICANTv e r s u sAjayprakash s/o Murlidhar KanoriaAged about 40 years, Resident ofKanoria Bhawan, Ghat Road, Nagpur. ..RESPONDENT ............................................................................................................................Mr Anand Parchure, Adv.for applicantMr. V V Bhangde, Adv.for respondent…....................................................................................................................6)CRIMINAL REVISION APPLICATION NO. 169/1996The Income Tax Officer Income Tax officers' CircleVoltas BuildingSadar, Nagpur. ...APPLICANTv e r s u s1)M/s Veer RadiosA partnership firm,doing business in Radios,Amplifiers and other electrical goods, having the place of business at SitabuldiMain Road, Nagpur.2)Birsen s/o Nanakchand AhujaAged about 64 years, occu: BusinessR/o 19, Byramji Town, nagpur3)Sanjiv s/o Birsen AhujaAged about 38 years, occu: businessR/o 19, Byramji Town, Nagpur. ..RESPONDENTS............................................................................................................................Mr Anand Parchure, Adv.for applicantMr. B.G. Kulkarni, Adv.for respondents….................................................................................................................... CORAM: A.P.BHANGALE , J.DATED: 5th December, 2011 ORAL JUDGMENT: 1.As common question of law arises for consideration in the above-referred matters, they are being disposed by this common judgment and order. (The facts are taken from Cri .Revision Application No. 132/1998). 2.By this revision application, the revision-applicant prayed for to quash and set aside the judgment and order dated 27.1.1998 passed by learned 2nd Additional Sessions Judge, Nagpur in Criminal Misc. Cri. Revision Application No. 823/ 1997. CORAM: A.P.BHANGALE , J.DATED: 5th December, 2011 ORAL JUDGMENT: 1.As common question of law arises for consideration in the above-referred matters, they are being disposed by this common judgment and order. (The facts are taken from Cri .Revision Application No. 132/1998). 2.By this revision application, the revision-applicant prayed for to quash and set aside the judgment and order dated 27.1.1998 passed by learned 2nd Additional Sessions Judge, Nagpur in Criminal Misc. Cri. Revision Application No. 823/ 1997. 3.It is the case of the revision-applicant that as an Income Tax officer a criminal Complaint No. 138/1992 was filed by the applicant alleging offences punishable under sections 276C and 227 of the Income Tax Act, 1961 in the Court of Chief Judicial Magistrate, Nagpur. In that proceeding, the non-applicant had moved an application for discharge on the ground that Income Tax Appellate Tribunal ( in short “ITAT” ) had set aside the penalty and, therefore, prosecution could not be sustainable. The trial Court had rejected the application filed by the non-applicant, therefore, the Revision Application was filed before the learned Sessions Judge,Nagpur. By judgment and order dated 27.1.1998 the learned 2nd Additional Sessions Judge, Nagpur allowed the Revision of the non-applicant and discharged them. 4.At the hearing of this application, it is submitted as regards the allegation of concealment of income, that penalty proceedings initiated under section 271 (1)(c) of the Income Tax Act was started by the Department which was quashed by the ITAT. In that matter, the Department had filed reference against the order of the ITIAT which was admitted on the basis of some allegations of alleged concealment of income. My attention has been invited to rulings of the Apex Court in the case of G D Didwania and another vs. Income Taxofficer and another reported in1995 Suppl. ( 2) SCC page 724. The Apex Court considered the question as to whether the appellant in that case made a false statement regarding the income which according to the assessing authority had escaped the assessment. It was held that on this issue the finding of the Appellate Tribunal was conclusive and, therefore, the prosecution cannot be sustained. Accordingly, it was concluded that the criminal proceedings were liable to be quashed. It is, therefore, submitted that the question as to whether the prosecution can be sustained in view of the order passed by the Tribunal is answered by the Apex Court to the effect that once the finding of the Assessing Authority that assessee made a false statement is set aside by the ITAT, the criminal proceedings would not be sustainable because the finding of the ITAT is conclusive. Earlier also, in the ruling in K C Builders andanother vs. Assistant Commissioner of Income Tax reported in 289 ITR83 (SC), on the identical issue the Apex Court had observed that before penalty under section 271 (1)(iii) may be imposed it has to be proved that the assessee has consciously made the concealment or furnished inaccurate particulars of income. The ruling concluded that it is an established principle that the matter which has been adjudicated and settled by the Tribunal need not be dragged into criminal courts unless and until the act of the appellant could have been described as culpable. In another ruling in H.T. Power Structure Pvt.Ltd. vs. R.P.Sharma and another ( 2008) 299 ITR 363 (Guj) it appears concluded that when penalty has been set aside by the Income Tax Appellate Tribunal the finding becomes conclusive and the prosecution would not be sustainable and is liable to be quashed and set aside. 5.Looking to the aforesaid rulings cited and legal position, I do not see any merit in the Revisions. All Revision Applications are therefore dismissed. Sahare JUDGE