ANAND KUMAR AND ANOTHER V. UNION OF INDIA

A482/9243/2020

AI Insights

The case involves Anand Kumar and his late father's partnership firm, M/s Sundar Lal Anand Kumar, which faced criminal proceedings under Sections 276-C, 277, and 278 of the Income Tax Act, 1961, initiated by the Union of India. The proceedings were based on allegations of maintaining duplicate sets of books and unexplained income. The firm contested the income tax assessments and penalties through various appellate stages, including the Income Tax Appellate Tribunal, which ruled in their favor but directed a fresh assessment. The criminal proceedings were transferred through various jurisdictions and ultimately reached the Special Chief Judicial Magistrate, Meerut. The applicants sought to quash these proceedings and stay the non-bailable warrant issued against them, arguing that no valid penalty under Section 271(1)(c) for the relevant assessment year existed against them. The court, after considering the submissions, directed the applicants to file a detailed application addressing the specific grounds regarding the absence of penalties, which the Magistrate is to decide expeditiously.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 678326 (HC-UTTAR_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 06-03-2020
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Criminal Procedure Code
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: SSC
• Assessee Lawyers: UJJAWAL SATSANGI; SHAGUN SARAN
• Keywords: Criminal Proceedings; Penalty; Quash Proceedings; Stay Operation; Unexplained income; Duplicate set of books
• Section: 271(1)(c); 132; 278; 276 C; 277

Judgement Text

"Court No. - 76 Case :- APPLICATION U/S 482 No. - 9243 of 2020 Applicant :- Anand Kumar And Another Opposite Party :- Union of India Counsel for Applicant :- Ujjawal Satsangi,Shagun K. Saran Counsel for Opposite Party :- S.S.C. Hon'ble Mrs. Manju Rani Chauhan,J. Heard Mr. Ujjawal Satsangi, learned counsel for the applicants and Mr. Gaurav Mahajan, Advocate who has put in appearance on behalf of the opposite party by filing his vakalatnama in Court today, which is taken on record. The present application under Section 482 Cr.P.C. has been filed by the applicants with a prayer to quash the entire proceedings of Case No. 1917/1997 (Union of India vs. M/s Sundarlal Anand Kumar and Another) under Sections 276-C, 277 and 278 of Income Tax Act, pending before the Special Chief Judicial Magistrate, Meerut as well as stay the operation of N.B.W. passed by the court below in the aforesaid case. It has been submitted by learned counsel for the applicants that the applicant no.1 and his father, namely, late Sundar Lal, jointly constituted a partnership for conducting business in the name of applicant no.2, M/s Sundar Lal Anand Kumar (hereinafter referred as applicants' firm). The applicants' firm is in the business of wholesale of households goods and is a dealer of products of Hindustan Unilevers, Parley Biscuits, Nippo Cells etc. On 25.11.1983, the Income Tax Department conducted a search under Section 132 of Income Tax Act, 1961 and alleged to find a duplicate set of books of account. Thereafter, the applicants' firm filed its annual return for the assessment year 1983-84 and showed income of Rs. 18,160/- on 30th July, 1983 and the same was duly verified by the opposite party no.2. Thereafter, the Assessment Officer prepared assessment of the applicants' firm for the year 1983-84, wherein it was observed by the Assessment Officer that Late Sundar Lal showed a deposit of Rs. 17,640/- only, whereas, the credits appearing in the parallel ledger was Rs. 792/-. Therefore, the assessment officer observed that Rs. 15,320/- should be considered as unexplained income. It has further been submitted that the aforesaid observations of the Assessment Officer was challenged by the applicants' firm before the Commissioner of Income Tax (Appeals) and not receiving a favourable order, the applicants approached the Income Tax Appellate Tribunal vide ITA No. 2632/D/91. In the meantime, the opposite party no.2 initiated the criminal proceedings against the applicants regarding the same allegations and instituted Complaint Case No. 2622 of 1986 in the Court of Special Chief Judicial Magistrate, Allahabad under Sections 276-C, 277 and 278 of Income Tax Act, thereafter the same was transferred to the Court of Special Chief Judicial Magistrate, Allahabad to Special Chief Judicial Magistrate, Kanpur Nagar and ultimately transferred to the Court of the Special Chief Judicial Magistrate, Meerut and the same was numbered as Case No. 1917/1997 (Union of India vs. M/s Sundarlal Anand Kumar and Another) under Sections 276-C, 277 and 278 of Income Tax Act. The Special Chief Judicial Magistrate, Meerut proceeded against the applicants, under Sections 276C, 277, 278 of Income Tax Act. Thereafter, against the aforesaid criminal proceedings, the applicants approached before this Court by means of Application U/s 482 No. 14756 of 1991 and the co-ordinate Bench of this Court, vide order dated 16.04.1999, following order was passed:- \"...........Considering the facts and circumstances of the case, this petition is disposed of finally with the observation that the petitioner may move application / objection before the court, concerned raising his grievances and the contentions and if such an application is filed, the learned Magistrate may dispose of the same expeditiously by a reasoned order in accordance with law. Accordingly, it is directed that if the application/ objection is filed by the petitioner, within 8 weeks from today, the same shall be considered and disposed of expeditiously by a reasoned order as indicated above. However, till the disposal of such application / objection the petitioner shall not be required to appear in person and shall be permitted to appear through counsel and all the proceedings except which are necessary for the disposal of that application / objection, shall remain stayed. It will also be open for the learned Magistrate to see that in case any proceedings are pending challenging the orders passed by the Income-Tax Authority questions, under any statutory provisions, the trial may not be held till the conclusion of those proceedings as directed by the Hon'ble Supreme Court in the Case of P. Jayapan (supra). It is further provided that in case proceedings have been concluded or the cases have been decided under voluntary Disclosure of Income Scheme (VDIS) by the Income-Tax Authority, the complaint shall be decided in terms of the same. A certified copy of this order shall be given to the learned counsel for the parties on payment of usual charges.\" In the meantime, challenge to the order passed by the Commissioner of Income Tax (Appeals) before the Income Tax Tribunal by the applicants was successful and the same was passed in favour of the applicants vide order dated 22nd October, 199. However, the opposite party was directed to make fresh assessment. Pursuant to the aforesaid order, an application was filed by the applicants before the concerned court below but details regarding whether any penalty under Section 271(1)(c) relevant to assessment year 1983-84 in the case of Anand Kumar exists as validly levied was not mentioned. The other information as to whether the Special C.J.M.(Economic Offences), Meerut was not informed that no valid penalty under Section 271(1)(c) in the case of Anand Kumar for assessment year 1983-84 exists as on date has also not been mentioned in the application. It has further been submitted that regarding penalty as per the records, no such penalty existed against the applicants' firm and there were no records available in the office of the Pr. Commissioner of Income Tax, Meerut to show that any such penalty exists against the applicants' firm. Learned counsel for the opposite party no.2 opposed the contentions made by the learned counsel for the applicants and submitted that the report regarding penalty for the assessment year 1983-84, which is annexed at page 103 is with respect to the Proprietor, Anand Kumar Jain and not with respect to the applicants' firm. It has further been submitted that in pursuance of the order dated 16.04.1999, a detailed application was moved by the applicants but various ground regarding whether any penalty existed against the applicants' firm have not been dealt with. Having regard to the facts and circumstances of the case and having considered the submissions made by the learned counsel for the parties, it is directed that the applicant may file a proper application before the concerned Magistrate, who will after considering all the facts and circumstances of the case, pass a reasoned order, expeditiously, preferably within a period of two months from today, if there is no other legal impediment. For a period of two months from today or till the disposal of the applicants' application, whichever is earlier, no coercive action shall be taken against the applicants. With the above observations, the application stands disposed of. (Manju Rani Chauhan, J.) Order Date :- 6.3.2020 Sushil/- "