null V. Income Tax Department

CRLMC/2869/2006

AI Insights

The case involves three applications filed under Section 482 of the Cr.P.C., which arose from a common order dated 25.03.2006 by the learned Addl. Chief Judicial Magistrate (Special), Cuttack. The applications were related to 2(C) C.C. Nos.48, 49, and 50 of 1994, filed by the Income Tax Department against the common petitioner. The main legal issue was whether the criminal proceedings should continue against the petitioner despite the assessment order, which was the basis for the criminal cases, being set aside by the appellate authority. The Supreme Court's decision in K.C. Builders and another v. The Asst. Commissioner of Income Tax was pivotal, as it established that once the findings of concealment and penalties are struck down, the criminal proceedings based on those findings should also be reconsidered.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 798327 (HC-CUTTACK)
• Appeal Type: Others
• Pronouncement Date: 14-05-2020
• Assessment Year: misc
• Other Referred Cases: K.C. Builders and another v. The Asst. Commissioner of Income Tax
• Laws Referred To: Section 482 of Cr.P.C., Section 204 of the Code of Criminal Procedure, Section 271(1)(c) of the Income Tax Act
• Result in Favour of: Applicant
• Court: HIGH COURT
• Keywords: Assessment Order; Criminal Procedure; Criminal Procedure; Income Tax; Penalties; Quashment
• Section: 271(1)(c); 482; 204

Judgement Text

" CRLMC No.2869 of 2006, CRLMC No.2870 of 2006 And CRLMC No.2871 of 2006 19. 14.05.2020 All these three applications filed under Section 482 of Cr.P.C. having arisen out of the common order dated 25.03.2006 passed by the learned Addl. Chief Judicial Magistrate (Special), Cuttack in 2(C) C.C. Nos.48 of 1994, 49 of 1994 and 50 of 1994 filed by the present common opposite party against the present common petitioner, for the sake of convenience, all the three are being disposed of by this common order. 2. I have heard the learned counsel appearing for the petitioners and perused the impugned order as well as the other relevant papers / documents on record. None appeared from the side of the common opposite party – Income Tax Department on 07.02.2020 when the cases were taken up for hearing. 3. The matter was earlier before this Court in CRLMC Nos.148 of 1999, 169 of 1999 and 170 of 1999, and this Court disposed of all those three cases vide the common order dated 16.12.2005, which, for sake of relevance and ready reference is re-produced here below:- CRLMC No.2869 of 2006 2 Contd………. 14.05.2020 “Heard learned counsel for the petitioner, none appears for the opposite party. These cases have been filed U/s.482 Cr.P.C. with a prayer to set aside the order dated 4.12.1998 passed by the learned A.C.J.M. (Special Court), Cuttack in 2(C) C.C. Nos.49/94, 50/94 and 48/94. By the said order the court below rejected an application filed by the petitioner U/s.204 of the Code of Criminal Procedure. According to the petitioner as the assessment order, on the basis of which the criminal case was initiated, has been set aside by the appellate authority, nothing survives to implicate the petitioner and as such the case should be dropped. In support of such submission, the petitioner relies upon the decision of the Hon’ble Supreme Court in the case of K.C. Builders and another v. The Asst. Commissioner of Income Tax reported in 2004 (1) Supreme 1064. In the said decision the Supreme Court has held that once the finding of concealment and subsequent levy of penalties under Section 271(1)(c) of the Act has been struck down by the Tribunal, the Assessing Officer has no other alternative except to correct his order under Section 154 of the Act. According to the learned counsel for the petitioner, in view of the aforesaid authoritative pronouncement there is nothing left to be done and the petition filed by the petitioner U/s.204 Cr.P.C. should have been allowed by the learned ACJM (Special Court), Cuttack. I have heard learned counsel for the petitioner at length. I find some force in the submission made. Accordingly I allow this case and set aside the impugned order and direct the ACJM (Special Court), Cuttack to rehear the petition filed U/s.204 Cr.P.C. filed by the petitioner in 2(C) CC Nos.49/94, 50/94 and 48/94 and dispose of the same in consonance with the ratio of the decision K.C. Builders (supra). In view of the fact that the complaint case is pending since 1994, I direct the court below to dispose of the same as expeditiously as possible.” 4. In purported response to the above order, the learned Addl. Chief Judicial Magistrate (Special), Cuttack re-heard the matter and vide the impugned 3 Contd……… 14.05.2020 common order dated 25.03.2006 again rejected the prayer of the common accused-petitioner, and fixed all the three cases for consideration of charge. The learned Addl. Chief Judicial Magistrate (Special), Cuttack appears to have distinguished the case of K.C. Builders and another vrs. Assistant Commissioner of Income Tax, reported in (2004) 2 SCC 731, with the observation that since in the cases at hand the appeals preferred by the complainant-opposite party challenging the order of the Income Tax Appellate Tribunal cancelling the penalties imposed on the accused-assessee are still pending, the matter could not be said to have reached its finality. The aforesaid ground does not survive any more inasmuch as the Income Tax Appeals bearing Nos.30, 31 and 32 of 2004 preferred by the opposite party have been disposed of by this Court on 07.01.2014 by way of dismissal for non-prosecution. 5. In the facts and circumstances indicated above, and keeping in view the ratio of K.C. Builders (supra), the impugned common order passed in 2(C) CC Case Nos.48, 49 and 50 of 1994 is found liable to be set- 4 MRS Contd……… 14.05.2020 aside. 6. In the result, all the CRLMCs are hereby allowed with quashment of the common order dated 25.03.2006 passed by the Addl. Chief Judicial Magistrate (Special), Cuttack in 2(C) CC Case Nos.48, 49 and 50 of 1994 and the proceedings of those cases. ……………………… S.Pujahari, J. 5 6 "