Delhi District Court
Shri Dinesh Ahuja vs Acit on 19 December, 2012
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In the Court of Ms. Kaveri Baweja
Additional Sessions JudgeFTC (Central)
Tis Hazari Courts: Delhi.
Criminal Revision No. : 92/12
Unique ID No. : 02401R0508412012
Shri Dinesh Ahuja
Prop. M/s Park Leather,
8/6508, Dev Nagar, Karol Bagh,
New Delhi. ..Revisionist
Versus
ACIT, Circle 33(1)
C.R. Building,
New Delhi110002 ..Respondents
O R D E R
19.12.2012
1. Present revision petition is directed against the order dated 12.09.2012 passed by the ld. ACMM (Spl. Acts), Central District, Delhi. By the said order (hereinafter referred to as the impugned order) the learned Trial Court framed charges against the petitioner under Sections 276C(2), 276CC and 276D of IT Act.
2. The brief facts of the case necessary for disposal of the revision petition are that the Income Tax Department filed a complaint :2: against the petitioner herein under Sections 276C(1) (Attempt to evade tax, penalty or interest), 276C(2) (willful attempt to evade payment of tax, penalty), 276CC (failure to furnish return of income) and 276D (failure to produce accounts accounts and documents).
3. It is the case of the complainant that a survey was conducted on 21.11.2003 at the business premises of the petitioner and unaccounted stock and fictitious creditors were detected. During survey, the petitioner surrendered a sum of Rs.75 lacs and tendered three cheques of Rs.7.5 lacs each towards tax. Out of these, two cheques deposited in the bank were returned by the bankers unpaid due to insufficiency of funds. It is the case of the respondent/complainant that the assessee i.e. the petitioner herein deals in leather in the name of M/s Park Leather. For the Assessment year 200405, Form No.3CB and 3CD were filed on 01.11.2004, but no return was filed. As per Profit & Loss in the Audit Report net income was Rs.73,01,863/. Despite the notice having been issued under Section 142(1) and 148 of the Act and issuance of summons under Section 131 and 142(1), there was no compliance of the same by the petitioner herein. The assessment order :3: and the demand notice under Section 156 of the Act are stated to have been duly served upon the petitioner herein, but the petitioner did not pay the taxes despite notice under Section 121 and attachment order under Section 226(3).
4. It is alleged that the petitioner was under an obligation to file report for Assessment Year 200405 by 31.04.2004, but he has not willfully filed the same, though he was having taxable income. The tax payable on regular assessment after adjusting Advance Tax and TDS was Rs.49,15,977/ and the petitioner willfully committed offence punishable under Section 276CC besides under Section 276D of the Act by not willfully complying with the notices served under Section 142(1) of the Act. He has thus alleged to have committed evasion of tax and offence punishable under Section 276C(1) besides offence under Section 276C(2) of the Act.
5. Learned Trial Court, after considering the precharge evidence led on record directed framing of charge under Sections 276C(2), 276CC and 276D of IT Act vide impugned order dated 12.09.2012 against the revisionist herein.
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6. The present revision petition is directed against the said order, which has been challenged primarily on the ground that in view of the fact that no penalty was imposed under Section 271(1)(c) for tax evasion or under Section 271(1)(b) for failure to comply notice under Section 142(1) or under Section 271(F) for not filing return or under Section 221 for non payment of tax, the prosecution could not have continued and is liable to be quashed. It was argued that it is well settled law that in a case where penalty is deleted/dropped, the prosecution has to be quashed at any stage of proceedings even if charge is framed and evidence is recorded. In support of his contention, learned counsel for the revisionist relied upon the following judgments:
1. K.C.Builders & Anr. vs. ACIT (2004) 265 ITR 562 (SC).
2. Harprashad and Co. Ltd. vs. IAC (1998) 229 ITR 101 (Del).
3. Mahadeo Lal Agarwala vs. State of Bihar & Another (1997) 224 ITR 119 (Patna).
4. Gopalji Shaw vs. ITO (1988) 173 ITR 554 (Cal).
5. Badri Prasad vs. UOI (1998) 234 ITR 136 (MP).
6. ITO vs. Mohinder Pal Ajay Kumar (1993) 203 ITR.
7. Brij Mohan vs. CIT (1979) 120 ITR 1 (SC).
8. Addl. CIT vs. Liladhar Chhajuram (1983) 140 ITR 416 (MP).
9. CIT vs. M.George & Bros. (1983) 140 ITR 416 (MP).
10. CIT vs. K.Srinivasan (1972) 83 ITR 346 (SC).
11. Govind Saran Ganga Saran vs. CST (1985) 155 ITR 144 (SC). :5:
12. CIT vs. Raunaq & Co. (P) Ltd. (1983) 140 ITR 407 (Del).
13. ITO vs. Chiranjilal Cotton Industries and Others (2002) 254 ITR 181 (P&H).
14. Sushil Kumar Saboo vs. State of Bihar & Anrs. (2011) 336 ITR 202 (Patna).
15. Bandhu Machinery Pvt. Ltd. & Ors. vs. ACIT (Crl. Appeal No. 368 of 2003 dated 10.03.2003) (SC).
16. Bandhu Machinery Pvt. Ltd. & Ors. vs. Additional Chief Metropolitan Magistrate & Anr. [2003] 259 ITR 703 (Delhi).
17. Income Tax Officer vs. Rajan & Co. [2007] 160 Taxman 333 (Delhi).
18. Sudarshan Jain vs. ACIT (2004) 270 ITR 312 (P&H).
7. Per contra, learned counsel for the respondent opposed the arguments of the petitioner and relied upon the following judgments during the course of his arguments : (1) Raghunath Pandey vs. State of Bihar (1998) 150 CTR (Pat) 145.
(2) V.P.Punj vs. Asstt. Commissioner of Income Tax & Anr., 94 (2001) DLT 156.
8. It was contended by learned counsel for the Respondent that he fairly conceded before the ld. Trial Court that as the penalty imposed upon the petitioner under Section 276(C)(1) of the Act was deleted, no charge is made out against him under the said statutory provision. A perusal of the impugned order dated 12.09.2012 also :6: reveals that the learned trial court recorded this contention of the learned counsel for the respondent and after considering the material on record, directed the petitioner to be charged for offence under Sections 276C(2), 276CC and 276D of IT Act.
9. It was further contended by learned counsel for the respondent that no penalty was initiated or levied by the Income Tax Department on the petitioner under Sections 271(1)(b) or under Section 271 (F) of the IT Act and hence, in these circumstances, the question of deleting or dropping of prosecution does not arise. Consequently, the judgments relied upon by learned counsel for the revisionist have not application to the facts of the present case. It was contended that the judgments relied upon by the learned counsel for the revisionist have no application to the present case as in all the said cases, the Hon'ble Superior Courts were dealing with the cases where penalty had been imposed/levied by the Income Tax Department, though it was latter deleted/cancelled in appellate proceedings. Distinguishing the present case, it was contended by learned counsel for the revisionist that since the Income Tax Department did not initiate levy of penalty upon the :7: revisionist under Sections 271(1)(c) & 271(1)(b) of the IT Act, the Prosecution may be quashed, as prayed.
10. It was further contended that at the stage consideration of charge, the court has to consider the material on record prima facie and the contention of the revisionist that on account of his acute financial difficulty, he was unable to pay the tax and that he has been paying the same in installments, cannot form the basis of interfering in the impugned order.
11. I have considered the aforesaid submissions and gone through the relevant case law. Upon considering the relevant statutory provisions and the case law cited before me, I find myself inclined to accept the submissions of the learned counsel for the Respondent. Learned counsel for the respondent submits that since the process of levy of penalty was not initiated by the Income Tax Office in the first place for all the alleged offences except offence under Section 271(1)
(c), the question of deletion or cancellation of penalty and consequently dropping of prosecution for remaining offences as alleged in the present case does not arise.
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12. In view of the aforesaid facts and circumstances and Raghunath considering the law as laid down in the judgment titled as Pandey vs. State of Bihar (Supra) and V.P.Punj vs. Asstt. Commissioner of Income Tax & Anr.(Supra), I find that the impugned order does not suffer from any illegality much less from any infirmity. In the light of the above observations, I find that the impugned order requires no interference whatsoever. The revision petition being devoid of merits is accordingly dismissed. TCR be sent back to the ld. Trial Court along with a copy of this order for information. Revision file be consigned to record room. Parties are directed to appear before the ld. Trial Court on 20.12.2012.
Announced in open court today on 19.12.12 (Kaveri Baweja) ASJFTC (Central) Delhi