IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CRIMINAL APPLICATION No. 528 of 1999 For Approval and Signature:
HONOURABLE MR.JUSTICE M.R. SHAH ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
========================================================= M/S ABHIKHEK CORPORATION & 2 - Applicant(s) Versus COMMISSIONER OF INCORM TAX & 2 - Respondent(s) ========================================================= Appearance :
NOTICE SERVED for Applicant(s) : 1 – 3.
MR IJ DESAI for Applicant(s) : 1 - 3.
MRS MAUNA M BHATT for Respondent(s) : 1 - 2. MR BB NAIK for Respondent(s) : 1, PUBLIC PROSECUTOR for Respondent(s) : 3, ========================================================= CORAM : HONOURABLE MR.JUSTICE M.R. SHAH Date : 23/01/2012
ORAL JUDGMENT
1.00. Present petition under Article 226 of the Constitution of India has been preferred by the petitioners herein – original accused to quash and set aside the impugned criminal proceedings being Criminal Case No.957 of 1999, pending in the court of learned Chief Judicial Magistrate, Surat for the offences punishable under sections 276(C)(1) and 277 read with section 278(B) of the Income Tax Act, 1961.
2.00. The respondent No.2 herein - Joint Commissioner of Income Tax, Special Range-II, Surat has lodged the impugned Criminal Case No.957 of 1999 against the petitioners herein – assignees in the court of learned Chief Judicial Magistrate, Surat for the offences punishable under sections 276(C)(1) and 277 read with section 278(B) of the Income Tax Act, 1961, for the Block Period commencing from 1/4/1986 to 4/7/1996 and having Block Period from 1987-88 to 1997-98. That being aggrieved by and dissatisfied with the impugned complaint, the petitioners herein – original assignee has preferred the present petition under Article 226 of the Constitution of India read with section 482 of the Code of Criminal Procedure to quash and set aside the same.
3.00. Though served nobody appears on behalf of the petitioners and therefore, this Court has no other alternative but to proceed further with the present petition ex-parte as the present petition is of the year 1999.
4.00. It appears from the pleadings pleaded in the present petition that the petitioners have sought to quash and set aside the impugned complaint / criminal proceedings mainly on the ground that no proceedings were initiated by the Income Tax Department for imposing penalty under section 271(1) or under section 273(A) of the Income Tax Act and on the ground that there is breach of section 279(1) of the Income Tax Act. Thus, the impugned complaint is sought to be quashed and set aside for non-compliance of section 279(1) of the Income Tax Act and on the ground that if the proceedings for imposing penalty would have been initiated by the Income Tax Department under section 271 or 273(A) of the Income Tax Act, in that case there might have been an order for reduction or waiver of penalty and if that be so, in view of section 279(1) (A) of the Income Tax Act, prosecution against the petitioners for the offences punishable under section 276(C) or 277 of the Income Tax Act would not have been maintainable.
5.00. Ms.Anushree Kapadia, learned advocate appearing on behalf of the respondents - Income Tax Department has drawn attention of this Court to the sanction granted by the competent authority as required under section 279(1) of the Income Tax Act (Page No.73). Therefore, it is submitted that as such there is compliance of section 279(1) of the Income Tax Act.
5.01. Now, so far as the case on behalf of the petitioners so pleaded in the petition relying upon section 279(1)(A) of the Income Tax Act that if there is an order of reduction of penalty and/or waiver of penalty, prosecution for the alleged offences was not maintainable and therefore, if the proceedings for penalty would have been initiated, in that case there might be reduction of penalty and/or waiver of the penalty and therefore, the impugned complaint for the alleged offences would not have been maintainable considering section 279(1) (A) of the Income Tax Act, is concerned, it is submitted that section 279(1)(A) would be applicable only in a case where the proceedings are initiated by the Department for imposing penalty and contention on behalf of the petitioners cannot be considered on ifs and buts. It is submitted that in a case where the proceedings for penalty are not initiated by the Department, in that case, provisions of section 279(1)(A) would not be attracted and/or applicable. Therefore, it is requested to dismiss the present petition.
6.00. Heard Ms.Anushriee Kapadia, learned advocate appearing on behalf of the respondents – Income Tax Department and considered the impugned complaint as well as the pleadings pleaded by the petitioners in the present petition and documents on record, it appears that before launching the prosecution and filing the impugned complaint against the petitioners, sanction as required under section 279(1) of the Income Tax Act was obtained. Under the circumstances, it cannot be said that the impugned complaint is in breach of section 279(1) of the Income Tax Act.
6.01. Now, so far as the reliance placed upon section 279(1) of the Income Tax Act is concerned, it will not be applicable in the present case, as no proceedings for penalty for initiated by the Income Tax Department and there is no question of any reduction and/or waiver of penalty. Only in a case where penalty proceedings are initiated by the Income Tax Department and thereafter either there is reduction in the penalty and/or waiver as provided under section 273(1)(A) of the Income Tax Act, in that case only prosecution for the alleged offences would be maintainable. That is not the position here. Under the circumstances on the aforesaid ground the impugned complaint is not required to be quashed and set aside.
6.02. It is required to be noted that in the present case the income was disclosed by the petitioners after the notice was issued by the Income Tax Department. Be that it may. The aforesaid aspects are required to be considered at the time of trial. However, on the grounds so pleaded in the petition, recorded hereinabove, the impugned complaint is not required to be quashed and set aside.
7.00. In view of the above and for the reasons stated above, present petition fails and the same deserves to be dismissed and is accordingly dismissed. Rule is discharged. Ad-interim relief granted earlier, if any, stands vacated forthwith.
[M.R. SHAH, J.] rafik