JUDGMENT
M. Karpagavinayagam, J.
1. South India Surgical Company, Chennai, has filed these applications praying for quashing of the proceedings in four private complaints filed by the Income-tax Officer, the respondent herein, for the offences under Sections 276C, 277 and 278B of the Income-tax Act, 1961, read with Sections 193, 196 and 420 along with Sections 34 and 120B of the Indian Penal Code, 1860, in respect of the four assessment years, namely, 1976-77 to 1979-80 with the allegation that there had been a concealment of income arising out of a search and seizure at the petitioner’s premises.
2. Counsel for the petitioner has raised two points seeking for the quashing : (1) Though the complaint was filed in the year 1988, there is no progress in the trial. Since there is an inordinate delay in the conduct of the trial, the proceedings are liable to be quashed. (2) The penalty which was originally imposed upon the petitioner has been reduced by the Tribunal under Section 273A(4) of the Income-tax Act and, consequently, the prosecution cannot be allowed to continue in view of the bar contained in Section 279(1A) of the Income-tax Act.
3. Although on the strength of these two points, the above applications have been filed, learned counsel for the petitioner did not make arguments in respect of point No. 1, that is regarding the question of delay. It is mainly argued by counsel for the petitioner in regard to the question whether penalty reduced by the Tribunal has got any bearing on the prosecution proceedings pending before the trial court.
4. In respect of the second point, counsel for the petitioner and counsel for the respondent would argue at length with equal vehemence. Both counsel would cite several authorities in support of their respective stand.
5. I have heard counsel for the parties and also gone through the entire records placed before this court by both the parties.
6. In regard to the first point raised in the quashing petitions, learned counsel for the petitioner correctly did not advance any argument, in view of the fact that the petitioner also was responsible for the delay in the conduct of trial
7. Initially, the petitioner filed quashing applications in these cases on November 3, 1988, in Criminal O. P. Nos. 9116, 9118, 9120 and 9122 of 1998. These petitions were pending before this court for about four years. On January 21, 1992, this court after hearing counsel for the parties, dismissed the above quashing applications on the merits. Again on February 28, 1993, the petitioner filed Criminal O. P. Nos. 2715 to 2718 of 1993, for quashing these proceedings and obtained stay of the trial. Ultimately, on April 19, 1994, even though elaborate arguments were advanced on the merits, counsel for the petitioner requested permission from this court to
withdraw the petitions to allow the petitioner to face trial. Accordingly, the same were dismissed on April 19, 1994. In the trial court also, the petitioner filed an application on July 8, 1997, for discharge under Section 245 of the Code of Criminal Procedure, 1973, and the same was dismissed on January 7, 1998. These things would make it clear that the petitioner filed application after application either before the trial court or before this court seeking for discharge from these cases by stalling the trial for considerable number of years. However, I need not delve into this aspect as counsel for the petitioner himself did not press the said point.
8. Let us now go to the second point which was argued at length.
9. According to counsel for the petitioner, the Income-tax Appellate Tribunal through its common order dated November 22, 1995, held that there had been a settlement arrived at between the petitioner and the Department and the said terms were not complied with and therefore, only a minimum penalty of 10 per cent, was levied. Thus, the Tribunal allowed the appeal and directed the authorities to honour the settlement between the parties. Pursuant to the above order, the petitioner filed a petition before the Commissioner of Income-tax on March 26, 1996. In the light of the order of the Tribunal, the Commissioner of Income-tax was pleased to pass an order on June 12, 1996, reducing the penalty to the minimum 10 per cent. Since this order has been passed under Section 273A(4) of the Act, the prosecution is barred as provided under Section 279(1A), in view of the fact that the penalty is reduced to 10 per cent.
10. Learned counsel for the petitioner while arguing this point elaborately, would admit that on the very same point, the petitioner filed a discharge application before the trial court under Section 245 of the Code of Criminal Procedure, and the same was withdrawn by the petitioner, since it was felt at that time that it would be desirable that the said point could be elaborately argued at the time of trial. This factor has been admitted in the quashing application itself in paragraphs 8 and 9. However, learned counsel for the petitioner would submit that the petitioner was constrained to file another application for quashing mainly due to the authoritative pronouncement rendered by the Supreme Court in Prem Doss v. ITO observing that the order passed by the Tribunal must be construed to be the order under Section 273A(4) and consequently, Section 279(1A) would come into play.
11. Arguing contra, learned counsel for the respondent would state that the said decision would not apply to the present facts of the case, since the observation made by the Supreme Court was not a ratio and, as such, the same cannot be made use of by the petitioner in these cases, the facts of which are entirely different. According to counsel for the respondent, the Supreme Court dealt with the order of the Tribunal, wherein it was held that there was no concealment of income. But, in this case, the Tribunal
has not given such a finding and, as such, both Sections 273A(4) and 279(1A) would not apply at all.
12. In the light of the above submissions, this court is constrained to consider whether the decision rendered by the Supreme Court reported in Prem Dass v. ITO would in any way help the petitioner.
13. Before dealing with the said aspect, it is quite important to notice two things :
On the very same ground, the petitioner filed a petition for discharge under Section 245 of the Code of Criminal Procedure, on June 21, 1996, and the same was dismissed on July 8, 1997. According to the counter filed by the respondent, the said application was dismissed on the merits. But, as per the petition for quashing, in paragraphs 8 and 9, the said discharge petition was withdrawn with intention to argue the point whether the order reducing the penalty was one under Section 273A(4) or not, at the time of conclusion of the trial. Having taken such a stand, the petitioner has now filed these applications for quashing on the very same ground on the strength of the Supreme Court decision.
14. Admittedly, P. W. 1 has been examined both in chief and cross on March 31, 1999. Even according to the petitioner, as admitted in the petition for quashing, P.W.1 was cross-examined with reference to the order passed by the Tribunal reducing the penalty to 10 per cent, and also the consequent order passed by the Commissioner. Thus, it is clear that these applications have been filed before this court only after commencement of the trial.
15. In the light of the said fact situation, this court is called upon to decide the question as to whether the order passed by the Tribunal and the Commissioner of Income-tax has got bearing on the prosecution proceedings, in view of the bar contained in Section 279(1A).
16. On considering the submissions made by counsel for the parties and also on going through the judgment of the Supreme Court reported in Prem Dass v. ITO , this court is unable to come to the conclusion that the order passed by the Tribunal would be construed to be the order under Section 273A(4) so as to attract Section 279(1A) of the Income-tax Act.
17. At this point of time, it is relevant to note that learned counsel appearing for the petitioner would point out that the petitioner already moved a petition under Section 273A(4) of the Act before the Administrative Commissioner for waiver of penalty and the Commissioner by the order dated August 25, 1987, dismissed the said petition.
18. It is also pointed out that, subsequently, the petitioner moved the Central Board of Direct Taxes for withdrawal of prosecution and the same has also been dismissed on July 6, 1994. However, we are concerned with the order passed by the Tribunal dated November 22, 1995, and the consequent order passed by the Commissioner on June 12, 1996, reducing the penalty to minimum 10 per cent.
19. It is true, as laid down in P. Jayappan v. S. K. Perumal, First ITO [1984] 149 ITR 696, that the criminal court has to give due regard to the result of any proceedings under the Income-tax Act having a bearing on the question in issue and in an appropriate case it may drop the proceedings in the light of an order passed under the Act. But, in the very same judgment, it has been held that it does not mean that the result of a proceeding under the Act would be binding on the criminal court, since the criminal court has to judge the case independently on the evidence placed before it. While considering the issue raised before this court, it would be appropriate to keep the above principle in mind.
20. It is no doubt true that it is held by the Supreme Court in Prem Dass v. ITO that the penalty proceeding in question having ended in favour of the assessee/accused would have a bearing on the prosecution and the order passed under Section 273A(4) either by the Commissioner or by the Tribunal would attract Section 279(1A) of the Act. But, in the said case, the Tribunal found that there was no concealment of income and it was a case purely on the difference of opinion as to the estimate.
21. Furthermore, in that case, though the Commissioner reduced the penalty, ultimately, the Tribunal totally set aside the order imposing penalty. But, that is not the case here. Either the order passed by the Tribunal on November 22, 1993, or the order passed by the Commissioner of Income-tax on June 12, 1996, would not reveal any finding to the effect that there was no concealment of income. In other words, the penalty proceedings have not culminated in favour of the petitioner as in Prem Dass case .
22. To put it clearly, in Prem Dass’ case , the Tribunal has specifically found that there was no concealment. In that context it was held that the finding of fact with reference to the allegation of concealment would have a bearing on the prosecution. But, in the present case, there is no such finding of fact. On the other hand, it is the specific case of the prosecution as mentioned in the complaint that there was a concealment of huge amount and also wilful attempt to evade tax. Hence, the judgment of the Supreme Court relied upon by the petitioner would not be of any use to hold in his favour.
23. That apart, it is contended by counsel for the respondent that the order of the Tribunal dated November 22, 1993, or the consequent order passed on June 12, 1996, by the Commissioner of Income-tax has not been passed under Section 273A(4) so as to attract Section 279(1A) of the Act.
24. Under those circumstances, adequate opportunity shall be given to the prosecution to prove the allegations contained in the complaints which
would constitute the offences alleged by producing materials before the trial court and also to establish that Section 279(1A) would not get attracted on the basis of the materials to be produced before the trial court. It is also open to both parties to place the materials before the court during the course of trial to establish their respective contentions.
25. With the above observations, the petitions are dismissed. Consequently, Criminal M. P. Nos. 2727 to 2730 of 1999, are closed.
26. Since the present complaints are pending from 1988, the trial court is directed to go on with the trial and dispose of the matter within six months from the date of receipt of a copy of this order. The petitioner is directed not to put any more hurdle to the continuance of the trial and he shall co-operate for the disposal of the cases to enable the trial court to comply with the directions given by this court.