JUDGMENT
Hemant Gupta, J.
1. In the present revision petition challenge is to the order dated April 9, 1992, passed by the Sessions Judge, Faridkot, whereby, the order of discharge passed by the Chief Judicial Magistrate, Faridkot, for an offence under Sections 276C and 277 read with Section 278B of the Income-tax Act, 1961, was set aside.
2. The Income-tax Department had sought prosecution of the petitioners, inter alia, on the ground that the petitioners have claimed depreciation at the rate of 40 per cent. on account of purchase of a new truck, which was allegedly purchased on March 26, 1984, but was not put to use till March 31, 1984,
and, thus, the petitioners have made wrong claim of depreciation. However, the assessee surrendered the amount of depreciation on February 2, 1986, on the condition (no penalty or prosecution) which was accepted by the Department. But, subsequently, penalty proceedings under Sections 276C, 277 read with Section 278B of the Income-tax Act were initiated.
3. Before the learned Chief Judicial Magistrate, the petitioners moved an application for their discharge on the ground that there were no sufficient grounds to proceed with the complaint and, therefore, no offence can be said to have been committed by the petitioners. However, such order passed by the Chief Judicial Magistrate was set aside by the revisional court holding that the prosecution initiated by the Income-tax Officer is independent of the penalty proceedings and, thus, concluded that the order of discharge passed by the learned Chief Judicial Magistrate is not sustainable.
4. The petitioners moved Criminal Miscellaneous No. 45061 of 2002 placing on record the order passed by the Income-tax Appellate Tribunal, wherein, the penalty proceedings have attained finality, inasmuch as, the penalty proceedings were dropped.
5. Counsel for the petitioners has cited P. Jayappan v. S.K. Perumal, First ITO [1984] 149 ITR 696 (SC) and G.L. Didwania v. ITO [1997] 224 ITR 687 (SC) to contend that if the departmental proceedings have attained finality in favour of the assessee, then the very basis to prosecute the assessee is knocked down and, thus, prosecution of the petitioners is an abuse of the process of law. On the other hand, learned counsel appearing for the Department has cited Ashok Biscuit Works v. ITO [1988] 171 ITR 300 (AP) and C.G. Balakrishnan v. ITO [1988] 171 ITR 1 (Ker) to contend that prosecution is on basis of the facts mentioned in the complaint which are to be seen for an offence under Sections 276C and 277 read with Section 278B of the Income-tax Act.
6. In view of the judgment of the Supreme Court, mentioned above, wherein, it has been held that if the penalty proceedings have been set aside in the departmental proceedings then the very basis of launching of the prosecution against the assessee stands knocked down. In such facts, the Supreme Court had quashed the proceedings initiated under the Income-tax Act against the assessee. In view of the said judgment, I find that the prosecution against the petitioner is an abuse of the process of law. The very basis of penalty has been struck down by the authorities under the Act.
7. Consequently, I allow the present petition, set aside the order of the sessions judge and quash the complaint filed by the Department.