ORDER M.L. Malik, J. - 1. This revision is directed against the order of the Second Additional Judge to Sessions Judge, Jabalpur, passed on 18-4-1975 in Criminal Revision No. 93 of 1974. 2. The Income Tax Officer, B- Ward, Jabalpur filed a complaint against Dr. B. M. Arora in the Court of the Chief Judicial Magistrate, Jabalpur, on 28-3-1974 under section 420 read with section 511 of the Indian Penal Code and under section 277 of the Income Tax Act on the usual allegations that that Dr. Arora had filed a false return of income on 3-10-1968 for the Assessment Year 1968-69 and later a revised return on 10-7-1969 duly verified and that he knew or had reason to believe the account and the statement in verification to be false, thereby be tried to evade payment of correct tax and thus attempted to cheat the Department of its revenue. 3. The attached schedule 'A' gives the figures of income shown by the assessee in the two returns, the Income Tax Officer’s assessment, the assessment made by the Appellate Assistant Commissioner of Income Tax in appeal and the ultimate order of the Income Tax Appellate Tribunal setting aside the assessment and the levy of penalty. By order dated 29-6-1973, the assessment case was remanded to the I.T.O. for a reassessment with certain specific directions. 4. The complaint came to be filed on 28-3-1974 before the reassessment proceedings commenced after the remand. The assessee raised preliminary objections that after the Income Tax Appellate Tribunal had set aside the order of assessment and also the levy of penalty, the Commissioner could not have authorized prosecution nor could the complaint be proceeded with by reason of section 279 (1-A) of the Income Tax Act until the reassessment proceedings were completed. 5. The learned Additional Judge to the Sessions Judge held that the prosecution of the assessee was premature. This is what he said in paras 9, 10, 11 and 12 of his order :- "9. Now the case is before the Income-Tax Officer for fresh assessment. The Income-tax Officer has full powers while doing this work, if he is satisfied that the case is covered under Clause (c) of sub-section (1) of section 271(l) (c) (1) to redirect the assessee to pay by way of penalty an amount upto twice the amount concealed. Now the case is before the Income-Tax Officer for fresh assessment. The Income-tax Officer has full powers while doing this work, if he is satisfied that the case is covered under Clause (c) of sub-section (1) of section 271(l) (c) (1) to redirect the assessee to pay by way of penalty an amount upto twice the amount concealed. The assessee has the right to go in appeal against such imposing penalty, and the Commissioner may in his discretion under sub section (4-A) of section 271 reduce or waive the penalty. In this set of circumstances the consideration that the proceeding with the complaint would mean shutting the doors to a would be likely prohibition of not being proceeded against, is apparently relevant and material consideration. The conclusion arrived at by the trial Court that the complaint should be taken as premature seems correct. 10. True that the basis of the complaint is not the assessment, it is the false statement in verification in the return. True that the verification is false is apparent. May be, that the explanation for such false statement without further proof may not be taken as reasonable and further evidence in rebuttal might be necessary. But with all this, when the prosecution for the falsity is made conditional by the statue itself there can be no further proceeding against if the condition would not exist. 11. True that complaint is also under section 420 read with section 511, I.P.C. For these sections obviously the provision of subsection (1-A) of section 279 of the Income Tax Act does not apply. But we may note that even the allegation for the commission of this offence under I.P.C. and in relation to the same false statement in verification of the return. The weight to be attached to such false statement is yet hanging in air. Proceeding against the non-applicant under these sections, therefore, would not be justified. 12. Discharge of an accused on the ground that the prosecution is premature cannot prejudice the complainant. Such a discharge is not a final say in the matter. If and when occasion permits, the complainant can again approach the Court in prosecuting non-applicant on the same facts but on the necessary set of circumstances. 12. Discharge of an accused on the ground that the prosecution is premature cannot prejudice the complainant. Such a discharge is not a final say in the matter. If and when occasion permits, the complainant can again approach the Court in prosecuting non-applicant on the same facts but on the necessary set of circumstances. I would, therefore, hold that the order of discharge of the non-applicant passed by the Chief Judicial Magistrate is correct, proper and in consonance of the existing facts and circumstances. It needs no interference in revision". 6. The learned counsel for the Department argued that the gravemen of the offence under section 277 of the Income Tax Act was making a statement in verification or delivery of an account which was false to the knowledge of the assessee. The assessment order, the counsel said, was not of any relevance since the assessment proceedings and the proceedings under section 277 of the Income Tax Act could go on simultaneously together once the Commissioner had acted under section 279 of the Act in giving authorisation to prosecute the assessee for giving a false return, provided of course, the penalty imposable or imposed under Clause (iii) of sub section (1) of section 271 had not been reduced or waived by an order of the commissioner passed under section 271 (4-A) of the Act. In the present case, the counsel said, there was nothing to show that the Commissioner had waived or reduced the penalty imposable or imposed, acting under section 271 (4-A) of the Act. The Commissioner had authorized prosecution and the learned Additional Judge to the Sessions Judge, having observed in para 10 of his order that the statement in verification submitted by the assessee was obviously false, the prosecution should have been ordered to be proceeded with. The only provisions that the Courts below could invoke as a bar to prosecution were those contained in section 279 (1) and (l-A) of the Act. And those provisions did not come in the way, The counsel placed reliance on Dr. D.N. Munshi v. N.B. Singh, The question which his Lordship considered was whether the order of Income Tax Tribunal setting aside the penalty was equivalent to an order reducing or waiving the penalty contemplated by sub section (1-A) of section 279 of the Income Tax Act. D.N. Munshi v. N.B. Singh, The question which his Lordship considered was whether the order of Income Tax Tribunal setting aside the penalty was equivalent to an order reducing or waiving the penalty contemplated by sub section (1-A) of section 279 of the Income Tax Act. This is what his Lordship said in answer: "Taking the second question first, it seems that the order of the Tribunal is not contemplated by sub-section (A-I) of section 279, Sub-section (1-A) contains a bar to the institution or continuance of the prosecution against an assessee under section 277. The import of this provision is that in case the Commissioner himself waives the penalty under Sub-section (4-A) of section 271, the prosecution should not be initiated or continued. Sub-section (4-A) of section 271 provides for reduction or waiver of penalty by the Commissioner on the satisfaction reached by him on matters enumeratedin that sub-section. They are of the character of good conduct of the assessee. In such situations the Legislature thought that it is not appropriate to let the Commissioner prosecute the person who has satisfied him in respect of the conditions which permit the reduction or waiver of the penalty.' The Income-tax Appellate Tribunal when it allows an assessee's appeal really does not act on the basis of the law contemplated under sub-section (4-A) of section 271, but does so on the basis of the existence of the conditions on which penalty may be imposable. If it finds that the penalty is not legally imposed, it sets aside the order. The order of the Income-tax Appellate Tribunal is really the order of the assessing authority not imposing a penalty. The order is not contemplated by sub-section (I-A) of section 279 as the order mentioned in that sub-section is the order which is passed Under subsection (4-A) of section 271 and not the order not imposing the penalty. It contemplates waiver and not-non-imposition of penalty. The first question, therefore, must be answered against the accused." 7. I would like to do a bit of exercise in interpreting section 277 of the Income Tax Act. It contemplates waiver and not-non-imposition of penalty. The first question, therefore, must be answered against the accused." 7. I would like to do a bit of exercise in interpreting section 277 of the Income Tax Act. The section, as it reads prior to the Amendment Act of 1975 and as it reads now may be usefully reproduced :- Section 277 prior to the amendment: "False statement in declaration-If a person makes a statement in any verification under this Act or under any rule made thereunder or delivers an account or statement which is false and which he either knows or believes to be false or does not believe to be true he shall be punishable with rigorous imprisonment for a term which may extend to two years: Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the Court, such imprisonment shall not be for less than six months." section 277 after the amendment: "False statement in verification etc.-If a person makes a statement in any verification under this Act or under any rule made thereunder or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable, (i) in a case where the amount of tax, which would have been evaded if the statement or account had been accepted as true, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine; (ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine." The present complaint would be governed by the penal provision as it existed prior to the amendment of 1975. But I have cited the amended section in order to explain a bit of ambiguity that the earlier provision could be attributed with. The plain reading of the section as it is makes an assessee an offender if he gives a false return, knowing it to be false. Let me put a question. But I have cited the amended section in order to explain a bit of ambiguity that the earlier provision could be attributed with. The plain reading of the section as it is makes an assessee an offender if he gives a false return, knowing it to be false. Let me put a question. Supposing an assessee gives inflated income in his return which serves him some purpose, say he gets certain privileges or a title of Rai Sahib, or as a rival candidate for an office, a better income return is an additional qualification, does he commit an offence punishable under section' 277 of the Income Tax Act though he has not evaded tax but has paid something more than what his real income would nave earned to the Department? If the gravamen of the offence is just submitting a false return, the assessee would be guilty though he has not evaded tax, But that is not what the Income Tax Act seems to contemplate. It is the evasion of tax by giving false return which is the gravamen of the offence. The assessee must incur liability of a penalty by concealing the particulars of his income as contemplated by section 271 of the Act. The punishing clause of the amended section (the section as it now stands) makes that position very clear. The punishment now depends upon the quantum of tax evaded. If tax evaded exceeds one hundred thousand rupees, the minimum punishment is six months which may extend to seven years. If tax evaded is less than a hundred thousand rupees, the minimum punishment is three months which may extend to three years. "In any other case" in the second part of the punishing clause means "in any other case of tax evasion." 8. Under the present provision, therefore, since punishment depends on quantum of tax evaded, the magistrate must know what the real income of the assessee was as compared to what he had shown in the Return and how much was the tax evaded. The assessment order finally made, has its own relevance in this context. Section 293 of the Act bars a Civil suit to set aside or modify any assessment order. I need express no opinion whether a criminal Court would be competent to examine the correctness of the assessment order when a Civil Court is not competent. The assessment order finally made, has its own relevance in this context. Section 293 of the Act bars a Civil suit to set aside or modify any assessment order. I need express no opinion whether a criminal Court would be competent to examine the correctness of the assessment order when a Civil Court is not competent. I am presently concerned with the principle of "issue estoppel" raised by the accused assessee. The principle is being applied in favour of the accused and not against him. What he says is that the assessment order which is the basis of the complaint inasmuch as the I. T. O. found certain income to have been concealed, bas been set aside. The I. T. O. has been asked to determine the real income over again, So long that was not done, there was no finding of concealment and no finding that the Return filed by the assessee was false in certain particulars. The I. T. O. was bound by the order passed by the Tribunal inasmuch as the assessee was, and the original assessment order could not be the basis of conviction once it was set aside. 9. It would be pertinent here to refer to the documents filed by the complainant. The documents are the Returns filed by the accused-assessee, notices given to him under sections 142 (1) and 143 (2) of the Income Tax Act, the letter of the I. T. O. and the assessee's rep1y, the statement of the accused recorded by the I. T. O. and the assessment order passed by the I. T. O. Where the assessment order is set aside and the I. T. O. his been asked to start the assessment proceedings afresh, the assessee says that they revert to a position when the I. T. O. is yet to find whether the assessee had concealed the particulars of his income and had incurred a liability of penalty under section 271 of the Act. Take a case where the I. T. O. finds that the assessee had concealed income whereas the Income Tax Appellate Tribunal finds that he had given an honest return, could the prosecution go on once the Commissioner had initiated it on the basis of the I. T. O.'s assessment order though that order had been set aside, and stood substituted by the Tribunal's order, which was binding both on the Department and the assessee? 10. I propose to read sections 271, 277 and 279 (1-A) of the Income Tax Act together. The false statement in verification, or delivery of an account or statement which the assessee knows to be false, should necessarily conceal particulars of income or should furnish inaccurate particulars for which the penalty should either be imposed or become imposable, then alone the assessee would be liable to be prosecuted, provided that the Commissioner authorizing prosecution, does not agree to waive or reduce the penalty imposed or imposable, acting under section 271 (4-A) (now section 273-A), If the Income Tax Appellate Tribunal were to find that It was not a case of concealment of particulars of income nor of inaccuracy in particulars and, therefore not a case where penalty was imposable, obviously it would not be a case for prosecution at all If the prosecution is launched, it must either be withdrawn or the magistrate must discharge the assessee on the principle of "issue estoppel" finality attaching to the Tribunal's order which the authorization of the Commissioner will not be able to get over. 11. There is yet another safeguard provided in section 279 (1) and (A) of the Act. The section may be quoted :- "Section 279. Prosecution to be at the instance of Commissioner-(l) A person shall not be proceeded (a) against for an offence under (Section 275-A) or section 276 or section 276A (or section 276B) or section 276-C or section 277 or section 276-D) or section 277 or section 278 except at the instance of the Commissioner. Prosecution to be at the instance of Commissioner-(l) A person shall not be proceeded (a) against for an offence under (Section 275-A) or section 276 or section 276A (or section 276B) or section 276-C or section 277 or section 276-D) or section 277 or section 278 except at the instance of the Commissioner. (l-A) A person shall not be proceeded against for an offence under section 277 in relation to the assessment for an assessment year in respect of which the penalty imposable upon him under Claus.; (iii) of sub-section (1) of section 271 has been reduced or waived by an order under sub-section (4-A) of that section." Sub-sect ion (1) of section 279 requires that the prosecution must be initiated with the sanction or on the authority of the Commissioner. Where statute confers power, may that be administrative or quasi-judicial the person to whom power is conferred must exercise it in good faith, for furtherance of the object of the statute and he must take into account matters relevant to the exercise of those powers It would be legitimate to presume that while according sanction to prosecute, the papers that were placed before him, were the papers that have been filed along with the challan. The Commissioner was not apprised of the final order passed by the. Income Tax Appellate Tribunal, setting aside the assessment order made by the I. T. O. 12. The assessee has brought to the notice of this Court that after the remand by the Income Tax Appellate Tribunal, the I. T. O. passed a fresh assessment order on 5-5-1975 estimating the assesee’s gross professional receipts at Rs. 56,000/.. the matter went to the Income Tax Appellate Tribunal which estimated his gross professional receipts at Rs. 42,250/-. In the revised return which the assessee had filed on 10-7-1969 he had shown the gross professional receipts at Rs. 40 318/-. The total difference between the Tribunal's estimate of income and that shown in the revised return is of less than Rs. 2000/-. If I. T. O.'s assessment order made on 24-9-1969 is the basis of prosecution, then the difference in gross professional income (i.e. the concealed income) was of nearly Rs. 20,00/. Presumably, when the Commissioner applied his mind to sanction prosecution, the data placed was that the assessee had concealed income to the extent of Rs 20,000/-. 2000/-. If I. T. O.'s assessment order made on 24-9-1969 is the basis of prosecution, then the difference in gross professional income (i.e. the concealed income) was of nearly Rs. 20,00/. Presumably, when the Commissioner applied his mind to sanction prosecution, the data placed was that the assessee had concealed income to the extent of Rs 20,000/-. The final order which now comes to be passed, brings down the difference to below Rs. 2000/- Had this data been placed before the Commissioner, one does not know whether he would have initiated prosecution. 13. The implication of sub-section (1-A) of section 279 deserves to be examined a bit carefully. The assessee is protected from prosecution where the Commissioner acting under section 271 (4-A), reduces or waives the amount of minimum penalty imposable on the assesses under Clause (iii) of sub-section (1) of section 271. Firstly, therefore, the penalty must be imposable or imposed on him before the assesee approaches the Commissioner under section 271 (4-A) and satisfied him on grounds narrated in that section. And secondly, where the statute confers a right or benefit the assessee should not be deprived of that right or benefit by straight way filing a prosecution before he could approach the authority to exercise discretion in his favour. The Commissioner exercises a quasi-judicial power when he acts under section 271 (4-A). The grant of power carries with it by necessary implication the authority to use all reasonable means to make such grant effective. The assessee will have a grievance if he is not heard by the Commissioner on grounds available to him for getting the penalty waived or reduced. 14. The question is once prosecution is initiated at the instance of the Commissioner, should the Magistrate presume that the Commissioner had the correct data placed before him before he accorded sanction and that he had in his discretion declined to waive or reduce the penalty imposed or imposable which he could do under the provisions of section 271 (4-A) of the Act? Could the assessee request the Magistrate to stay trial till he moved the Commissioner under section 271 (4-A), which opportunity he had not till then availed because the penalty proceedings had not been finalized but were simultaneously going on ? Could the assessee say that he would move the Commissioner for withdrawal of the prosecution, the sanction having been accorded on wrong data. 15. Could the assessee say that he would move the Commissioner for withdrawal of the prosecution, the sanction having been accorded on wrong data. 15. Criminal prosecution is a serious matter, The right of an assessee-accused to approach the Commissioner for invoking his powers under section 271 (4-A) could not be stultified. The magistrate would be justified in staying trial and giving an opportunity to the assessee to approach the Commissioner under section 271 (4-A), if an approach was not made before. He could also request the Commissioner to withdraw prosecution if sanction had been accorded on highly exaggerated data. 16. I should not then interfere with the order passed by the learned Additional Judge to Sessions Judge. The dismissal of the court, plaint on the ground that it was premature, has caused no prejudice to the Department. The Department, on the basis of the final order of reassessment and the penalty proceedings, has been reserved the liberty to approach the Commissioner if so advised. for a fresh authorization under section 279 (1) provided the Commissioner has refused to waive or reduce the penalty imposed or imposable under section 271 (l) Clause (iii). 17. The revision is dismissed.