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2002 DIGILAW 343 (PNJ)

Income-tax Officer v. Taran Taran Steel Sales

2002-04-01

JAWAHAR LAL GUPTA, N.K.SUD

body2002
Judgment Jawahar Lal Gupta, J. 1. A complaint under Sections 276C and 277 of the Income-tax Act, 1961, was filed against the respondent-firm and its partners. The trial court after examination of the matter has found that the prosecution has failed to prove its case beyond a shadow of doubt. Thus, the respondents were acquitted. Aggrieved by the order, the complainant has filed this application for the grant of leave to appeal. 2. Notice of the petition was given. Counsel for the parties have been heard. 3. Mr. Sawhney, learned counsel for the complainant, submits that an addition of Rs. 30,000 was sustained by the Appellate Tribunal. Thus, the case under Sections 276C and 277 of the Act was made out. On behalf of the respondents, it has been pointed out by Mr. B.P. Singla that the respondents were not given adequate opportunity during the proceedings under Section 271(1)(c) of the Act. The order of penalty was set aside by the Tribunal. Thus, the mere fact that an addition of Rs. 30,000 had been sustained, could not be a ground for the prosecution of the respondents. 4. The assessee-firm had shown a credit of Rs. 94,678 in the name of two firms. The Assessing Officer had disallowed the claim on the ground that Som Nath who had allegedly made the deposit had not been produced. However, on appeal, the claim of the assessee was partly accepted. The credit in respect of only Rs. 30,000 was "found to be doubtful". During the course of penalty proceedings, Som Nath was not produced for cross-examination. The order of penalty was set aside. In this situation, it cannot be said that the assessee had wilfully attempted to evade any tax, etc., or that it had made a false statement while filing the return. The view taken by the trial court is a possible one. 5. Mr. Sawhney submits that the judgment of the trial court cannot be sustained in view of the decision of their Lordships of the Supreme Court in P. Jayappan v. S.K. Perumal, First ITO [1984] 149 ITR 696. This was a case where the assessee had approached the court and it was held that the mere pendency of reassessment proceedings could not operate as a bar to the institution of criminal prosecution for offences punishable under Section 276C or 277. Such is not the situation in the present case. This was a case where the assessee had approached the court and it was held that the mere pendency of reassessment proceedings could not operate as a bar to the institution of criminal prosecution for offences punishable under Section 276C or 277. Such is not the situation in the present case. Herein, the Tribunal has found that no case for the imposition of penalty under Section 271(1)(c) was made out against the assessee. When it has been found by the Tribunal that the assessee has not concealed any income or furnished any inaccurate particulars, it cannot be said that the assessee is guilty of an offence as contemplated under Section 276C or Section 277. 6. No other point has been raised. 7. In view of the above, we find that no ground for grant of leave to appeal is made out. The petition is, accordingly, dismissed. No costs.