Govind K. Popley vs G.M. Kini, First Income Tax Officer and Others

D.G. Deshpande, J.—Heard advocates for the petitioner and the respondents. A. P. P. for the State/respondent present.

The petitioner was prosecuted by the respondents under Sections 276C and 277 of the Income Tax Act, 1961, read with Section 279(1) of the Income Tax Act on the ground that the petitioner has committed a default of concealing his income by making false entries and statements, etc., by undervaluing the closing stock for the assessment year 1979-80. The accused/petitioner filed an application before the Metropolitan Magistrate on the ground that the basis of the complaint is not in existence in view of the findings given by the Commissioner of Income Tax (Appeals) by his order dated March 11, 1991. The Commissioner of Income Tax has given a finding in the said order that there is no concealment and, secondly, there is no discrepancy in the quantum of closing stock since the applicant is following a particular method of valuation of stock. However, the magistrate rejected this application on the ground that the proceedings before the appellate authority of the Income Tax and the court were two independent proceedings and the criminal court can independently decide the allegations made by the applicant before it without reference to the finding''s given by the Departmental authorities.

Even after hearing counsel for the Revenue I am unable to agree with the observations made by the magistrate in view of the recent position of law in this regard as laid down by the Supreme Court and particularly when the offence is said to have been committed because of a particular valuation and when the Departmental authorities have themselves given findings that the method of valuation adopted by the petitioner is not at all wrong or illegal, nothing remains in the complaint. Consequently, the petition is allowed. Rule made absolute. The complaint under the aforesaid sections of the Income Tax Act against the petitioner is quashed.