Ravi Medical Agencies vs Union of India and Another

N.K. Jain, J.

The judgment impugned in this revision is rendered in appeal, in affirmance of the judgment of conviction passed by the ACJM, Indore, in Economic Offence Case No. 14 of 1991, convicting the applicants u/s 276C read with section 278B of the Income Tax Act. 1961, and sentencing them to various punishments.

The violation inuestion pertained to the assessment year 1988-89. The department besides launching criminal prosecution also initiated proceedings for imposition of penalty u/s 271(1)(c) of the Act. The penalty was imposed by the assessing authority on 3-8-1990. However, in appeal the Commissioner (Appeals) vide his judgment dated 10-12-1997, vacated the penalty. The order of the Commissioner is affirmed in appeal by the Appellate Tribunal vide judgment dated 31-1-2001.

This court in Sureshchand Gupta Vs. Union of India (UOI), relying on a Supreme Court decision in G.L. Didwania and Another Vs. Income Tax Officer and Another, , has held that the conviction u/s 276C read with section 278B of the Act cannot be sustained when the penalty imposed on the same ground is set aside by the Commissioner or the Tribunal. In fact, the very foundation of the prosecution of these applicants is demolished.

This revision must, therefore, succeed and the same is accordingly allowed and the impugned judgments both passed by the trial Magistrate and in appeal by the sessions court are set aside and the accused-applicants are ac uitted. The amount of fine, if realised, be refunded to the applicants.