Upasana Hospital and Nursing Home and Another vs Income Tax Officer

P.V. Narayanan Nambiar, J.—The prayer in these criminal miscellaneous cases is to quash the complaint, C. C. Nos. 58 of 1988, 57 of 1988 and 59 of 1988, respectively, on the file of the Additional Chief Judicial Magistrate (Economic Offences)''s Court, Ernakulam. These cases are referred to the Division Bench on the basis of the order of reference passed by Dhinakar J. in order to settle the apparent conflict between the decisions in Premier Breweries Ltd. and Others Vs. Deputy Commissioner of Income Tax and Another, and VANAJA TEXTILES LTD. AND OTHERS Vs. INSPECTING ASSISTANT COMMISSIONER OF Income Tax., .

The prosecution is launched by the respondent, the Income Tax Officer, B-Ward, Trivandrum, against the common petitioners alleging that they have committed offences under Sections 276C(1), 277, 276CC read with Section 276B of the Income Tax Act, 1961. According to the prosecution, the assessee, who is the first petitioner, has concealed its income and Income Tax returns were not filed within the time. It is also alleged that the petitioners have attempted to evade payment of Income Tax on the basis of the false particulars furnished in the returns.

It is submitted by counsel for the petitioners that the order of assessment was challenged before the Commissioner of Income Tax (Appeals), Trivandrum, who gave some marginal reduction to the assessee in the quantum of assessment. The order imposing penalty was taken up in appeal and the appellate authority has held that there is no concealment at all and there is no case for levy of penalty u/s 271(1)(c) of the Income Tax Act, 1961. So, the penalties have been cancelled and annexure-B is the order of the Commissioner of Income Tax (Appeals).

Regarding the delay in filing the returns, it is submitted that the appellate authority, as per annexure-C, has cancelled the penalty in its entirety.

Relying on annexures-B, C and D, it was very vehemently contended before us that the very foundation of the prosecution case has disappeared in view of the subsequent orders of the appellate authority and the continuance of the prosecution is an abuse of the process of the court. Reliance was also placed on a series of decisions of the Supreme Court and also various High Courts. It is argued before us that when the chance of success of the prosecution is very bleak, judicial time should not be allowed to be wasted on meaningless litigation. The basis of the prosecution is totally nullified in view of the appellate orders, argues counsel.

We are not impressed with the arguments. Each case will have to be decided on the facts of the case. Generally, it cannot be said that the prosecution will not be maintainable and the same is to be quashed the moment the appellate authority cancels the order imposing penalty. Every case will have to be considered separately and a decision will have to be taken according to the facts of each case.

In these applications, which are filed u/s 482 of the Code of Criminal Procedure, we are not inclined to consider each case on its merits. It is for the petitioners to move the trial court for the appropriate orders regarding the continuance or otherwise of the criminal proceedings pending against them. Liberty is granted to them to raise all their contentions before the trial court. They may even file an application before the trial court inviting a decision on the points raised by them. The decision in K.M. Mathew v. State of Kerala [1992] 1 KLT 1 can also be pressed into service by the petitioners if they want a consideration of the points raised by them for dropping the criminal proceedings. If the petitioners file application with a prayer for their discharge on the various grounds mentioned by them in the criminal miscellaneous cases, the trial court will consider the same and pass orders thereon as expeditiously as possible, at any rate, within two months from the date of filing such application. The trial court may not proceed further in the complaints without taking a decision on the application to be filed by the petitioners for the above purpose.

The criminal miscellaneous cases are disposed of as above.