New National Stores and Others vs State of Bihar and Others

B. N. Agrawal, J.—Heard the parties.

This application has been filed for quashing prosecution of the peti tioners u/s 276C of the Income Tax Act, 1961.

It appears that for addition of a sum of Rs. 50,000 in the order of assessment the prosecution has been launched against the petitioners. Today, a supplementary affidavit has been filed on behalf of the petitioners, in which it has been stated that for the same very addition a penalty proceeding was initiated and penalty was imposed, but on appeal being preferred before the Tribunal, the penalty has been cancelled on merits. It is well settled that the standard of proof in penalty proceedings is lighter than in criminal proceeding and since penalty has been cancelled on the merits, in my view, in the ends of justice, prosecution of the petitioners should be quashed.

Accordingly, the application is allowed and prosecution of the petitioners is hereby quashed.