P. Zubaire vs Asst. Commissioner of Income Tax and Another

K.P. Balanarayana Marar, J.—The petitioner, an Income Tax assessee, seeks to quash annexure ''A-2'' complaint filed by the Assistant Commissioner of Income Tax, Circle-I, Cannanore. The complaint was filed u/s 277 of the Income Tax Act, 1961.

The petitioner had submitted a return of income for the assessment year 1990-91, showing a loss of Rs. 2,81,565. During the assessment proceedings, the Assessing Officer found that there were cash credits in the names of certain persons to the total extent of Rs. 80,000 and the petitioner was asked to prove the genuineness of the cash credits. Since the petitioner failed to prove the genuineness of the cash credits, the Assessing Officer treated the above credits amounting to Rs. 80,000 as income from undisclosed sources. The assessment for the year 1990-91 was completed. Penalty proceedings were also initiated u/s 271(1)(c) on the ground that the petitioner had concealed particulars of income. The Assistant Commissioner of Income Tax, the first respondent, levied penalty of Rs. 22,600. That order was set aside by the Appellate Tribunal by annexure "A-1" order and the matter was sent back to the income tax Officer for fresh disposal on the basis of the evidence produced by the assessee.

In the meantime, the Income Tax Officer, Cannonore, instituted criminal prosecution against the petitioner as C. C. No. 18 of 1994 before the Court of the Additional Chief Judicial Magistrate (Economic Offences), Ernakulam, for offences punishable under Sections 270C and 277 of the Income Tax Act. No notice has so far been received by the petitioner, but he understands that a warrant had been issued. This criminal miscellaneous case has been filed in the above circumstances seeking an order to quash annexure "A-2" complaint.

Heard counsel for the petitioner.

The contention of learned counsel for the petitioner is that the order of penalty having been set aside, the case before the Additional Chief Judicial Magistrate is unsustainable. This contention will not lie in the face of Section 276C of the Income Tax Act. That section states that if a person wilfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under the Act, he shall, without prejudice to any penalty that may be imposable on him, be punishable with imprisonment as provided therein. It is not stated anywhere in the petition that the assessment order has been set aside. By annexure "A-1" order what has been set aside is only the order directing payment of penalty. That will not enable the petitioner to contend that the petitioner cannot be punished for wilful attempt to evade any tax.

The criminal miscellaneous case is, therefore, misconceived and is hereby dismissed.