Commissioner of Income Tax, Mumbai Vs. Bhupen Champak Lal Dalal and Anr.
EmailAppeal: Special Leave Petition (Crl.) No. 2430 of 2000
(With SLP(Crl.) Nos. 2995 & 3141 of 2000)
(From the Judgment and Order dated 29.4.99 of the Bombay High Court in Crl. A.No. 613 of 1999 converted in Crl. W.P.No. 587 of 1999)
(With SLP(Crl.) Nos. 2995 & 3141 of 2000)
(From the Judgment and Order dated 29.4.99 of the Bombay High Court in Crl. A.No. 613 of 1999 converted in Crl. W.P.No. 587 of 1999)
Petitioner: Commissioner of Income Tax, Mumbai
Respondent: Bhupen Champak Lal Dalal and Anr.
Apeal: Special Leave Petition (Crl.) No. 2430 of 2000
(With SLP(Crl.) Nos. 2995 & 3141 of 2000)
(From the Judgment and Order dated 29.4.99 of the Bombay High Court in Crl. A.No. 613 of 1999 converted in Crl. W.P.No. 587 of 1999)
(With SLP(Crl.) Nos. 2995 & 3141 of 2000)
(From the Judgment and Order dated 29.4.99 of the Bombay High Court in Crl. A.No. 613 of 1999 converted in Crl. W.P.No. 587 of 1999)
Judges: S. RAJENDRA BABU & S.N. PHUKAN, JJ.
Date of Judgment: Feb 27, 2001
Appearances:
Mr. Altaf Ahmad, Additional Solicitor General, Mrs. Laxmi Aiyan-gari,Mr. Rajiv Nanda, Mr.R.N.Verma, Mr. Amit Mahajan, Mr. B.V.Balram Das and Ms.Sushma Suri, Advocates with him for the Petitioner.
Dr.Rajiv Dhawan, Senior Advocate, Mr. Vimal Chandra S.Dave, Mr. Manoj Shukla, Mr. S.S.Shinde and Mr.S.V.Deshpande, Advocates with him for the Respondents.
Head Note:
INCOME TAX
Income Tax Act, 1961
Criminal Procedure Code, 1973 – Offences and prosecution – Appeal against assessments pending before Commissioner(Appeals)/ Ap-pellate Tribunal – Initiation of criminal proceedings for offenc-es arising under the Act – Petitioner assessee seeking stay of criminal proceedings – High Court directing stay of proceedings till the disposal of the appeals of the assessee – Validity. Held, since conclusions, arrived at by the appellate authorities, have a relevance and bearing upon the conclusions to be arrived at in the criminal proceedings, the High Court was justified in granting interim stay of criminal proceedings.
Held:
The prosecution in criminal law and proceedings arising under the Act are undoubtedly independent proceedings and, therefore, there is no impediment in law for the criminal proceedings to proceed even during the pendency of the proceedings under the Act. Howev-er, a wholesome rule will have to be adopted in matters of this nature where courts have taken the view that when the conclusions arrived at by the appellate authorities have a relevance and bearing upon the conclusions to be reached in the case necessari-ly one authority will have to await the outcome of the other authority. (Para 3)
When ultimately the result to come out of the proceedings before the appellate authorities have a definite bearing on the cases alleged against the respondents, we find that the High Court is justified in granting the interim order, it did and we do not think that such an interim order calls for interference at our hands. (Para 5)
Cases Reffered:
1. G.L.Didwania & Anr. v. Income Tax Officer & Anr., (1995 (Suppl.2) SCC 724) (Para 4)
2. P.Jayappa v. S.K.Perumal, First Income-Tax Officer, Tuticorin,(1984 (Supp.) SCC 437) (Para 4)
3. Uttam Chand & Ors. v. Income Tax Officer, Central Circle, Amritsar, (1982 (2) SCC 543) (Para 4)
2. P.Jayappa v. S.K.Perumal, First Income-Tax Officer, Tuticorin,(1984 (Supp.) SCC 437) (Para 4)
3. Uttam Chand & Ors. v. Income Tax Officer, Central Circle, Amritsar, (1982 (2) SCC 543) (Para 4)
JUDGEMENT:
RAJENDRA BABU, J.
1.Twelve cases were lodged against the respondents under the Income Tax Act, 1961 (hereinafer referred to as ‘the Act’) before the Metropolitan Magistrate for offences punishable under the Act. In relation to the assessments arising under the Act, ap-peals had been preferred either before the Commissioner of Income Tax (Appeals) or the Income Tax Appellate Tribunal (hereinafter referred to as ‘the Tribunal’). On the basis that the appeals were pending, the respondents filed applications for stay of the proceedings arising before the criminal court. Several decisions were cited before the court to support the contention that the decision of the appellate authorities in the income tax proceed-ings would be relevant to the criminal prosecution instituted against the respondents. The learned Magistrate , after examining the position in law as to whether the findings of the appellate authorities are relevant for the purpose of the criminal proceed-ings and to avoid conflicting decisions of the criminal court and the appellate authorities, felt that it would be appropriate to grant an interim order of the following nature:
“ORDER
The work of recording evidence shall proceed. However, passing of order about framing of charge, discharge of the accused or ac-quittal of the accused shall be stayed during pendency of the appeals by the accused before the Income Tax Appellate Authori-ties. These orders will be passed after the appeals filed by the accused before the Income Tax Authorities are finally decided.”
2. Against that order, revision petitions were filed the sessions court. The sessions court did not interfere with the order made by the learned Magistrate and dismissed the same. Thereupon, the matter was carried further to the High Court and the High Court, while entertaining a writ petition noticing several decisions of that High Court and of this Court, issued rule in the matter and granted an interim order staying the proceedings in the criminal cases filed before the learned Magistrate. It is against this order that these special leave petitions have been filed.
3. The prosecution in criminal law and proceedings arising under the Act are undoubtedly independent proceedings and, therefore, there is no impediment in law for the criminal proceedings to proceed even during the pendency of the proceedings under the Act. However, a wholesome rule will have to be adopted in matters of this nature where courts have taken the view that when the conclusions arrived at by the appellate authorities have a rele-vance and bearing upon the conclusions to be reached in the case necessarily one authority will have to await the outcome of the other authority.
4. This Court in G.L.Didwania & Anr. v. Income Tax Officer & Anr., (1995 (Suppl.2) SCC 724) dealt with the similar situation where there is a prosecution under the Act for making a false statement that the assessee had intentionally concealed his income and the Tribunal ultimately set aside the assessment holding that there is no material to hold that such income belongs to the assessee and the petition was filed before the Magistrate to drop the criminal proceedings and thereafter, an application was filed before the High Court under Section 482 Cr.P.C. to quash those criminal proceedings. This Court held that the whole question is whether the appellant made a false statement regard-ing the income which according to the assessing authority has escaped assessment and this issue was dependent on the conclusion reached by the Appellate Tribunal and hence the prosecution could not be sustained. In Uttam Chand & Ors. v. Income Tax Officer, Central Circle, Amritsar, (1982 (2) SCC 543), this Court held that in view of the finding recorded by the Tribunal on appraisal of the entire material on the record, that the firm was a genuine firm and the assessee could not be prosecuted for filing false returns and, therefore, quashed the prosecution. In P.Jayappa v. S.K.Perumal, First Income-Tax Officer, Tuticorin,(1984 (Supp.) SCC 437), this Court observed that the pendency of the reassess-ment proceedings under the Act cannot act as a bar to the insti-tution of the criminal proceedings and postponement or adjourn-ment of a proceedings for unduly long period on the ground that another proceedings, having a bearing on the decision, was not proper.
5. In the present case, there is no claim of quashing of the proceedings. When ultimately the result to come out of the pro-ceedings before the appellate authorities have a definite bearing on the cases alleged against the respondents, we find that the High Court is justified in granting the interim order, it did and we do not think that such an interim order calls for interference at our hands. The learned Counsel on either side relied on several decisions but in the view we have taken it is unnecessary to refer to those decisions.
6. The petitions are, therefore, dismissed. No costs.
1.Twelve cases were lodged against the respondents under the Income Tax Act, 1961 (hereinafer referred to as ‘the Act’) before the Metropolitan Magistrate for offences punishable under the Act. In relation to the assessments arising under the Act, ap-peals had been preferred either before the Commissioner of Income Tax (Appeals) or the Income Tax Appellate Tribunal (hereinafter referred to as ‘the Tribunal’). On the basis that the appeals were pending, the respondents filed applications for stay of the proceedings arising before the criminal court. Several decisions were cited before the court to support the contention that the decision of the appellate authorities in the income tax proceed-ings would be relevant to the criminal prosecution instituted against the respondents. The learned Magistrate , after examining the position in law as to whether the findings of the appellate authorities are relevant for the purpose of the criminal proceed-ings and to avoid conflicting decisions of the criminal court and the appellate authorities, felt that it would be appropriate to grant an interim order of the following nature:
“ORDER
The work of recording evidence shall proceed. However, passing of order about framing of charge, discharge of the accused or ac-quittal of the accused shall be stayed during pendency of the appeals by the accused before the Income Tax Appellate Authori-ties. These orders will be passed after the appeals filed by the accused before the Income Tax Authorities are finally decided.”
2. Against that order, revision petitions were filed the sessions court. The sessions court did not interfere with the order made by the learned Magistrate and dismissed the same. Thereupon, the matter was carried further to the High Court and the High Court, while entertaining a writ petition noticing several decisions of that High Court and of this Court, issued rule in the matter and granted an interim order staying the proceedings in the criminal cases filed before the learned Magistrate. It is against this order that these special leave petitions have been filed.
3. The prosecution in criminal law and proceedings arising under the Act are undoubtedly independent proceedings and, therefore, there is no impediment in law for the criminal proceedings to proceed even during the pendency of the proceedings under the Act. However, a wholesome rule will have to be adopted in matters of this nature where courts have taken the view that when the conclusions arrived at by the appellate authorities have a rele-vance and bearing upon the conclusions to be reached in the case necessarily one authority will have to await the outcome of the other authority.
4. This Court in G.L.Didwania & Anr. v. Income Tax Officer & Anr., (1995 (Suppl.2) SCC 724) dealt with the similar situation where there is a prosecution under the Act for making a false statement that the assessee had intentionally concealed his income and the Tribunal ultimately set aside the assessment holding that there is no material to hold that such income belongs to the assessee and the petition was filed before the Magistrate to drop the criminal proceedings and thereafter, an application was filed before the High Court under Section 482 Cr.P.C. to quash those criminal proceedings. This Court held that the whole question is whether the appellant made a false statement regard-ing the income which according to the assessing authority has escaped assessment and this issue was dependent on the conclusion reached by the Appellate Tribunal and hence the prosecution could not be sustained. In Uttam Chand & Ors. v. Income Tax Officer, Central Circle, Amritsar, (1982 (2) SCC 543), this Court held that in view of the finding recorded by the Tribunal on appraisal of the entire material on the record, that the firm was a genuine firm and the assessee could not be prosecuted for filing false returns and, therefore, quashed the prosecution. In P.Jayappa v. S.K.Perumal, First Income-Tax Officer, Tuticorin,(1984 (Supp.) SCC 437), this Court observed that the pendency of the reassess-ment proceedings under the Act cannot act as a bar to the insti-tution of the criminal proceedings and postponement or adjourn-ment of a proceedings for unduly long period on the ground that another proceedings, having a bearing on the decision, was not proper.
5. In the present case, there is no claim of quashing of the proceedings. When ultimately the result to come out of the pro-ceedings before the appellate authorities have a definite bearing on the cases alleged against the respondents, we find that the High Court is justified in granting the interim order, it did and we do not think that such an interim order calls for interference at our hands. The learned Counsel on either side relied on several decisions but in the view we have taken it is unnecessary to refer to those decisions.
6. The petitions are, therefore, dismissed. No costs.
