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2007] 291 ITR 430 [2007] 163 Taxman 131 (Bombay) HIGH COURT OF BOMBAY Indian Plywood Mfg. Co. Ltd. v. P.S. Dave V.M. KANADE, J. CRI. APPEAL NOS. 43 AND 44 OF 2000 MARCH 14, 2006 Section 279, read with sections 271 and 273A of the Income-tax Act, 1961 - Offences and prosecution - Prosecution to Be At Instance of Commissioner - Assessment year 1992-93 - Whether where penalty imposed on assessee under section 271(1)(c) was set aside by Commissioner (Appeals) holding that no case for concealment of income was made out, having regard to provisions of section 279(1A), criminal proceedings initiated against assessee under sections 276C and 277, still pending before Metropolitan Magistrate were also liable to be quashed - Held, yes CASE REVIEW K.C. Builders v. Asstt. CIT [2004] 265 ITR 562 (SC)/[2004] 2 SCC 731followed & relied upon. CASES REFERRED TO K.C. Builders v. Asstt. CIT [2004] 2 SCC 731/ 135 Taxman 461 (SC) [Para 5]. N.K. Thakore and Prakash Naik for the Applicant. H.V. Mehta for the Respondent.R.Y. Mirza for the State. JUDGMENT 1. Both these Criminal Applications can be disposed of by common since the issue involved in both these matters are identical. 2. The applicants in Criminal Application No. 43 of 2000 filed Income-tax return for the assessment year 1992-93 on 13-9-1992. The order was passed under section 193D/8-3-1995 by the Inspecting Assistant Commissioner, Assessment Range V(B) whereby total income was assessed at Rs. 1,29,74,262 including an amount of Rs. 27,17,994 which was the amount of refund of excise duty received in the year 1981. The addition made by the Inspecting Assistant Commissioner was upheld in the appeal. The application made by the applicants for change in the accounting period was allowed. 3. It was alleged that the excise duty was not credited to its profit and loss account and this was done to avoid Income-tax. Accordingly, penalty proceedings were initiated under section 271(1)(c) of the Income-tax Act and on 27-3-1987, the order was passed imposing penalty to the tune of Rs. 89,08,882. Finally, the Commissioner of Income-tax by order D/28-3-1990 set aside the penalty which was imposed. 4. Simultaneously, after the penalty…

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