Law: Income Tax Act, 1922

Section: 51,51(2),52,52A,53A

[Income Tax Act, 1922 (XI of 1922)]........Sections 51(2), 52, 52A, 53A, Prosecution-Concealment of Income-False return-Criminal case filed in the court of Special Judge for concealment of income and submission of false return--Appellate Tribunal setting aside assessment order, which was basis of the complaint, holding that the conclusion of Income Tax Officer was based on surmises and conjectures-Criminal proceedings whether liable to be quashed--Held yes. Cases relied on:- Zafar Ahmad Khan v. State (1975) Pak. Cr. L. J. 1300 ; Mohammad Hussain v. State (1976) 33 Taxation 57 (Kar) and Shaikh Fazal Illahi V, Assistant Income Tax Officer, Karachi (1977) Pak. Cr. L. J. 538. JUDGMENT Z. A. CHANNA, J.--This application under Section 561-A, Cr. P. C. read with Section 439, Cr. P. C. seeks to impugn the proceedings being taken against the two applicants in the Court of the Special Judge (Customs & Taxation), Karachi on a complaint filed against them by the income Tax Officer (Inves.) Circle IV, Karachi, under Sections 51(2), 52 and 52-A of the Income Tax Act, 1922. This complaint has been Bled on the basis of two orders passed on 20-1-1975 by the Commissioner of Income Tax (Inves.) Karachi, one in respect of each of the applicants, according approval under Section 53(1) of the Income Tax Act, fog their prosecution on the ground that they had filed false returns and concealed particulars of income of M/s. Mohammad Amin Mohammed Bashir, Limited, for the assessment year 1971-72. The Commissioner of Income Tax had also passed on 20-1-75 similar orders according approval to the prosecution of the 3rd, 4th and 5th respondents. 2. The complaint against the two applicants specifically refers to 3 items in the returns filed by them which are considered to be false. The first is in respect of an amount of Rs. 6,64,188 which amount was claimed by the Company, of which the two applicants are Directors, to be a business loss paid by the Company, to the firm of M/s. Pak. Cotton Company on account of cotton difference settlement against the business of future settlement transactions, popularly known as Cotton Satta. According to the complaint, this was bogus loss and claim and…

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