Law: Income Tax Act, 1922

Section:

Income-tax----Offence---Prosecution---Appeal pending against addition to income and levy of penalty---No bar to criminal proceedings. The Income-tax Officer added certain amounts as unexplained income of the assessee which was partly allowed by the Commissioner of Income-tax (Appeals). The assessee filed a further appeal to the Tribunal which was pending. On the basis of the additions made by the Income Tax Officer, penalty was levied and on appeal the Commissioner of Income-tax (Appeals) reduced the penalty. The assessee filed a second appeal which was pending before the Tribunal. A complaint was filed against the assessee in the Court of the Special Magistrate. In an application field under section 482, Criminal Procedure Code, the assessee contended that during the pendency of appeals under the Income-tax Act, criminal prosecution could not be launched and if the Department had filed the complaint, proceedings in the complaint case should be stayed till the appeal was decided by the Tribunal: Held, that the prosecution could not be quashed or stayed simply because the appeal was pending before the Tribunal. Jayappan (P.) v. S.K. Perumal, First ITO (1984) 149 ITR 696 (SC) and Ananda Fabrics v. Asst. CIT (1990) 185 ITR 412 (Mad.) fol. JUDGMENT The brief facts of Case No.4730 of 1994 are that the petitioner field its return of income in the year 1987-88. While passing the assessment order, the Income-tax Officer added Rs.74,000 and Rs.69,300 as unexplained income. The assessee filed an appeal before the Commissioner of Income-tax who allowed it partly. Being dissatisfied the assessee-applicant filed an appeal before the Income-tax Appellate Tribunal, Allahabad, where it is pending. On the basis of the additions made by the Income-tax Officer, penalty proceedings have been initiated and an appeal has been field against the same. The penalty has been reduced from Rs.40,000 to Rs.26,000 by the Commissioner of Income-tax and an appeal is pending before the Income-tax Appellate Tribunal. Under these circumstances, a complaint has been field by respondent No.2 against the petitioner in the Court of the Special C.J.M., Allahabad. The facts in Case No.4712 of 1994 are…

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