Law:

Section:

Once penalties under section 271(1)(c) of the Income-tax Act are cancelled, quashing of prosecution under section 276C is automatic Section 271(1)(c), read with section 276C, of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment years 1983-84 to 1986-87 - Whether where an order of assessment or reassessment on basis of which penalty has been levied on assessee has itself been finally set aside or cancelled by Tribunal or otherwise, penalty cannot stand by itself and same is liable to be cancelled - Held, yes - Whether levy of penalties under section 271(1)(c) and prosecution under section 276C are simultaneous and, therefore, once penalties are cancelled on ground that there is no concealment, quashing of prosecution under section 276C is automatic - Held, yes Section 420 of the Indian Penal Code, 1860 - Offences against property - Cheating and dishonestly inducing delivery of property - Whether in absence of dishonest and fraudulent intention, question of committing offence under section 420 does not arise - Held, yes FACTS The respondent/assessing authority treated the difference between the income as per original return and revised return, filed subsequently by the assessee, as concealed income and levied penalties under section 271(1)(c) for relevant assessment years. On appeal, the Commissioner (Appeals) confirmed the order of the Assistant Commissioner. As per the direction of the Chief Commissioner, complaints were also filed for offence under sections 276C(2), 278B and sections 120B, 34, 193, 196 and 420 of the Indian Penal Code. On further appeal, the Tribunal found that the additions were on the basis of settlements between the assessee and the department and represented voluntary offer made by the assessee and, therefore, in such circumstances, there was no concealment of income by the assessee and accordingly, the penalties were cancelled. The assessee thereupon moved an application before the Additional Chief Metropolitan Magistrate praying that in view of the Tribunal's decision the criminal proceedings be adjourned against it. The Magistrate, however, permitted the assessee to mark the order of the Tribunal in evidence at…

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