A. Ramamurthi, J.
1. The accused in C. C. No. 44 of 1992 on the file of the Additional Chief Metropolitan Magistrate (EOII), Chennai, have preferred the revision aggrieved against the orders passed in M. P. No. 166 of 1997 dated December 22, 1998.
2. The case in brief is as follows :
On March 25, 1992, the respondent filed a complaint against the petitioners for the offence under Sections 276C(1) and 277 read with Section 278B of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), for the assessment year 1982-83 and under Sections 120B, 193, 196, 420 and 511 of the Indian Penal Code, 1860, alleging that subsequent to the search on December 17, 1983, and pursuant to the notice under Section 148 of the Act for the said year on July 21, 1986, and later a revised return on October 28, 1987. In the course of the assessment proceedings, it was conceded the royalty of Rs. 60,000 received by the firm for exploitation of the rights of the two pictures was not disclosed and was assessable as its income and on October 28, 1987, the assessment was completed levying the tax of Rs. 33,360 for the said year. On March 30, 1989, a penalty of Rs. 60,000 was also imposed on the first petitioner. The Commissioner of Income-tax (Appeals) also confirmed the order of penalty on August 3, 1990. The petitioner firm preferred an appeal to the Commissioner of Income-tax under Section 273A(4) of the Act and in the order dated March 23, 1994, the Commissioner of Income-tax, waived the penalties imposed on the firm for all the four years, i.e. 1982-86, under the provisions of the said Act. Hence, the petitioners cannot be proceeded against for the offence under Sections 276C and 277 of the Act in view of the mandatory provisions of Section 279(1A) of the Act.
3. The respondent opposed the application and the learned judge after hearing, dismissed the application and aggrieved against this, the present revision has been filed.
4. Heard learned counsel for the parties.
5. The point that arises for consideration is whether the order passed by the court below is proper and correct
Point : It is not in dispute that the respondent filed a complaint against the accused for the offence under Sections 120B, 193, 196, 420 and 511 of the Indian Penal Code, 1860, and also for the offences under Sections 276C(1), 277 and 278B of the Act relating to the assessment year 1982-83. The prosecution admittedly examined six witnesses and marked 28 documents to make out a prima facie case against the accused for framing charges. The case was posted for examination of the accused under Section 313 of the Criminal Procedure Code, and only at that point of time, the petitioners filed the application under Section 245 of the Criminal Procedure Code for discharge.
6. Learned counsel for the revision petitioner contended that the court below totally misconceived the provisions of Section 273A(1)(b) of the Act. After the waiver of penalty, the criminal court has absolutely no jurisdiction to go into the matter. Whether Section 273A applies to a case in which the assessees disclosed the income voluntarily or that the Department found out the escaped assessment are not relevant to consider applicationunder Section 245 of the Criminal Procedure Code. Once the order has been passed under Section 273A(4), the provisions of Section 279(1A) are attracted and all further proceedings have to be stopped. This court had also occasion to consider a petition in Crl. O. P. No. 3172 of 1998 and the proceedings were quashed. The court below has not considered the order. The application filed by the petitioners ought to have been allowed.
7. The court below had extracted the evidence of PWs 1 to 6, who are officials working in the Income-tax Department in order to establish that there is a prima facie case. It is admitted that during December, 1983, there was a search in the premises of the first accused firm, which resulted in seizure of several documents. After going through the documents, it was found out that the accused had escaped in assessment of a sum of Rs. 60,000 and therefore, notice under Section 148 of the Act was issued under exhibit P-4 and it was received under exhibit P-5. However, the accused did not file the return within 30 days from the notice and hence on July 10, 1987, another notice was issued directing the accused to produce the books of account. The accused sought time till July 21, 1986. The firm filed the return with a covering letter and the return is marked as exhibit P-7. The second accused had signed the return. It is not in dispute that the first accused firm also filed a revised return signed by the third accused along with a letter dated October 26, 1987. The revised return includes the amount received under two agreements, namely, Rs. 58,850. The revised assessment order has been passed and penalty proceedings were also initiated against the accused and summons was also issued to appear before PW-3. The statement given by her is marked as exhibit P-21. An order of penalty has been passed imposing a penalty of Rs. 60,000 upon the first accused firm and the order is exhibit P-23 ; PW-4, who was the Assistant Director, Intelligence, Madras, accompanied by another Assistant Director conducted a search of the premises of the first accused firm on December 17, 1983. This resulted in seizure of two agreements dated June 28, 1980, and February 11, 1981. The assessee should have declared this amount in their annual return filed for the assessment year 1982-83. PW-6, Assistant Director of Income-tax, submitted the file to the Commissioner of Income-tax for according sanction for prosecution. Through him the sanction accorded by the Commissioner of Income-tax was also marked as exhibit P-28 and thereafter only the complaint was filed on the basis of the sanction order.
8. It is necessary to state that now the order relied upon by the accused was passed on March 23, 1994, under Section 273A(4) of the Act. Now, the present application has been filed by the petitioners under Section 245 of the Criminal Procedure Code, 1860, only in April 1997. As adverted to, after the conclusion of the evidence of PWs 1 to 6 and after examination of the accused under Section 313 of the Criminal Procedure Code, only, thisapplication was filed. It is therefore prima facie clear that there is delay of three years from the date of the order relied on by them and also after the conclusion of the prosecution witnesses. When the prosecution case itself is coming to a close, it is pertinent to state that the present application is absolutely unnecessary and the court below ought to have disposed of the application accordingly. It is not necessary to go into the merits of the case. But, however, aggrieved against the order passed by the court below, the petitioners have come forward with the present revision petition. It is just and necessary to find out whether the order passed on March 23, 1994, by the Commissioner of Income-tax would have bearing upon the continuance of the case or not
9. It is seen from the order dated March 23, 1994, that penalty levied against the accused under Section 271(1)(c) of the Act for the years 1982-86 has been waived under the provisions of Section 273A(4) of the Act. As adverted to, there was an escaped assessment of Rs. 60,000 which was found out on the search made during December, 1983. The revised return was made by the petitioners only after the search and after finding out the escaped assessment. It is therefore evidently clear that the accused did not disclose the income voluntarily relating to the escaped assessment of Rs. 60,000. The complaint against the accused is filed not only under the provisions of the Income-tax Act, but also under the various provisions of the Indian Penal Code. It is also pertinent to point out that after getting sanction from the competent authority only, the charge-sheet was filed against these petitioners.
10. The main contention put forward by learned counsel for the revision petitioner is that in view of the orders passed under Section 273A(4) of the Act, which clearly attracts Section 279(1A)(a) of the Act and under the circumstances, there is a statutory bar for continuance of the prosecution and as such the proceedings have to be closed.
11. Learned counsel for the revision petitioner relied upon an unreported judgment of this court passed in Cr. O. P. No. 3172 of 1996, dated August 21, 1998, on the ground that in the identical case by invoking Section 279(1A) of the Act, the prosecution was closed. A perusal of the order only indicated that the accused concerned in the case was charged for the offence under the Sections of the Income-tax Act and not clubbed with any provisions of the Indian Penal Code. There is also nothing to show that the escaped assessment was noticed and thereafter only the revised return was filed in that case. Under the circumstances, the facts in the present case and the case relied upon by the petitioners are completely different and as such the decision cannot be made applicable to the case on hand.
12. Section 276C of the Act relates to wilful attempt to evade tax, etc. If a person wilfully attempts in any manner whatsoever to evade any tax,penalty or interest chargeable or imposable under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable.
13. Section 277 of the Act relates to false statement in verification. If a person makes a statement in any verification under this Act or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable.
14. Section 278B of the Act relates to offence by companies. Where an offence under this Act has been committed by a company, every person who, at the time of the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
15. Section 273A of the Act relates to power to reduce or waive penalty, etc., in certain cases. Now the order relied upon by the petitioners has been passed under Sub-section (4) of Section 273A of the Act and it reads as follows :
'Without prejuduce to the powers conferred on him by any other provision of this Act, the Commissioner may, on an application made in this behalf by an assessee, and after recording his reasons for so doing, reduce or waive the amount of any penalty payable by the assessee under this Act or stay or compound any proceeding for the recovery of any such amount, if he is satisfied.'
16. It is necessary to state that the perusal of the order dated March 23, 1994, clearly indicates that there is no reference about the prosecution already launched against the petitioners after getting permission from the competent authority. It is also seen from the order that the first accused firm was dissolved with effect from June 30, 1984. The assessee-firm has no assets at present and the erstwhile partners have also no sources of income. Apart from that the assessee-firm has paid the entire taxes on the income assessed. Based upon these facts only but without considering the sanction already granted by the authority and also the pending proceedings, the order has been passed.
17. Learned counsel for the Income-tax Department contended that simply because the order has been passed on March 23, 1994, the prosecution cannot be closed. Section 279 of the Act relates to prosecution to be at the instance of the Chief Commissioner or Commissioner. Sub-section (1A) of Section 279 of the Act has been relied on by the petitioners and it reads as follows :
'A person shall not be proceeded against for an offence under Section 276C or Section 277 in relation to the assessment for an assessment year in respect of which the penalty imposed or imposable on him under Clause(iii) of Sub-section (1) of Section 271 has been reduced or waived by an order under Section 273A.'
18. Learned counsel for the respondent also relied upon the proviso to Subsection (4) of Section 273A and contended that the order relied upon by the petitioners cannot have any bearing. The proviso reads as follows :
'Where the amount of any penalty payable under this Act or, where such application relates to more than one penalty, the aggregate amount of such penalties exceeds one hundred thousand rupees, no order reducing or waiving the amount or compounding any proceeding for its recovery under this sub-section shall be made by the Commissioner except with the previous approval of the Chief Commissioner or Director-General, as the case may be.'
19. As adverted to, after getting sanction from the competent authority to prosecute and the revised return was filed by the petitioners only after the search it cannot be said that the return was filed voluntarily and therefore by waiver of the penalty the prosecution has to be closed.
20. Learned counsel for the revision petitioner also relied on M. R. Pratap v. V. M. Muthukrishnan, ITO : [1977]110ITR655(Mad) , wherein it is observed that the protection or immunity under Section 279(1A) of the Income-tax Act, 1961, from prosecution under Section 277 of the Act in a case where the penalty imposable on the assessee under Section 271(1)(iii) has been reduced or waived under Section 271(4A) can be availed of by an assessee only in a case where the Commissioner is inclined to exercise his discretion under Section 271(4A). It cannot be contended that no criminal case can be instituted under Section 277 before the exercise of the discretionary power given under Section 271(4A) of the Act. There is no dispute about this principle.
21. Learned counsel for the Department also relied on Ajay Medical Agency v. CIT , that furnishing of full and true disclosure of particulars should be made voluntarily and in good faith by the assessee. It was evident that in the instant case, disclosure of full and true particulars had been made only after the detection of the defective returns by the Income-tax Officer. Consequently, the assessee was not entitled to the benefit of Clause (b) of Section 273A(1) of the Act.
22. Reliance is also placed on Hakam Singh v. CIT : [1980]124ITR228(All) , that the action of an assessee in filing a return after the books of account had been seized at a raid would be impelled by the compelling circumstance that the assessee was likely to be dealt with under the penal provisions of the Income-tax Act. The action of an assessee in filing a return under such a constraint cannot be said to be voluntary.
23. They also relied on G. S. R. Krishnamurthi v. M. Govindaswamy, ITO : [1992]195ITR137(Mad) , wherein it is observed that (headnote) : 'The criminal court has to give due regard to the result of any proceedingsunder the Income-tax Act having a bearing on the question in issue and, in an appropriate case, it may drop the proceedings in the light of an order passed under the Act. It does not, however, mean that the result of a proceeding under the Act would be binding on the criminal court. The criminal court has to judge the case independently on the evidence placed before it. Mere expectancies should not stand in the way of the criminal court from proceeding in the matter. The High Court cannot stop any proceedings against an assessee in a criminal court on mere expectancy . . . Section 273A prescribes certain conditions to be satisfied before the Commissioner of Income-tax can exercise his power to reduce or waive penalty. Section 279(1A) lays down that the person shall not be proceeded against for an offence under Section 277 in relation to the assessment year in respect of which the penalty imposed or imposable on him under Clause (iii) of Sub-section (1) of Section 271 has been reduced or waived by an order under Section 273A. This section cannot come into play at all, unless and until, as a matter of fact, there is a reduction or waiver of penalty by an order emanating from the authority concerned under Section 273A ... The expression 'at the instance of the Commissioner' as used in the section means 'with his sanction or on his authority'. It does not require the complaint to be filed by the Commissioner himself. Section 26 of the General Clauses Act, 1897, lays down that, where an act or omission constitutes an offence under two or more enactments, then the offender shall be liable to be prosecuted and punished under either or any of those enactments, but shall not be liable to be punished twice for the same offence.'
24. It is therefore clear from the aforesaid decisions and discussion that simply because an order has been passed by the authority waiving the penalty, the proceedings pending against the petitioner cannot be closed. Apart from that already the prosecution examined six witnesses and the order was passed in 1994 and the petition to discharge has been filed only in 1997. Under the circumstances, I am of the view that when once the court finds that there is a prima facie material to frame charges and after the examination of substantial witnesses, I am of the view that it is not necessary and proper to interfere in the finding given by the court below. Hence, the point is answered accordingly.
25. For the reasons stated above, the revision fails and is dismissed. Considering the fact that the charge-sheet was filed in 1992, the trial court is directed to expedite the trial as early as possible. Consequently, the connected Crl. M. P. No. 1613 of 1999 is also dismissed.