Bhupen Champaklal Dalal Vs. Sandeep Kapoor and anr. - Court Judgment

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counsels: o. p. soni for the assessee d.t palekar for revenue no. 1 smt. usha kejarwal, a.p.p. for the state in the bombay high court p.s. patankar j. - bombay stamp act, 1958. schedule 1, article 36: [y.r. meena, cj & d.a. mehta & a.s. dave, jj] deed of mortgage liability to pay stamp duty held, any instruments in respect of transactions, relating to loans and advances, loans and mortgages, cash credit or overdraft bonds, agreements of pawn or pledge and letters of hypothecation executed by farmers for agricultural and land development purposes in favour of all commercial bank etc. are entitled to remission of entire duty chargeable under the stamp act with effect on and from 1.4.1979 under government notification dated 23.3.1979. thus, where loan was granted by bank of india under agricultural finance scheme towards purchase of air compressors, drilling rods and other accessories. use of the air compressors, drilling rods and other accessories in case of applicant who is a farmer can only be for purpose of drilling a bore-well for purpose of irrigation in process of carrying on agricultural activities. thus, it is apparent that loan was availed of by applicant-farmer for agricultural and land development purposes because a bore-well would go to increase the utility of agricultural land by ensuring round the year irrigation. the instrument in question would therefore fall within scope of complete remission granted to instrument of mortgage under government notification dated 23.3.1979 and hence not liable to stamp duty under article 36 of schedule i of the act. p.s. patankar j.leave to amend.the prosecution is launched against these applicants under sections 276c(1)(i), 277 and 278b of the income tax act, 1961. this is for wilful evasion of tax and making false statements in the verification knowingly. this was done as a director of the company and by the company. in criminal application no. 610 of 1999, prosecution is also launched under section 35b of the wealth tax act, 1957, in addition.the reassessment orders which are passed in these matters are challenged before the income tax appellate tribunal, etc. those appeals are pending. the question that arises is whether during the pendency of these appeals the prosecutions in the present cases should proceed or not. the learned additional c.m.m., mumbai, has directed to proceed regarding recording of evidence. this is confirmed by the learned additional sessions judge. greater mumbai, by order dated 12-10-1998.i find that at least four learned single judges of this court have taken the view that the criminal proceedings should be stayed, i.e., criminal revisional application no. 251 of 1985, with criminal revisional application no. 252 of 1985, dated 27-5-1986, judgment reported in mohanlal mahabir prasad (firm) v. cit (1991) mh lj 984 (bom) and vinodkumar bajranglal choudhary v. asst. cit (1996) crl lj 449. learned counsel for the petitioner has also cited the judgment reported in g.l. didwania v. income tax officer : [1997]224itr687(sc) . but it relates to quashing of the criminal proceedings in view of the income tax appellate tribunal taking the view that there was no false statement made regarding the income of the assessee and there was no escaped assessment.learned counsel appearing for the respondent have cited the judgment of the learned single judge of the punjab and haryana high court reported in telu ram raunqi ram v. income tax officer . it was a case where penalty was imposed on the assessee. the appeal filed by him was dismissed. the assessee obtained a reference to the high court which was pending. it was held that expectancy of favourable finding in reference is no ground to stay criminal proceedings. another judgment of the supreme court is cited, viz., p. jayappan v. s. k perumal, first income tax officer : [1984]149itr696(sc) . it was dealing with initiation of the criminal proceedings under sections 276c and 277 of the income tax act read with sections 193 and 196 of the indian penal code. the apex court held that even through reassessment proceedings are pending, the department is free to institute criminal proceedings. this cannot be attracted in the present case as the question is not of initiation.further judicial notice can be taken of the fact that the courts of the metropolitan magistrates are flooded with work.in view of this, i pass the following order.rule.interim order in terms of prayer (c).amendment to be carried out within one week.however it is made clear that in case the appeals filed by the petitioners are dismissed, the criminal prosecutions to proceed. further liberty to the respondents to move the appellate income tax authority to hear the appeals as early as possible and expeditiously. .liberty to mention after the appeals are decided. the respondent's advocate prays for stay of this order.stay refused.certified copy expedited.