A Single Bench of Allahabad High Court has recently held that criminal proceedings arising out of orders of penalty will be quashed as soon as the penalty demand is quashed.
The present application was filed on the basis that orders of penalty passed against the applicant under Sections 271(1)(a), 271(1)(c) and 273(b) of Income Tax Act, 1961 for late filing of return for Assessment Year 1983-84 were challenged and canceled but the criminal proceedings remained in existence.
The bench of Justice Saurabh Shyam Shamshery observed that the applicant has not procured a certified copy of said order and since it was not placed before Trial Court, criminal proceedings continued against applicant. In these circumstances, the applicant approached the Allahabad High Court in the year 2015 by way of filing a present application.
Hemant Kumar,Kamal Krishna and Prakhar Saran Srivastava appeared for the applicant.
The applicant counsel placed reliance on a judgment passed by the Supreme Court in K.C. Builders and anothers vs. Assistant Commissioner of Income Tax wherein it was held that, once the penalties are canceled on the ground that there is no concealment, the quashing of prosecution under Section 276C is automatic.
The Standing Counsel for the Income Tax Department, Praveen Kumar had not disputed the facts except that in earlier application criminal proceedings were quashed, due to want of knowledge.
The single bench observed that the issue is covered in detail by the decision in K.C. Builders and allowed the application, quashing the criminal proceedings.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
