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Criminal Miscellaneous Application No. 736 of 1973, decided on 29thOctober 1974.
‑‑‑ S. 561‑A read with Income Tax Act (XI of 1922), Ss. 51(2) & 52(a)‑Quashment of proceedings‑--Concealment of income---Income‑tax Officer finding conscious concealment of income filing criminal complaint against petitioners‑Petitioners preferring appeals against assessment orders of Income‑tax Officer‑Appellate Tribunal accepting contention of petitioners that "in the absence of the accounts book, the matter had become doubtful and therefore the assessment could rightly be re‑opened" remanding case for retrial‑Prosecution of petitioners in circumstances, held, not warranted by yaw‑Proceedings quashed‑Income‑tax Officer, held, may file fresh complaint if any offence made out.
G. M. Shah for Applicant.
A. R. Kazi for the State.
Date of hearing: 29th October 1974.
The circumstances in which these petitions, which will be disposed of by a common judgment, have arisen are as follows:‑
The applicants are partners in business, running a restaurant known as 'Hijaz Restaurant' at Khadda, in the city of Karachi. They filed the returns of the income‑tax of their firm for the years 1965‑66 to 1971‑72, which was signed and verified by the applicant No. 1. It appears that the assessees did not disclose the income of a pan shop for which they were getting Rs. 80 per month. Notices were issued to them under section 34 of the Income‑tax Act, and they filed revised returns mentioning therein, the shop and its income, which were not disclosed earlier. The learned Income‑tax Officer thereupon found that that a conscious concealment of income was involved which warranted prosecution, under sections 51(2) and 52 (a) of the Income‑tax Act respectively. He therefore obtained the A approval of the Central Board of Revenue under section 53(1) of the Income Tax Act, and filed the complaint in the Court of the Special Judge, Central, Karachi.
2. The applicants filed an application for their discharge under section 253(2) of the Cr. P. C., which came to be dismissed on 1‑9‑1972. In this very context it might be mentioned that the applicants had preferred appeals against the assessment orders of the Income‑tax Officer, and the Income‑tax Appellate Tribunal by its order dated 26‑6-1974, allowed the appeals and remanded the case for a fresh decision by the Income‑tax Officer.
3. The stand adopted by the applicants before the Income‑tax Appel late Tribunal, was that the income from the pan shop was already included in the profits disclosed, and therefore the revised addition in that regard, was deleted by them. It was found by the Income‑tax Appellate Tribunal that "in the absence of the accounts book, the matter had become doubtful and therefore the assessment could rightly be re‑opened", and it has been e so done.
4. The position therefore is that the superior authority of the Depart ment itself could not say for certain, in the absence of the proper book of accounts, whether any conscious or deliberate falsehood on the part of the applicants was involved, and whether the rent of pan shop to the extent of Rs. 80 per month had really been supressed. The order of the Income -tax Appellate Tribunal, which is the latest in the field, supersedes the order of the Income‑tax Officer, in which deliberate concealment of the income on the part of the applicants had been found. In this view of the matter, the prosecution of the applicants is not warranted in law.
5. In the result, I will quash the proceedings and allow the petition. It will, however, be open to the Income‑tax Authorities to file a fresh com plaint, if later on it is found that the Income‑tax returns filed by the applicants were false to their knowledge.
Petition accepted.
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