BHUPEN CHAMPAKLAL DALAL vs. SANDEEP KAPOOR & ANR.
HIGH COURT OF BOMBAY
P.S. Patankar, J. Crl. A. No. 613 of 1999 converted into Crl. Writ Petn. No. 587 of 1999 29th April, 1999 (2001)
167 CTR (Bom) 281 : (2001) 248 ITR 827 (Bom) : (2001) 118 TAXMAN 258 (Bom)
Sections 276C, 277, 278B,
Asst. year –
Decision in favour of Assessee
O.P. Soni, for the Petitioner : D.T. Palekar, for the Respondent : Smt. Usha Kejarwal, for the State Note
This judgment of the High Court stands affirmed by the Supreme Court in CIT vs. Bhupen Champaklal Dalal &
Anr. (2001) 167 CTR (SC) 283
P.S. PATANKAR, J. :
Leave to amend. The prosecution is launched against these applicants under ss. 276C(1)(i), 277 and 278B of the
IT 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 Crl. Appln. No. 610 of 1999, prosecution is also
launched under s. 35B of the WT Act, 1957, in addition. The reassessment orders which are passed in these
matters are challenged before the 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
Addl. C.M.M. Mumbai, has directed to proceed regarding recording of evidence. This is confirmed by the learned
Addl. Sessions Judge. Greater Mumbai, by order, dt. 12th Oct., 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 Appln.
No. 251 of 1985, with Crl. Revisional Applin. No. 252 of 1985, dt. 27th June, 1986, judgment reported in
Mohanlal Mahabir Prasad (Firm) vs. CIT (1991) Mh LJ 984 (Bom) and Vinodkumar Bajranglal Choudhary vs.
Asstt. CIT (1994) Tax LR 488 (Bom) : (1996) Crl. LJ 449. Learned counsel for the petitioner has also cited the
judgment reported in G.L. Didwania vs. ITO (1997) 140 CTR (SC) 273 : (1997) 224 ITR 687 (SC) : TCS48.3888.
But it relates to quashing of the criminal proceedings in view of the 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 in Telu Ram Raunqi Ram vs. ITO (1984) 39 CTR (P&H) 93 : (1984) 145 ITR 111
(P&H) : TC 48R.509. 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 vs. S.K. Perumal, ITO (1984) 42 CTR (SC) 180 : (1984) 149 ITR 696 (SC) : TC
48R.501. It was dealing with initiation of the criminal proceedings under ss. 276C and 277 of the IT Act r/w ss.
193 and 196 of the IPC. The apex Court held that even though 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 judgment 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