1979 JTR(SC) 183
1982 133 ITR 909 ; 1982 2 SCC 543 ; 1982 SCC(Tax) 150 ; 1979 KHC 1993
SUPREME COURT OF INDIA
Y.V. Chandrachud, CJI., A P Sen, V D Tulzapurkar, JJ.
UTTAM CHAND AND OTHERS, APPELLANTS
VERSUS
INCOME TAX OFFICER, CENTRAL CIRCLE, AMRITSAR, RESPONDENT.
Criminal Appeal No. 156 of 1979
decided on March 5, 1979.
Prosecution for filing false returns is not sustainable if the appellate tribunal has already found the assessee firm to be genuine and the partnership to be valid based on the material on record.
Act
Referred
:INCOME TAX ACT
: S.186, S.277
(A) Income Tax Act - Prosecution for filing false returns - Genuineness of firm - Where the appellate tribunal has recorded a finding, based on the appraisal of the entire material on record, that a person was a partner of the assessee firm and that the firm was a genuine firm, the assessee cannot be prosecuted for filing false returns. (Para 1)
Facts of the case:
The Income Tax Appellate Tribunal found that a specific individual was a partner of the assessee firm and that the firm was genuine. Despite these findings, the assessee was facing prosecution for filing false returns.
Findings of Court:
The court held that since the appellate tribunal had already concluded that the firm was genuine and the partnership was valid, there was no basis to proceed with the prosecution for filing false returns.
Issues: Whether the assessee can be prosecuted for filing false returns in light of the appellate tribunal's findings regarding the genuineness of the firm and the partnership.
Ratio Decidendi: When the appellate tribunal has established the genuineness of a firm and the validity of the partnership through an appraisal of the record, the prosecution for filing false returns on those grounds is not sustainable.
Result: Appeal allowed and prosecution quashed.
Facts of the case:
The Income Tax Appellate Tribunal found that a specific individual was a partner of the assessee firm and that the firm was genuine. Despite these findings, the assessee was facing prosecution for filing false returns.
Findings of Court:
The court held that since the appellate tribunal had already concluded that the firm was genuine and the partnership was valid, there was no basis to proceed with the prosecution for filing false returns.
Issues: Whether the assessee can be prosecuted for filing false returns in light of the appellate tribunal's findings regarding the genuineness of the firm and the partnership.
Ratio Decidendi: When the appellate tribunal has established the genuineness of a firm and the validity of the partnership through an appraisal of the record, the prosecution for filing false returns on those grounds is not sustainable.
Result: Appeal allowed and prosecution quashed.
A.Subhashini, D.S.Narula, D.V.PATEL, H.S.MARVAH, M.L.Nanda, R.S.NARULA
JUDGMENT
1. Heard counsel, special leave granted. In view of the finding recorded by the Income Tax Appellate Tribunal that it was clear on the appraisal of the entire material on the record that Shrimati Janak Rani was a partner of the assessee firm and that the firm was a genuine firm, we do not see how the assessee can be prosecuted for filing false returns. We, accordingly, allow this appeal and quash the prosecution.
2. There will be no order as to costs.