m/s. konark refrigeration industries pvt.ltd., vs. Dy. Commissioner of Income Tax
What did the High Court hold?
The High Court held that while criminal proceedings can continue against the petitioners before the Court below, the Court shall not pronounce the judgment until the proceedings before the appellate authority are concluded. This decision was made in light of the precedent set by the High Court in Crl.P. No. 5964 of 2018, which, though not agreed with by the revenue, was not appealed to the Supreme Court. The ratio decidendi is that the finality of the assessment proceedings should be awaited before pronouncing judgment in related criminal proceedings, to avoid conflicting outcomes. The criminal petition was disposed of with this observation, and no costs were imposed. Any pending miscellaneous applications were also closed.
What were the facts?
The petitioners, M/s. VXL Industries Pvt Ltd and its Directors, filed a criminal petition under Section 482 of the Cr.P.C. seeking to quash proceedings in C.C. No. 201 of 2016. These proceedings were initiated by the Deputy Commissioner of Income Tax, Income Tax Circle-2(1), Hyderabad, for alleged offences under Sections 276C(2) and 278B of the Income Tax Act, 1961. The complaint was based on an assessment order dated 18.11.2014 for the Assessment Year 2013-14. The assessment order was challenged by the petitioner before the Appellate Authority. The criminal petition was filed to quash these proceedings.
What were the issues?
1. Whether criminal proceedings under Sections 276C(2) and 278B of the Income Tax Act, 1961, can be initiated when an appeal against the assessment order is pending before the Appellate Authority? (Question of law and fact, concerning Section 276C(2) and 278B of the Income Tax Act, 1961). Assessee's Contention: The learned counsel for the petitioners argued that once an appeal is pending before the Appellate Authority, criminal proceedings cannot be initiated. They relied on the order of the High Court in Crl.P. No. 5964 of 2018. Revenue's Contention: The learned Standing Counsel for the Income Tax Department did not agree with the proposition laid down in Crl.P. No. 5964 of 2018. However, they admitted that the order passed in Crl.P. No. 5964 of 2018 was not appealed before the Hon'ble Supreme Court.
Which sections of the Income-tax Act were involved?
Section 276C(2),Section 278B,Section 190,Section 200
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
The Court made the following: ORDER i
7 THE HOl CRJ ItoVRABLD,SRI JUSTICE K.SURENDER luutal PETrrroN Ito.1259 of 2Ol8 minal Petition is filed under Section 482 of Cr.P.C ORDER: This Cri ti.l by the peti ers/accused Nos.1, 2 and 3 to quash the proceedings i C.C.No.2O t of 2016, pending on the file of the Special Judge r Economic Offences, Hyderabad 2 Sri rd arned counsel for the petitioners/accused Nos.1 to 3 and Krishna, learned Standing Counsel for T respondent. Pe sed the record J The co plainant/Deputy Commissioner of Income Tax filed a complalnt under Section 190 read with Section 200 Cr.P.C., allegi commission of offences under Sections 27 6C(21 and 278 B of e Income Tax Act, 1961, basing on the original J dated 18.11.2O 4 4 The c plainant passed an Assessment Order for the said Assessme t Year, which was questioned b "l J ,T Hea I return of inco e pertaining to the Assessment Year 2Ol3-L4 Murali I I "l J "I I I Irl y the petitioner before the Appe te Authority. J The le ned counsel for the petitioners would submit 1," 5 that once the t,peal is pending before the Appellate Authority,
2 the criminal p roceedings cannot be initiat d arned counsel : relied on the order of this Court in Crl.P.No.596 f 20tB 6 Learnecl standing counsel t for ith Income Tax q I Department does not agree with the proposition laid down in Crl.P.No.5964 ol 20IB, however, admits that the order passed by this Court in Crl.P.No.5964 of 2018 was not appealed before the Hon'ble Suprenre Court I Accordir-rgly, the criminal proceedings can go on against 7 the petitioners before the Court below, but the Court shall not pronounce the judgment, until the p appellate authoritv are conduded. roceedin mlna gs before the I petition 1S B With the said observation, the cri disposed off. No costs. Miscellaneous applications, if any stand ciosed nenfins, shall also //II 1 The Special Judge for Economic Offences at Hyderabad 2 One CC to Sri Ch Pushyam Kiran, Advocate [OpUC]
One CC to R. hllurali Krishna, Standing Counsel tOpUCl 4. fwo CD Copies (r K. AMMAJI AS IS ANT REGISTRAR ECTION OFFICER To, Lam
HIGH COURT DATED:31 10112025 ORDER CRLP.No.1259 of 2018 DISPOSING OF THE CRIMINAL PETITION (t t )- s ra H { I 2 J o il6 gO fl A !l }) * t S ,L / b 1g D,
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