Prosecution based on same cause of action and facts cannot continue after the penalty proceedings have been quashed by the Tribunal.

( 1 ) A very short and interesting point has been raised in this petition; whether crininal proceedings to continue in spite of quashing of the order of penalty by the final authority under the Income Tax Act i. e. Income Tax Appellate Tribunal (hereinafter called the Tbunal) ?

( 2 ) PETITIONERS M/s Harprashad Company Limited and Ols. (hereinafter called appellant company) filed its return declaring loss of Rs. 4,48,578. 00. The Assessing Officer while processing the return noticed that one of the items of expenditure representing payment of commission to Smt. Ritu Nanda was not justified and, therefore, asked the explanation. Statement of Smt. Ritu Nanda was recorded by the Income Tax Officer (Circle) Circle-1 on 20th March, 1982 wherein she testified that she procured the contract for the appellant company as she had been visiting Iran frequently and was known to M/s Essar and Company in Iran. She was the Director of the appellant company but resigned in 1977. She had set up her own marketing consultancy service as a proprietary concern. She charged commission at the rate of 3% for procuring the contract. Out of this 3% she paid 1% to M/s Jupiter Trading Corporation because the said M/s Jupiter Trading Corporation helped her in procuring the contract in Iran. She also obtained contract for appellant company from the Indian Railway Authority with the help of M/s Essar and Co. The assessing Officer in spite of this information disallowed the entire commission amounting to Rs. 2,74,617. 00. He held it to be of non - business purpose, the appellant company preferred appeal. The Commissioner of Income Tax (Appeal), (In short CIT, Appeal) allowed deduction of 1% commission paid by Smt. Ritu Nanda to M/s Jupiter Trading Corporation. Against this order both the parties i. e. assessee as well as the revenue authority filed appeal before the Tribunal. Order of the CIT (Appeal) was upheld by the Tribunal thereby allowed the deduction of 1% commission paid by Ritu Nanda to M/s Jupiter Trading Corporation.

( 3 ) AFTER this order was passed by the Tribunal, the respondent filed a criminal complaint against the appellant company beside imposing penalty of Rs. l,85,730. 00. The basis of the complaint as put up by the revenue authority is concealment of income and furnishing of inaccurate particulars of the income in the return filed by the appellant for the relevant assessment year 1979-80, corresponding to the accounting year ending 30th June, 1978. Against that order of penalty, the appellant preferred an appeal. Commissioner of income Tax, how ever, confirmed the order of penalty vide his order dated 5th March, 1986. Against that. order of the CIT, this appellant preferred an appeal before the Tribunal. During the pendency of the criminal complaint, the Tribunal allowed the appeal of the appellant on 11th February, 1988 thereby negating the charges of concealment and of filing in-accurate return. Tribunal also set aside the penalty proceeding.

( 4 ) AFTER the order of the Tribunal dated 11th February,1988 thereby knocking out the basis of the complaint, the appellant filed an application before the Icarned Additional Chief Metropolitan Magistrate, Delhi, seeking quashing and dropping of the criminal proceedings and discharge of the appellants. The said application of the appellant was dismissed by the impugned order on 7th August, 1995 holding that in the quantum of assessment proceedings before the Tribunal contrary view was expressed, therefore, the quashing of the penalty proceedings by the Tribunal is of no consequences. Further that since the finding of the Tribunal on the quantum side was inconsistent with its observation on the penalty side, therefore, it cannot be said that the appellants have been exonerated by the Tribunal. The question whether Ritu Nanda paid the commission bonafide being a question of fact the Criminal Court has the jurisdiction to arrive at its own finding after recording evidence.

( 5 ) AGGRIEV