A criminal prosecution based on an assessment order which has been set aside cannot be sustained.

A. RAMAN, J.

This revision is directed against the order passed by the Additional Chief Metropolitan Magistrate (E.O.II), Egmore, Chennai, in M.P. No. 303 of 1996 in E.O.C.C. No. 180 of 1985, on August 22, 1997.

The allegations made in M.P. No. 303 of 1996 are as follows :

The complaint against the accused is that they have fabricated false evidence to show that they incurred expenditure of Rs. 1, 87, 500 by way of purchase of accessories and parts fitted to the printing units sold by them with a view to use the same for the assessment year 1979-80 and thus he made false statement. This was done with a view to evade payment of tax under the Income-tax Act and hence the accused fraudulently and dishonestly induced the Income-tax Officer to make an assessment order based on the alleged false return of income and statements with a view to have the tax payable by the accused at a lower rate than the legitimate rate of tax, which would be due. The accused, aggrieved by the order of assessment passed by the Income-tax Officer for the assessment year 1979-80, preferred an appeal in I.T. Appeal No. 96/82-83, before the Commissioner of Income-tax (Appeals)-II, Madras. The authority, by its order dated September 22, 1992, held that the matter requires reconsideration in the light of the evidence sought to be let in before him as some witnesses examined by the Assessing Officer seem to have retracted from the earlier stand and that it would be just and proper for the Assessing Officer to allow the first accused to have an opportunity to examine the witnesses and cross-examine them. In view of the order of the appellate authority, remitting back the assessment and directing the Assessing Officer to reframe the assessment, the prosecution launched in respect of the assessment is unjustified and unwarranted since the continuance of prosecution will be an abuse of process of law. As the prosecution has been launched solely on the basis of the assessment order for the assessment year 1979-80, since then the assessment order has been set aside by the Commissioner of Income-tax (Appeals-II), the very complaint is without any basis and it becomes unsustainable. Therefore, the proceedings against the accused should be terminated and the complaint should be dismissed.The Department filed an objection, contending that serious allegations are made in the complaint accusing that offences under sections 120B, 19 3 , 1 96 and 420 of the Indian Penal Code, and under sections 276C(1) , 277 re ad with section 278B of the Income-tax Act, 1961, have been committed. Bogus bills were prepared to show as though the first accused had incurred an expenditure of Rs. 1, 87, 500 by producing false vouchers. There are serious allegations of fabrication of the cash book, ledger, false vouchers, etc. The complaint has an independent existence, which is laid on the face of the evidence gathered and statements recorded. The appellate authority has only remitted back the matter to the assessing authority to enable the accused to have a fresh opportunity but that will not in any manner affect the complaint which has been already taken cognizance of. Hence, the petition is not maintainable.

The learned Additional Chief Metropolitan Magistrate (E.O.II), dismissed the petition. Hence, the petitioners have come up with the revision before this court.

On March 16, 1995, an order was passed by this court in Crl.O.P. No. 15230 of 1992 which runs (Thanjai Murasu v. ITO as follows (page 717) :

"The assessment order has been set aside by the, Commissioner of Income-tax directing the respondent to reframe having regard to the fresh evidence sought to be let in in respect of the sale of the machinery. In such a situation, whether the basis for the prosecution survives or not is a matter to be considered by the learned Magistrate, as a preliminary issue independently. With this observation, the petition is dismissed."

Now, the lower court, in its order, indicated that it cannot