The findings of the appellate authority in income tax matters are relevant and should be considered by the criminal court. If the appellate authority concludes that additions made to the incomes were not justified, it affects the criminal proceedings based on tax evasion and false statements.

Sukhdev Singh Rang, J.

1. This judgment will dispose of CWP Nos. 1080, 1528 and 1524 of 1984, filed by D.N. Bhasin, pertaining to the assessment years 1979-80, 1980-81 and 1981-82, respectively, and CWP Nos. 1081, 1527 and 1526 of 1984, filed by Smt. Kanta Bhasin, pertaining to assessment years 1979-80, 1980-81 and 1981-82, respectively, as common questions of fact and law are involved.

2. A brief reference to the spinal facts will help to resolve the issues raised in these petitions :

The petitioners are carrying on business in the name and style of M/s. Bhasin Tent House, Sector 27-D, Chandigarh. D.N. Bhasin filed income-tax returns for the assessment years 1979-80, 1980-81 and 1981-82 declaring therein total incomes of Rs. 14,990, Rs. 19,180 and Rs. 2.5,140-respectively, while Smt. Kanta Bhasin filed her income-tax returns for the assessment years 1979-80, 1980-81 and 1981-82, declaring therein total incomes of Rs. 20,340, 30,840 and Rs. 30,600, respectively. The assessments for the years 1979-80 and 1980-81 were completed on October 23, 1979, and October 23, 1980, respectively, in the case of D.N. Bhasin, whereas assessments for the assessment years 1979-80 and 1980-81 were completed on October 23, 1979, and October 21, 1980, respectively, in the case of Smt. Kanta Bhasin, and the returned incomes were accepted by the Income-tax Officer, Distt. I(I), Chandigarh (respondent No. 4). However, the assessment for the assessment year 1981-82 was not completed.

3. On April 3, 1982, the Income-tax Department searched the business and residential premises of the petitioners and took into possession certain papers, on which certain writings had been made. The statements of the petitioners were recorded by the Income-tax Officer.

4. On December 15, 1982, notices under Section 148 of the Income-tax Act were received by the petitioners from the Income-tax Officer proposing to reassess their income for the assessment year 1979-80. Before the petitioners could file the return of income for the assessment year 1979-80 in pursuance of notice under Section 148 of the Act, the Commissioner of Income-tax, Patiala, (respondent No. 3), granted sanction under Section 279(1) of the Act and authorised the Income-tax Officer, Chandigarh, to file criminal complaints against the petitioners under Sections 276C(1) and 277 of the Act.

5. It is pleaded by the petitioners that they had not been given any notice or opportunity of hearing before granting sanction. Similar notices under Section 148 were issued to the petitioners for the assessment years 1980-81 and 1981-82, intimating them that the Income-tax Officer proposed to assess their income for these two years. The Commissioner of Income-tax, Patiala, granted sanction under Section 279(1} of the Act authorising the Income-tax Officer, Chandigarh, to file a complaint against the petitioners under Sections 276C and 277 of the Act for the assessment years 1980-81 and 1981-82. Thereafter, the Income-tax Officer filed complaints against the petitioners which are pending in the court of the Chief Judicial Magistrate, Chandigarh.

6. The Income-tax Officer framed best judgment assessments against the petitioners under Section 144 of the Act, in relation to the assessment years 1979-80, 1980-81 and 1981-82, and added certain amounts to the income of the petitioners and reframed the assessments on that basis. The petitioners, aggrieved by these orders of the Income-tax Officer, filed appeals before the Commissioner of Income-tax (Appeals), Chandigarh. The petitioners filed the present writ petition in March, 1984 challenging the vires of Sections 276C, 277 and 279(1) of the Act and also seeking the quashing of the complaints filed against them in the criminal court.

7. The appeals filed by the petitioners were accepted and the orders of the Income-tax Officer adding certain amounts to the incomes returned by the petitioners in their returns of income were held to be not justified and in accordance wit