PETITIONER: AUNDAL AMMAL Vs. RESPONDENT: SADASIVAN PILLAI DATE OF JUDGMENT09/12/1986 BENCH: <NAME>, SABYASACHI (J) BENCH: <NAME>, SABYASACHI (J) VENKATARAMIAH, <NAME> (J) CITATION: 1987 AIR 203 1987 SCR (1) 485 1987 SCC (1) 183 JT 1986 1028 1986 SCALE (2)1004 CITATOR INFO : * 1987 SC2323 (*) E 1987 SC2323 (3,7,12,13,14) RF 1988 SC 339 (6) * 1988 SC 812 (2,3,7,9,12,14,15,18,19,26,30, ACT: Kerala Buildings (Lease & Rent) Control Act, 1965, Section 18(5) & 20--Jurisdiction of <ORG> to inter- fere in revision under Section 115 C.P.C-- Whether ousted. Civil Procedure Code , 1908-- Section 115- -High Court's jurisdiction to interfere in revision with an order under the Kerala Buildings (Lease & Rent) Control Act. 1965. Words and Phrases-'Shall be final'--Shall not be liable to be called in question in any Court of Law'--Meaning of.. HEADNOTE: The Kerala Buildings (Lease and Rent Control) Act, 1965, by s. 13(3) provides that a landlord's petition for eviction of his tenant from a premises on the ground of bona fide personal need, has to be disposed of by <ORG>. Section 18(1)(b) makes provision of an appeal to <ORG> against the order of <ORG>. Sub-s.(5) of section 18 , stipulates that the decision of the appellate authority and subject to such decision, an order of the Rent Controller 'shall be final' and 'shall not be liable to be called in question in any court of law', except as provided in section 20 . By section 20 , a revision is provided where the appellate authority is Subordinate Judge to the District Judge and in other cases, that is to say, where the appellate authority is District Judge, to <ORG>. The respondent-landlord filed an eviction petition against the appellant's husband-tenant on the ground of bona fide personal need. The Rent Controller passed an order dismissing the petition. The order was confirmed in appeal filed by the respondent before <ORG>. Thereafter, the respondent preferred a revision petition before the District Judge. That petition having been dis- missed, he moved <ORG> under s. 115 of the Code of Civil Procedure. During the pendency of the second revision, the appellant's husband died and she was brought on record as the legal representative. <ORG> set aside all the orders of the courts below and ordered eviction of the appellant. 486 In appeal to this Court, it was contended on behalf of the appellant tenant that <ORG> had exceeded its jurisdiction in setting aside the judgments and orders of the courts below, since no revision lies to <ORG> against the order of the District Judge in view of s. 18(5) read with s.20 of the Act which has completely ousted <ORG>'s jurisdiction to interfere u/s. 115 of the Code of Civil Procedure. Allowing the appeal, HELD: (1) <ORG> had no jurisdiction to inter- fere in the matter u/s. 115 of C.P.C. Therefore, the judg- ment and order of <ORG> are set aside. [496 B,G] 2(i) The ambits of revisional powers are well-settled and need not be restated. It is inconceivable to have two revisions. The scheme of the Kerala Buildings (Lease & Rent Control) Act, 1965 does not warrant such a conclusion. [492 D] 2(ii) Sub-s. (5) of s. 18 of the Act says that subject to the decision of the appellate authority, the decision of the Rent Controller shall be final an,] could only be ques- tioned in the manner provided in section 20 and in no other manner. The expression 'shall be final' in the Act means what it says. The intention of the legislature in enacting the said Act is clear and manifest from s. 18(5) and the scheme of the Act, that is to say, to regulate the leasing of buildings and to control the rent of such buildings and to provide a tier of courts by themselves for eviction of the rented premises. This is writ large in the different provisions of the Act. [492 G] 2(iii) When section 18(5) of the Act specifically states that "shall not be liable to be called in question in any Court of law" except in the manner provided under section 20 , it cannot be said that <ORG> which is a court of law and which is a civil court under the Code of Civil Procedure under section 115 of the Code of Civil Procedure could revise again an order on again after revision under section 20 of the Act. That would mean there would be a trial by four courts, that would be repugnant to the scheme manifest in the different sections of the Act in question. Public policy or public interest demands curtailment of law's delay and justice demands finality within quick dis- posal of case. The language of the provisions of section 18(5) read with section 20 inhibits further revision. The courts must so construe. [494 G-495 A] Kydd y. <ORG> of City of Liverpool, (1908) Appeal Cases 327 at 331-332; <CITATION> and 487 Others,  2 SCR 756 & <CITATION> , 3 SCR 32, relied upon. <CITATION> , (1968) K.L.T. 583, over-ruled. <CITATION> , AIR 1934 P.C. 81, distinguished. <NAME> v. <NAME>, (1960) KLT 1248, approved. In the instant case, the appeal lay from <ORG> to the appellant authority who was the Subordinate Judge and therefore the revision lay to the District Judge. After the dismissal of the revision by the District Judge from the appellate decision of the Subordinate Judge who confirmed the order of the Rent Controller, the respondent- landlord chose again to go before <ORG> under section 115 of the Code of Civil Procedure. But, he could not have a second revision to <ORG>, since the jurisdiction of <ORG> u/s. 115 of the C.P.C. was excluded by the Act. [491 H-492 B, D] JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5032 of From the Judgment and Order dated 20.8.1985 of <ORG> in C.R.P. Nos. 1643 and 2552 of 1980. <NAME> and <NAME> for the Appellant. <NAME>, <NAME> and <NAME> for the Respondent.

The Judgment of the Court was delivered by <NAME>, J. This appeal by special leave from the decision of learned single judge of <ORG> is disposed of on a short question of law. The appellant is a tenant. <ORG> had reversed the concurrent findings and the decisions of three courts below it and ordered eviction of the appellant. The dispute relates to a portion of the ground floor of a three-storeyed building situated in one of the busiest commercial areas Pazhavangadi of the city of Trivandrum. where the appellant had been conducting a tea shop by name '<ORG>'. In the adjacent rooms on the ground floor, the landlord was conducting a business in textiles namely '<ORG>'. The tenancy began on 12th June, 1965. The tenancy was taken by the husband of the appellant. The rent was Rs. 140 per month. The husband of the appellant died. Thereafter the appellant had been conducting the business from there.

On or about 15th April, 1976, the respondent purchased.a three storeyed building. The petition schedule premises is a portion of the ground floor of the said three storeyed building. It is the case of the appellant that there were seven rooms on the first floor of the said building out 'of which four were in the possession of the respondent and three rented out as aforesaid. The premises on the second floor were used by the respondent-landlord as a lodge. On 9th April, 1977, the respondent filed an application under section 17 of the Kerala Buildings (Lease and Rent Control) Act, 1965 (hereinafter called the Act) for permission to convert the non-residential building to a residential build- ing. On 30th November, 1977, <ORG> rejected the said application.

On 2nd June, 1978, the respondent filed the petition for eviction of the appellant on the ground of bona fide need of the premises in question for his residence. Arrears of rent was also one of the grounds taken against the appellant. The tenant duly filed his objection. On 31st October, 1978, <ORG> dismissed the respondent-landlord's petition for eviction. It was found that the landlord had other buildings in his own possession and therefore. no order of eviction could be passed by virtue of the first proviso to section 11(3) of the Act. <ORG> on or about 2nd July, 1979 dismissed the respondent-landlord's appeal.

On 28th March, 1980, the revision petition filed by the respondent was also dismissed by <ORG>. <ORG> was moved by the respondent-landlord under section 115 of the Code of Civil Procedure. The husband of the appellant died on 8th May, 1985. She was therefore impleaded as the legal representative and she is conducting the business since the death of her husband;

By the order dated 20th August, 1985, <ORG> by its impugned order has set aside all the orders of the courts below. The tenant, the appellant herein has come up in appeal to this Court under article 136 of the Constitu- tion.

<NAME>

Several questions were posed before us in this case, inter alia, (i) whether the revision under section 115 of the Code of Civil Procedure lies to <ORG> from a revision order passed under section 20 of the said Act? (ii) whether <ORG> has exceeded its jurisdiction under section 115 in setting aside the judgments and orders of the courts below in ordering eviction of the appellant from the premises in question reversing the findings of facts? (iii) whether eviction of a tenant from a non-residential building could be ordered for the user of the building for residence of the landlord, if the Accommodation Controller had refused permission under section 17 of the Act to convert the build- ing from non-residential to residential? (iv) where the Accommodation Controller refused the permission to convert the building from non-residential to residential, does the claim to the building by the landlord for a residential purpose become illegal and not recognised by law and whether the claim of the landlord can still be held to be bona fide?

(v) whether in ordering eviction the special reasons relied on by <ORG> on a reappreciation of facts are borne out from the evidence in this case and whether the facts stated by <ORG> constitute "special reasons" re- quired under the first proviso to section 11 (3) in ordering eviction and setting aside the judgments and orders of the courts below.

For the present purpose, it is relevant to refer to section 11(3) of the Act which provides as follows:

"11 (3). A landlord may apply to <ORG> for an order directing the tenant to put the landlord in possession of the building if he bona fide needs the build- ing for his own occupation or for the occupa- tion by any member of his family dependent on him;

Provided that <ORG> shall not give any such direction if the landlord has another building of his own in his possession in the same city, town or village except where <ORG> is satisfied that for special reasons, in any particular case it will be just and proper to do so:

Provided further that <ORG> shall not give any direction to a tenant to put the landlord in possession, if such tenant is depending for his livelihood mainly on the income derived from any trade or business carried on in such building and there is no other suitable building available in the locality for such person to carry on such trade or business;

Provided further that no landlord whose right to recover possession arises under an instrument of transfer inter vivos shall be entitled to apply to be put in possession until the expiry of one year from the date of the instrument; Provided further that if a landlord after obtaining an order to be put in posses- sion transfers his rights in respect of the building to another person, the transferee shall not be entitled to be put in possession unless he proves that he bona fide needs the building for his own occupation or for the occupation by any member of his family depend- ent on him."

In the view we have taken on the question that no revi-

sion lay to <ORG>, it is not necessary to refer to other provisions of the Act or to the details of the facts of this case. It is, however, necessary to refer to sections 18 and 20 of the Act which are as follows:

"18. Appeal--(1) (a) The Government may, by general or special order notified in the <ORG>, confer on such officers and authori- ties not below the rank of a Subordinate Judge the powers of appellate authorities for the purposes of this Act in such areas or in such classes of cases as may be specified in the order.

(b) Any person aggrieved by an order passed by <ORG> may, within thirty days from the date of such order, prefer an appeal in writing to the appellate authority having jurisdiction. In computing the thirty days aforesaid, the time taken to obtain a certified copy of the order appealed against shall be excluded.

(2) On such appeal being preferred, the appellate authority may order stay of further proceedings in the matter pending decision on the appeal.

(3) The appellate authority shall send for the records of the case from <ORG> and after giving the parties an opportunity of being heard and, if necessary, after making such further inquiry as it thinks fit either directly or through <ORG>, shall decide the appeal. Explanation:--The appellate author- ity may, while confirming the order of evic- tion passed by <ORG>, grant an extension of time to the tenant for putting the landlord in possession of the building.

(4) The appellate authority shall have all the powers of <ORG> including the fixing of arrears of rent. (5) The decision of the appellate authority, and subject to such decision, an order of <ORG> shall be final and shall not be liable to be called in ques- tion in any Court of law, except as provided in section 20 .

20. Revision:--(1) In cases where the appellate authority empowered under sec- tion 18 is a Subordinate Judge, <ORG>, and in other cases <ORG> may, at any time, on the application of any ag- grieved party, call for and examine the re- cords relating to any order passed or proceed- ings taken under this Act by such authority for the purpose of satisfying itself as to the legality regularity or propriety of such order or proceedings and may pass such order in reference thereto as it thinks fit. (2) The costs of and incidental to all proceedings before <ORG> or <ORG> under Sub-section (1 ) shall be in its discretion."

It has further to be borne in mind that the Act in question was an Act to regulate the leasing of buildings and to control the rent of such buildings in the State of Kera- la.

It was contended by <NAME>, learned counsel for the appellant, that no revision lay to <ORG>. He sub- mitted that section 18(5) read with section 20 of the Act has completely ousted <ORG>'s jurisdiction to interfere in this matter under section 115 of the Code of Civil Procedure.

Under the scheme of the Act it appears that a landlord who wants eviction of his tenant has to move for eviction and the case has to be disposed of by <ORG>. That is provided by sub-section (2) of section 11 of the Act. From <ORG>, an appeal lies to <ORG> under the conditions laid down under sub-section (1)(b) of section 18 of the Act. From <ORG> a revision in certain circumstances lies in case where the appellate authority is a Subordinate Judge to <ORG> and in other cases to <ORG>. In this case as mentioned hereinbefore the appeal lay from Rent Control Court to the appellate authority who was the Subordinate Judge and there- fore the revision lay to the District Judge. Indeed it is indisputed that the respondent has in this case taken resort to all these provisions. After the dismissal of the revision by the District Judge from the appellate decision of the Subordinate Judge who confirmed the order of the Rent Con- troller, the respondent-landlord chose again to go before <ORG> under section 115 of the Code of Civil Proce- dure. The question, is, can he have a second revision to <ORG>? <NAME> submitted that he cannot. We are of the opinion that he is fight. This position is clear if sub-section (5) of section 18 of the Act is read in conjunc- tion with section 20 of the Act. Sub-section (5) of section 18 , as we have noted hereinbefore, dearly stipulates that the decision of the appellate authority and subject to such decision, an order of the Rent Controller 'shall be final' and 'shall not be liable to be called in question in any court of law', except as provided in section 20 . By section 20 , a revision is provided where the appellate authority is Subordinate Judge to the District Judge and in other cases, that is to say, where the appellate authority is District Judge, to <ORG>. The ambits of revisional powers are well-settled and need not be re-stated. It is inconceiv- able to have two revisions. The scheme of the Act does not warrant such a conclusion. In our opinion, the expression 'shall be final' in the Act means what it says. In <NAME> v. <ORG> of City of Liverpool.  Appeal Cases 327 at 331-332. Lord <NAME> <NAME>, construing the provisions of section 11 of the Police Act, 1890 of England which provided an appeal to quarter sessions as to the amount of a constable's pension, and also stipulated that the Court shall make an order which would be just and final, observed:

"Where it says, speaking of such an order, that it is to be final, I think it means there is to be an end of the business at quarter sessions ....... "

The said observation could most appropri-

ately be applied to the expression used by the legislature in sub-section (5) of section 18 of the Act in question. It means what it says that subject to the decision of the appellate authority, the decision of the Rent Controller shall be final and could only be questioned in the manner provided in section 20 and in no other manner. The intention of the legislature in enacting the said Act is clear and manifest from this section and the scheme of the Act, that is to say, to regulate the leasing of buildings and to control the rent of such buildings and to provide a tier of courts by themselves for eviction of the rented premises. This is writ large in the different provisions of the Act. This Court, referring to the aforesaid observations of Lord <NAME>, L.C. in the case of <CITATION> .  2 S.C.R. 756 observed at page 766 of the report that the expression "final"prima facie meant that an order passed on appeal under the Act was conclusive and no further appeal lay. This Court was con- struing sections 39 and 43 of the Delhi Rent Control Act, 1958 and the effect thereof in the context of Letters Patent Appeal. There sections 39 and 43 provided as follows:--

" Section 39 . (1) Subject to the provisions of sub-section (2), an appeal shall lie to <ORG> from an order made by the <ORG> within sixty days from the date of such order. (2) No appeal shall lie under sub- section (1), unless the appeal involves some substantial question of law.

Section 43 . Save as otherwise ex- pressly provided in this Act, every order made by the Controller or an order passed on appeal under this Act shall be final and shall not be called in question in any original suit, application or execution proceedings." This Court observed at page 766 that a combined reading of the said two sec- tions made it clear that subject to the fight of appeal to <ORG> on a substantial question of law, the order passed by the Controller or an order passed on appeal was final and could not be called in question in any original suit, application or execution proceeding. The use of the expression "shall be final" will have to be understood in the proper context and keeping in view the purpose of the different sections.

On behalf of the respondent, <NAME> relied on a decision of the Full Bench of <ORG> on which <ORG> had rested its decision in <CITATION> ,  K.L.T. 583 in repelling the submission by the appellant on this aspect. There <ORG> was concerned with the identical Act. <NAME>, J. speaking for the Full Bench of <ORG> on this contention after referring to several decisions observed at pages 588-589 of the report as follows:

"The contention of the respondent that the decision of <ORG> rendered under S. 20(1) is not amenable to revisional juris- diction of <ORG> under S. 115 of the Civil Procedure Code is based mainly on the provision for finality contained in S. 18(5) of the Act. That Section is in the following terms:-- "The decision of the appellate authority, and subject to such decision, an order of <ORG> shall be final and shall not be liable to be called in question in any Court of law, except as provided in S. 20 ." What is to be noted here is that there is nothing in the Section which says that the decision of the revisional authority under S. 20 shall be final and shall not be called in question in any higher court."

The learned judge referred to the decision of the Judi-

cial Committee in the case of <CITATION> , AIR 1934 P.C. 111. The learned judge also referred to a decision of this Court in <CITATION> . (supra). The learned judge concluded that so long as there was no specific provision in the statute making the determi- nation by <ORG> final and excluding the super- visory power of <ORG> under section 115 of the Code of Civil Procedure, it had to be held that the decision rendered by <ORG> under section 20(1) of the Act being a decision of a court subordinate to <ORG> to which an appeal lay to <ORG> was liable to be revised by <ORG> under section 115 of the Code of Civil Procedure. In that view of the matter, <ORG> rejected the view of the division bench of <ORG> in <NAME> v. <NAME>,  KLT 1248. With re- spect, we are unable to sustain the view of <ORG> of <ORG> on this aspect of the matter. In our opinion, <ORG> misconstrued the provisions of subsection (5) of section 18 of the Act. Sub-section (5) of section 18 clearly states that such decision of the appel- late authority as mentioned in section 18 of the Act shall not be liable to be questioned except in the manner under section 20 of the Act. There was thereby an implied prohibi- tion or exclusion of a second revision under section 115 of the Code of Civil Procedure to <ORG> when a revi- sion has been provided under section 20 of the Act in ques- tion. When section 18(5) of the Act specifically states that "shall not be liable to be called in question in any Court of law" except in the manner provided under section 20 , it cannot be said that <ORG> which is a court of law and which is a civil court under the Code of Civil Procedure under section 115 of the Code of Civil Procedure could revise again an order once again after revision under sec- tion 20 of the Act. That would mean there would be a trial by four courts, that would be repugnant to the scheme mani- fest in the different sections of the Act in question. Public policy or public interest demands curtailment of law's delay and justice demands finality within quick dis- posal of case. The language of the provisions of section 18(5) read with section 20 inhibits further revision. The courts must so construe.

<ORG> in <CITATION> (supra) was dealing with the Provincial Insolvency Act and the <ORG> observed that when a right of appeal was given to any of the ordinary courts of the country, the procedure, orders and decrees of that Court would be gov- erned by the ordinary rules of the Civil Procedure Code, and therefore an appeal to Privy Council was maintainable from the decision of <ORG>. Here in the instant case the right of appeal has been given under the Act not to any ordinary court of the country under the Code of Civil Proce- dure but to the courts enumerated under the Rent Act . In that view of the matter, the ratio of that decision cannot be applied in aid of the submission for respondent in this case.

Indeed this view, in our opinion, is concluded by the decision of this Court in the case of <CITATION> ,  3 S.C.R. 32 where this Court was concerned with section 115 of the Code of Civil Procedure and the amendments made therein which superseded the bifur- cation of the revisional jurisdiction between <ORG> and <ORG>. <ORG> possessed revisional jurisdiction from an order of District Judge disposing of revision petition. This Court observed that section 115 of the Code of Civil Procedure conferred on <ORG> of a State power to remove any jurisdictional error committed by a subordinate court in cases where the error could not be corrected by resort to its appellate jurisdiction. There after tracing the history of the amendment of the Code of Civil Procedure by Amendment Act , 1976, this Court observed that the amendment superseded the scheme of bifurcation of revisional jurisdiction with effect from 1 st February, 1977. Section 25 of the Provincial Small Cause Courts Act was amended from time to time in its application to the State of U.P. The two questions that fell for consideration before this Court were (i) whether <ORG> possessed the revisional jurisdiction under section 115 of the Code of Civil Procedure in respect of an order of <ORG> under section 115 disposing of a revision petition and (ii) whether <ORG> possessed revisional jurisdiction under section 115 of C.R.C. against an order of <ORG> under section 25 of Provincial Small Cause Courts Act. It was held that <ORG> was not vested with that. revisional jurisdiction. This Court was of the view that an order under section 25 of the Provincial Small Cause Courts Act was not of a court of <ORG> and was not amena- ble of revisional jurisdiction. This COurt 'further observed that an examination of the several provisions of the Provin- cial Small Cause Courts Act indicated that it was self- sufficient code so far as the enquiry covered by that Act was concerned. All the indications in the Act were to that effect. After analysing the scheme and referring to the decisions of this Court, this Court held that the jurisdiction of <ORG> under section 115 of the Code of Civil Procedure was excluded.

In that view of the matter, we are of the opinion that the Full Bench of <ORG> was in error and <ORG> in the instant case had no jurisdiction to inter- fere in this matter under section 115 of C.P.C. It was urged that in case we are of the opinion that a revision under section 115 of the Code of Civil Procedure does not lie, the case should be remitted to <ORG> for consideration as a petition under article 227 of the Constitution. We are unable to accede. A petition under article 227 of the Constitution is different from revision under section 115 of the Code of Civil Procedure. The two procedures are not interchangeable though there are some common features. It must, however, be emphasised that we are not dealing in this appeal with the constitutional powers of <ORG> under article 227 of the Constitution nor are we concerned with the powers of <ORG> regulating appeals under <ORG> Act, 1958. We are con- cerned in this case whether <ORG>, in view of the scheme of the Act, had jurisdiction to interfere under section 115 of the Code of Civil Procedure. We reiterate that to vest <ORG> with any such jurisdiction would be contrary to the scheme of the Act, would be contrary to the public policy, and would be contrary to the legislative intent as manifest from the different sections of the Act. In that view of the matter, the appeal must be allowed on that ground alone and it is not necessary for us to refer to the other grounds. We must necessarily overrule the decision of the Full Bench of <ORG> referred to hereinbefore.

Before we conclude, we must, however, note that <NAME> appearing for the tenant has conceded that rent should be increased to Rs. 500 per month for the premises in ques- tion, as the existing rent is too low. The appeal is accord- ingly allowed and we direct on the concession of <NAME> that rent would be Rs. 500 per month from this date. The judgment and order of <ORG> are set aside. In the facts and circumstances of this case, there will be no order as to costs.

M.L.A. Appeal allowed.


CASE NO.: Appeal (crl.) 212-213 of 1998 PETITIONER: <NAME> & Anr. RESPONDENT: <NAME> of Income Tax DATE OF JUDGMENT: 28/01/2004 BENCH: <NAME> & Dr. <NAME>. JUDGMENT:

JUDGMENT Dr. <NAME>, J.

These appeals are directed against the final judgment passed by <ORG> at Madras in Criminal Revision Case No. 508 of 1997 and Criminal Misc. Petition No. 3411 of 1997 dated 13.08.1997 by which <ORG> dismissed the criminal revision under Section 397 read with Section 401 of the Code of Criminal Procedure, 1973. The facts giving rise to these appeals are as under:-

The appellant is a partnership firm engaged in the business of construction and sale of flats. The construction of some of the projects started in the year 1981-82 and was completed in the year 1986-87. The appellants filed the returns of income disclosing the assessed income as the income. The cost of construction was shown as under:-

Assessment Year 1983-84 - Rs.4,72,860/-

Assessment year 1984-85 - Rs.5,77,590/-

Assessment year 1985-86 - Rs.7,28,531/-

Assessment year 1986-87 - Rs.7,03,002/-

The appellants filed revised returns as per the approved valuer's report for assessment years 1983-84 to 1986-87 on 04.11.1987 in the following manner as the earlier returns were found to be defective with regard to cost of construction.

Assessment year 1983-84 - Rs.8,76,000/-

Assessment year 1984-85 - Rs.5,42,000/-

Assessment year 1985-86 - Rs.13,47,229/-

Assessment year 1986-87 - Rs.10,37,920/-

The revised returns were accepted by the <ORG> and assessments were completed.

The respondent/assessing authority treated the difference between the income as per original return and revised income as concealed income. The Assistant Commissioner of Income-Tax levied penalties under Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for all the aforesaid four assessment years. Accordingly, penalty proceedings were initiated. The first appeal against the order of penalties levied for concealment of income against the appellants were confirmed by the C.I.T. (Appeals). As per the directions of the Chief Commissioner of Income Tax, four complaints were filed in <ORG>, Egmore, Chennai for offences under Sections 276C (2), 278B of the Act and Sections 120B , 34 , 193 , 196 and 420 of the Indian Penal Code. The gist of the prosecution case was that a conspiracy was entered into between the accused/appellants and they filed false returns of income before the <ORG> which led to concealment of income to evade tax. On 24.10.1996, the appellants had preferred an appeal before <ORG> against the consolidated order passed by C.I.T. (Appeals) on 18.07.1990 for assessment years 1983-84 to 1986-

87. It was contended that the Assessing Officer referred the matter relating to valuation of <ORG> which reportedly estimated the cost of construction at Rs.50,96,750/-. If that were to be adopted then the income would result in a loss. It was contended that the <ORG> has not brought out any material to show that there was concealment of income. The <ORG>, after verifying the records, found that the additions were on the basis of settlement between the assessees and the <ORG> and represents voluntary offer made by the assessee and, therefore, in such circumstances the <ORG> applying the principles laid down by this Court in the Case of Sir <NAME> and <ORG> & Anr. Vs. C.I.T., Delhi [1987] 168 I.T.R. 705 held that there was no concealment of income by the assessee and accordingly the penalties were cancelled and allowed the appeals. The appellants thereupon moved an application before the Additional Chief Metropolitan Magistrate, (E.O.II), Egmore, Chennai by filing M.P. No.614 of 1996 in C.C. No. 425 of 1990 praying the Court for adjourning the proceedings in the above case to enable them to move the necessary petition and to file the copy of the order of the <ORG> dated 24.10.1996 which allowed the appeals preferred by the Ist accused against the levy of penalty upon them. However, the learned Magistrate permitted the appellants to mark the order of the <ORG> in evidence at the appropriate stage of trial for which prosecution has no objection.

Giving effect to <ORG> order in I.T.A. Nos. 3129- 3132, the penalties levied under Section 271(1)(c) of the Act were cancelled by the respondent on 27.01.1997. In the meanwhile, <ORG> filed an application under Section 256(1) of the Act for reference of the question of law which had arisen out of <ORG> Order dated 24.10.1996. The application of <ORG> was rejected. Thereupon, the appellants preferred a Criminal Revision under Sections 397 and 401 of the Criminal Procedure Code, 1973 before <ORG> for setting aside the order passed by the Additional Chief Metropolitan Magistrate dated 21.7.1997. The learned Single Judge of <ORG> rejected the criminal revision vide his impugned order holding that <ORG> order was not applicable since it was not marked as defence document whereas the fact remains that the order was passed at a subsequent date. Before <ORG>, the decision of this Court in <NAME> and <NAME>. Vs. Union of India,  197 I.T.R. 196 was cited. <ORG> after observing that the observation in the case of <NAME> & <NAME>. (supra) helps the appellants to the extent that the trial Court should have given due regard to the <ORG>'s order but clearly made an error by distinguishing the said judgment on the ground that the <ORG>'s order was marked as a defence document whereas in the instant case it was not marked as a defence document. Whereas the fact remains that the defence documents were marked earlier to the order dated 24.10.1996 passed by the Appellate <ORG> which was immediately thereafter brought to the notice of the trial Court even by the prosecution in their own application. We have perused the pleadings, the order passed by <ORG>, copy of the complaints, copy of the order dated 24.10.1996 passed by the Income Tax Appellate <ORG>, Madras, order dated 11.12.1996 passed by the Additional Chief Metropolitan Magistrate, Chennai, copy of the proceedings of the Income Tax Officer cancelling the penalty levied under Section 271(1)(c) of the Act, copy of the application filed on 12.12.1996 by the appellants and copy of the order passed thereupon on 21.07.1997 and copy of the order dated 4.8.1997 passed by the ITAT Bench Madras in Reference Application Nos. 32-35 for assessment years 1983-84 to 1986-87. We also perused the relevant provisions under the Income Tax Act , 1961 and of the Indian Penal Code . On the above pleadings and facts and circumstances of the case, the following questions of law arise for consideration by this Court:-

(a) Whether a penalty imposed under Section 271 (1) (c) of the Income Tax Act and prosecution under Section 276C of the Income Tax Act are simultaneous?

(b) Whether the Criminal prosecution gets quashed automatically when <ORG> which is the final Court on the facts comes to the conclusion that there is no concealment of income, since no offence survives under the Income Tax Act thereafter?

(c) Whether <ORG> was justified in dismissing the Criminal Revision Petition vide its impugned order ignoring the settled law as laid down by this Court that the finding of <ORG> was conclusive and the prosecution cannot be sustained since the penalty after having been cancelled by the complainant following <ORG> Order no offence survives under the Income Tax Act and thus the quashing of the prosecution is automatic?

(d) Whether the finding of <ORG> is binding upon <ORG> in view of the fact that the Chief Commissioner and the Assessing Officer who initiated the prosecution under Section 276C (1) had no right to overrule the order of <ORG>. More so when the Income Tax Officer giving the effect to the order cancelled the penalty levied under Section 271 (1) (c).

(e) Whether <ORG> order is liable to be set aside in view of the errors apparent on record.

We heard Mr. <NAME>, learned counsel appearing for the appellants and Mr. <NAME>, learned senior counsel appearing for the respondent. Learned counsel appearing for the appellants submitted that the learned single Judge of <ORG> has failed to appreciate that under Section 254 of the Act an order by <ORG> not only superseded the order passed by the Assessing Officer under Section 143(3) of the Act but also set aside the finding of the Assessing Officer under the provisions of the Act. He further submitted that <ORG> has failed to appreciate that both the penalty proceedings and the prosecution are simultaneous and any prosecution launched on the basis of the order of the Assessing Officer under Section 143(3) of the Act became void and it knocks down the very basis for prosecution under Section 276C of the Act and it is in this background the Assessing Officer giving effect to the order of <ORG>, cancelled the penalty levied. Learned counsel further submitted that the learned single Judge has failed to see that the findings of the appellate Tribunal that there was no concealment of income and the same became conclusive and hence prosecution could not have been sustained. <ORG> has also further failed to see that even the application for reference by <ORG> under Section 256(1) of the Act was rejected on the ground that it is a pure question of fact and no question of law was involved. It was also further contended that <ORG> failed to note that the order passed by the income Tax Appellate Tribunal though marked as Exhibit through the defendants witness was not considered by the Courts below.

Mr. <NAME>, learned senior counsel appearing for the respondent, vehemently opposed the contentions raised by learned counsel for the appellants. He submitted that the penalty proceedings and the prosecution proceedings are clearly independent and that the result of proceedings under the Act is not binding on <ORG> and that <ORG> has to judge the case independently on the evidence placed before it. He would further submit that the complaints were filed in March, 1990 under Sections 276C (1), 277 & 278B of the Act before the Additional Chief Metropolitan Magistrate which were registered as E.O.C.C. Nos. 422 to 425 of 1990, charges were framed against the accused firm and its partners in September, 1993 and by October, 1996, nine prosecution witnesses had already been cross-examined and the prosecution witness No.10 was examined on 8.10.1996. At this stage, the appellants filed a petition for dropping the prosecution proceedings and, therefore, <ORG> was justified in dismissing the petition of the appellants on the facts and circumstances of the case. It was further submitted that the discretion should be exercised judicially and in such a way as not to frustrate the object of the criminal proceedings and, therefore, <ORG> is justified in dismissing the petition of the appellants. Concluding his submissions, learned senior counsel submitted that on the facts and circumstances of the case, the order of <ORG> is neither erroneous nor against the principles of law.

Before proceeding to consider the rival submissions, it is beneficial to refer to some important provisions of the Act under which the proceedings have been initiated:- Section 147 of the Act deals with income escaping assessment. Section 148 deals with issue of notice where income has escaped assessment. Section 254 deals with orders of <ORG>. Section 256 deals with statement of case to <ORG> (reference). Section 271 (1)(c) reads as follows:- " Section 271 . Failure to furnish returns, comply with notices, concealment of income, etc.  (1) If the Assessing Officer or the Commissioner(Appeals) in the course of any proceedings under this Act, is satisfied that any person

(a) ..

(b) .

(c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty, -

(i) .

(ii)

(iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or the furnishing of inaccurate particulars of such income."

One of the amendments made to the abovementioned provisions is the omission of the word "deliberately" from the expression "deliberately furnished inaccurate particulars of such income". It is implicit in the word "concealed" that there has been a deliberate act on the part of the assessee. The meaning of the word "concealment" as found in Shorter Oxford English Dictionary, 3rd Edition, Volume I, is as follows:- "In law, the intentional suppression of truth or fact known, to the injury or prejudice of another."

The word "concealment" inherently carried with it the element of mens rea. Therefore, the mere fact that some figure or some particulars have been disclosed by itself, even if takes out the case from the purview of non-disclosure, it cannot by itself take out the case from the purview of furnishing inaccurate particulars. Mere omission from the return of an item of receipt does neither amount to concealment nor deliberate furnishing of inaccurate particulars of income unless and until there is some evidence to show or some circumstances found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid the imposition of tax thereon. In order that a penalty under Section 271(1) (iii) may be imposed, it has to be proved that the assessee has consciously made the concealment or furnished inaccurate particulars of his income. Where the additions made in the assessment order, on the basis of which penalty for concealment was levied, are deleted, there remains no basis at all for levying the penalty for concealment and, therefore, in such a case no such penalty can survive and the same is liable to be cancelled as in the instant case. Ordinarily, penalty cannot stand if the assessment itself is set aside. Where an order of assessment or reassessment on the basis of which penalty has been levied on the assessee has itself been finally set aside or cancelled by the <ORG> or otherwise, the penalty cannot stand by itself and the same is liable to be cancelled as in the instant case ordered by the <ORG> and later cancellation of penalty by the authorities. Section 276C of the Act deals with wilful attempt to evade tax, etc. Section 277 deals with false statement in verification, etc. and Section 278B deals with the offences by companies.

Four complaints were filed by the Assistant Commissioner of Income Tax, Central Circle III(1) against the appellants on the basis of the sanction ordered by the Commissioner of Income Tax under Section 279(1) of the Act for the prosecution of the accused/appellants for the offences punishable under Sections 276 C (1), 277 and 278B of the Act.. It is stated in the complaint that the accounts and documents seized during the course of search showed that the accused had suppressed the true receipts from sale of flats, action under Section 148 of the Act was taken and in response to the said notice, the return of the respective accounts were delivered to the Income Tax Officer which was signed and verified by the accused concerned and that the Income Tax Officer further made the enquiries and investigations and summoned various persons for their statements. When the enquiry was in progress, the accused knowing that the suppression of receipts has been found out by the Income Tax Officer filed another revised return on 4.11.1987 showing different income as against the original return. It was submitted that the appellants with a view to wilfully evade tax and to defraud the exchequer of its legitimate revenue and to deceive the Income Tax Officer, acting in consort and in furtherance of the common intention, all the accused conspired to fabricate false evidence in the form of Books of Accounts containing false entries with a view to using them as genuine evidence in Income Tax assessment proceedings for the assessment year 1983-84. Thus it was stated that the appellants had committed offence punishable under the provisions above-quoted. A consolidated order was passed by the Commissioner of Income Tax (Appeals) on 18.7.1990 for the assessment years 1983-84 to 1986-87. In all these appeals, the assessee disputed the imposition of penalty under Section 271(1)(c) of the Act. The assessments were initially completed under Section 143(3) of the Act. On 20.3.1986, the business premises of the firm as well as the residential premises of two of its partners were searched under Section 132 of the Act. In response to the same, the assessee filed the returns of income disclosing the income assessed as the income. After filing the returns in accordance with these books, the assessee came to know that <ORG> were defective with regard to the cost of construction. Therefore, on 04.11.1987, the assessee filed a revised return estimating the cost of construction on the basis of the approved valuer's report. The revised returns were accepted by the <ORG> and the assessments were completed. The difference between the income as per the original returns and the income shown in the revised returns was treated as concealed income and the Assessing Officer has levied the penalty under Section 271(1)(c) of the Act in all these years. The assessees were unsuccessful before the Commissioner of Income Tax (Appeals). Therefore, the assessee filed the appeals before <ORG>, Madras in I.T.A. Nos. 3129 to 3132/Mds/90. Before the <ORG>, it was pointed out that since there were defects in <ORG> with regard to the cost of construction, the assessee voluntarily referred the matter to the approved valuer and has revised the returns accordingly. All this was done with a view to buy peace with the <ORG> and the returned income does not represent any concealed income. It was also pointed out by the learned counsel that the <ORG> has not made any addition beyond what has been returned by the assessee. In other words, it was pointed out that the returned income has been accepted by the <ORG> and there is no concealment of any income. It was stressed by the counsel that the returns were revised in pursuance of the settlement with the <ORG> only to buy peace. Learned counsel appearing for the <ORG>, on the other hand, strongly supported the imposition of penalty in the facts and circumstances of the case. The <ORG> allowed the appeal and cancelled the penalty. It is useful to reproduce the concluding part of the order passed by the <ORG> which is as under:

"We have carefully considered the rival submissions and perused the materials brought on record. Although there is a discussion by the Assessing Officer that the assessee has received some on-money in respect of sale of flats but he has not mentioned what is the exact quantum of such on-money receipts. The mere fact that though the receipt of on-money is a prevalent practice in the case of transaction in flats, it cannot be presumed that there was a concealment of income or evasion of taxes. The <ORG> must bring out material to indicate the actual concealment of income. The whole discussions in the assessment order clearly shows that the <ORG> has proceeded only on the basis of the cost of construction. At the stage when enquiries were made, the assessee has got the valuation done by an approved valuer and filed the revised returns and paid the taxes thereon. This conduct clearly shows that there was some sort of settlement between the assessee and the <ORG>. The assessment of income is based purely on estimate basis. Without adequate materials, it is impossible to accept the <ORG>'s contention that some part of the estimated income represents concealed income. The assessee has filed the revised returns. By so revising the returns, the assessee has substituted the income of the original return with that of the revised returns vis-`-vis the revised return there is no concealment of any income. The department has accepted all these revised income which clearly shows that the assessments are based on the basis of the voluntary offer made by the assessee. There is no material brought before us even at this stage to show that there was any concealment of income by the assessee and therefore find force in the stand taken by the assessee that the entire revision of income was as a result of voluntary offer made by the assessee. Keeping in view the ratio laid down by <ORG> in the case of <CITATION> (165 ITR 705), we hold that in the facts and circumstances of the case there is no concealment of income by the assessee. Accordingly, the penalties are cancelled.

In the result, the appeals are allowed.

Sd/- Sd/- (G. Chowdhury) (G.E.Veerabhadrappa) Judicial Member Accountant Member Madras, Dated, the 24th October, 1996" (emphasis supplied)

The above order of the <ORG> was not appealed against and thus has become final and conclusive.

The Additional Chief Metropolitan Magistrate, on an application moved by the appellants, permitted the appellants to mark the copy of the order of the <ORG> dated 24.10.1996 in evidence at the appropriate stage of trial. It is also very useful, in the present context, to refer to the proceedings of the Income Tax Officer, City Ward-II (2), Chennai cancelling the penalty. One sample order reads thus:-

"GIR.No: 279-K/CW.II(2)/83-84 Dt: 27-1-97 Sub: Penalty under section 271(1)(c)  Asst. year 1983-84  in the case of <ORG>, 26, Nynar Nadar Road, Chennai  600 004  reg  Ref: I.T.A.T's Order in I.T.A.No: 3129 to 3132/Mds/90 dt. 24-10-1996. :O R D E R :

Giving effect to <ORG> Order in I.T.A.No: 3129 to 3132 the penalty levied under section 271 (1)(c) is hereby cancelled. U/s.271(1)(c), Rs.1,43,181/- is hereby cancelled."

Learned counsel appearing for the appellants cited the following decisions in support of his submissions at the time of hearing:-

The first in the series is the judgment in <NAME> & <ORG>. Vs. Income Tax Officer, Central Circle, Amritsar, (1982) 2 SCC 543. In this case, the registration was cancelled on the ground that the firm was not genuine and prosecution initiated for filing false return. The <ORG> rendered the finding that the firm to be genuine and on the basis of the finding of the <ORG>, this Court held that the prosecution must be quashed. The short judgment reads thus:-

"Heard counsel, special leave granted. In view of the finding recorded by <ORG> that it was clear on the appraisal of the entire material on the record that <NAME> 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.

There will be no order as to costs"

In the case of G.L. Didwania & Anr. Vs. Income Tax Officer & Anr. 1995 Supp(2) SCC 724, the prosecution was levelled against the assessee for making false statement. <ORG> held that the assessee had intentionally concealed his income derived from `Y' company which belonged to him, initiating prosecution against him. The appellant filed the appeal against the assessment order and the <ORG> set aside the assessment holding that there was no material to hold that `Y' company belonged to the assessee. The assessee thereupon filed a petition before the Magistrate to drop the criminal proceedings and the application before <ORG> under Section 482 to quash the criminal proceedings which were dismissed. On appeal, this Court held that the whole question was whether the appellant made a false statement regarding the income which according to the assessing authority had escaped assessment and so far as this issue was concerned, the finding of the appellate <ORG> was conclusive and hence the prosecution cannot be sustained. Accordingly, this Court quashed the criminal proceedings and allowed the appeal filed by the assessee.

The above judgment squarely applies to the facts and circumstances of the case on hand. In this case also, similarly, the application was moved by the assessee before the Magistrate to drop the criminal proceedings which were dismissed by the Magistrate and <ORG> also on a petition filed under Sections 397 and 401 of the Code of Criminal Procedure, 1973 to revise the order of the Additional Chief Metropolitan Magistrate has also dismissed the same and refused to refer to the order passed by the competent Tribunal. As held by this Court, <ORG> is not justified in dismissing the criminal revision vide its judgment ignoring the settled law as laid down by this Court that the finding of the appellate Tribunal was conclusive and the prosecution cannot be sustained since the penalty after having been cancelled by the complainant following the appellate Tribunal's order, no offence survives under the Income Tax Act and thus quashing of prosecution is automatic. In the instant case, the penalties levied under Section 271(1)(c) were cancelled by the respondent by giving effect to the order of <ORG> in I.T.A. Nos. 3129-3132. It is settled law that levy of penalties and prosecution under Section 276C are simultaneous. Hence, once the penalties are cancelled on the ground that there is no concealment, the quashing of prosecution under Section 276C is automatic.

In our opinion, the appellants cannot be made to suffer and face the rigorous of criminal trial when the same cannot be sustained in the eyes of law because the entire prosecution in view of a conclusive finding of <ORG> that there is no concealment of income becomes devoid of jurisdiction and under Section 254 of the Act, a finding of <ORG> supercedes the order of the Assessing Officer under Section 143(3) more so when the Assessing Officer cancelled the penalty levied. In our view, once the finding of concealment and subsequent levy of penalties under Section 271(1)(c) of the Act has been struck down by the <ORG>, the Assessing Officer has no other alternative except to correct his order under Section 154 of the Act as per the directions of the <ORG>. As already noticed, the subject matter of the complaint before this Court is concealment of income arrived at on the basis of the finding of the Assessing Officer. If the <ORG> has set aside the order of concealment and penalties, there is no concealment in the eyes of law and, therefore, the prosecution cannot be proceeded with by the complainant and further proceedings will be illegal and without jurisdiction. The Assistant Commissioner of Income Tax cannot proceed with the prosecution even after the order of concealment has been set aside by the <ORG>. When the <ORG> has set aside the levy of penalty, the criminal proceedings against the appellants cannot survive for further consideration. In our view, <ORG> has taken the view that the charges have been framed and the matter is in the stage of further cross-examination and, therefore, the prosecution may proceed with the trial. In our opinion, the view taken by the learned Magistrate and <ORG> is fallacious. In our view, if the trial is allowed to proceed further after the order of the <ORG> and the consequent cancellation of penalty, it will be an idle and empty formality to require the appellants to have the order of <ORG> exhibited as a defence document inasmuch as the passing of the order as aforementioned is unsustainable and unquestionable.

The same view as that of ours has been taken by this Court and the various other <ORG> in catena of decisions.

1. <CITATION> .  167 I.T.R. 880 "Held, that the penalty was based on the earlier assessment order wherein the amount representing cash credits was included. Since that order had been set aside and the cash credits deleted from the assessment, the consequent order of penalty had been rightly cancelled."

2. <CITATION> .  168 I.T.R. 846 "Held, that the orders of reassessment on the basis of which penalties were levied had been set aside by the <ORG>. Hence, the order of penalty could not stand by itself. The cancellation of penalty was justified."

3. <CITATION> .  174 I.T.R. 402 "Where penalty was imposed solely on the basis of an addition of Rs. 4 lakhs to the assessee's total income and the addition was deleted by the <ORG>: Held, that it was evident from the material on record that the penalty had been imposed solely on the basis of the addition of Rs. 4 lakhs to the assessee's income. If the addition was deleted, the charge of concealment of income could not be sustained. Imposition of penalty under section 271(1)(c) of the Income-tax Act, 1961, was, therefore, not valid."

4. <CITATION>  176 I.T.R. 189 "Penalty cannot stand on its own independently of the assessment. Where, in an appeal against the assessment reopened under section 147 of the Income-tax Act, 1961, <ORG> deleted the addition on account of deemed dividend under section 12(1B) read with section 2(6A)(e) of the Indian Income-tax Act, 1922, the deemed dividend which had been deleted could not form the subject-matter of imposition of penalty under section 271(1)(c) of the Income-tax Act, 1961, because, the basis for imposition of penalty had ceased to exist. Therefore, the <ORG> was correct in cancelling the penalty imposed on account of the addition."

5. <CITATION> .

[1990] 183 I.T.R. 59 "Held, that, in view of the conclusion reached by <ORG> that the amount in question was not assessable, there was no basis for the imposition of penalty. The cancellation of penalty was valid. [<ORG> has dismissed the special leave petition filed by the <ORG> against this judgment of <ORG> in relation to penalty under section 271(1)(c) arising out of an assessment, wherein the addition of a loan has been cancelled by <ORG> as reported in [ 1983] 144 ITR 352 : See [ 1990] 181 ITR (St.) 19-Ed.]

6. <CITATION>  189 I.T.R. 786 "Held, (i) that the fact a particular construction had not been shown in the accounts of the assessee was not relevant since this circumstance had not been recorded as one of the reasons for initiating the proceedings under section 147(a) ;

(ii) that the <ORG> had found, after examining the entire record, that there had been no failure to disclose primary facts on the part of the assessee. The reassessment was, therefore, not valid;

(iii) that penalty had been imposed consequential to the re-assessment. Since the reassessment had been set aside, the order of the <ORG> cancelling the penalty levied under section 271(1)(c) of the Act was also legal."

7. <CITATION>  200 I.T.R. 206 "Held, that the levy of penalty was based on the addition to income made by the Income-tax Officer. The addition was deleted by the <ORG>. Hence, the <ORG> was justified in cancelling the penalty."

8. <CITATION>  211 I.T.R. 470 "Held, dismissing the application for reference, that the <ORG> had set aside the penalty on the ground that the additions to income had already been deleted. Since there was no liability to tax, no penalty could be levied. The <ORG> was justified in cancelling the penalty and no question of law arose from its order"

The very recent judgment in the case of <CITATION> 2003 (4) SC 381,in which one of us (Dr. <NAME>J.) was a member, this Court while considering the scope of the immunity granted under the Kar Vivad Scheme - Whether criminal proceedings could be initiated in respect of declaration filed under the Scheme and accepted by <ORG> can proceed further with the prosecution and criminal conspiracy and cheating against the appellants therein. Allowing the appeals, this Court held that since the alleged criminal liability stood compounded on settlement with respect of the civil issues, the FIR was erroneous and unwarranted and, therefore, the continuation of the proceedings would tantamount to double jeopardy. This Court further held that the Collector of <ORG> had exonerated the appellants there was no warrant for any fresh investigation and prosecution on a matter which stood settled. Further since no prima facie case of cheating and criminal conspiracy was made out the process issued is liable to be quashed. It is to be noticed that as per the Kar Vivad Samadhan Scheme, 1998 whoever is granted the benefit under the said Scheme is granted immunity from prosecution from any offence under the <ORG> Act , 1962 including the offence of evasion of duty. In the circumstances, the complaint filed against the appellants is unsustainable. This Court further held that under the penal law, there is no concept of vicarious liability unless the said statute covers the same within its ambit. In that case, the appellants have been wholly discharged under the <ORG> Act , 1962 and the <ORG> granted immunity from prosecution.

In this instant case, the charge of conspiracy has not been proved to bring home the charge of conspiracy within the ambit of Section 120-B of I.P.C. It is also settled law that for establishing the offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or misrepresentation. From his making failure to keep up promise subsequently, such a culpable intention right at the beginning that is at the time when the promise was made cannot be presumed. As there was absence of dishonest and fraudulent intention, the question of committing offence under Section 420 of the I.P.C. does not arise. <ORG> without adverting to the above important questions of law involved in this case and examined them in the proper perspective disposed of the revisions in a summary manner and hence the impugned orders passed by <ORG> and the learned Magistrate warrant interference.

It is a well-established principle that the matter which has been adjudicated and settled by the <ORG> need not be dragged into the criminal courts unless and until the act of the appellants could have been described as culpable. For the aforesaid discussions and reasons adduced, the questions of law formulated above are answered accordingly and the appeals stand allowed.


JUDGMENT <NAME>, J.

1. These references under Section 256(1) of the Income-tax Act, 1961, are at the instance of the <ORG>. The reference in Tax Cases Nos. 61 and 62 of 1983 in which the assessees are full brothers and members of the bigger Hindu undivided family is in the same terms. Tax Case No. 9 of 1982, is a different case altogether. But although the reference is not in the same terms and the facts, naturally, also are not exactly the same, the controversy is one and the same in these cases. They have, as such, been heard together and are disposed of by this common judgment.

2. In Tax Case No. 9 of 1982, the material facts are as follows. The assessee's family consisted of himself, i.e., <NAME>, wife, two sons (including a minor son) and three daughters (including one minor and one married daughter). The assessee used to file returns in the status of a Hindu undivided family and was being assessed to income-tax as such. On the last date of the previous year relevant to the assessment year 1976-77, partial partition in the family took place. The capital standing in the name of the Hindu undivided family was partitioned amongst the members of the family, namely the assessee, his two sons, <NAME> and <NAME>, and wife, Smt. <NAME>. The assessee claimed that he should be assessed in the status of the Hindu undivided family because even after partition he had a legal obligation to maintain his wife and he along with his wife constituted the Hindu undivided family. The Income-tax Officer took the view that since the capital of the Hindu undivided family had been partitioned and the wife had also got share and there was none to claim any share in the property which had come into the hands of the assessee, his status would be that of individual. The Appellate Assistant Commissioner on appeal by the assessee reversed the finding of the Income-tax Officer. He held, following the decision of <ORG> in <NAME> v. CWT [1969] 74 ITR 190, that the assessee along with his wife continued to form a Hindu undivided family. <ORG>, on appeal by the <ORG>, affirmed the view of the Appellate Assistant Commissioner. It relied, besides <NAME>'s case [1969] 74 ITR 190 (SC), on <CITATION>  96 ITR 110 (Patna), Addl. <CITATION>  116 ITR 908 ( <CITATION>  124 ITR 310 (All). On an application by the <ORG>, the <ORG> referred the following question of law to this court for opinion :

"Whether, on the facts and in the circumstances of the case, the <ORG> was right in holding that the status of the assessee should be a Hindu undivided family ?"

3. The material facts of Tax Cases Nos. 61 and 62 of 1983 may be stated as follows. The assessees, namely, <NAME> and <NAME>, were members of a bigger Hindu undivided family. They were "kartas" of their respective Hindu undivided families consisting of self, wife and children. The Hindu undivided family derived share income from firms. Partial partition was effected in the bigger Hindu undivided family as a result of which the capital in various firms was divided. The Income-tax Officer noticed that as a result of the partial partition, the capital had been partitioned not only amongst the assessees and their respective children but also their wives. In other words, their wives too had received their share in the capital. The Income-tax Officer on these facts held that the income received by the assessees from the assets after partition was their individual income. He rejected the claim of the assessees that they be assessed as Hindu undivided families. The Appellate Assistant Commissioner held that with respect to the assets received by the assessees on partial partition, they continued to be Hindu undivided families with their wives. He relied on <NAME> case [1969] 74 ITR 190 (SC). <ORG>, on appeal by the <ORG>, concurred in the view of the Appellate Assistant Commissioner. It held that simply because the wife had also received a share on partial partition, it does not mean that he ceased to constitute a Hindu undivided family with the wife. What was received by the assessee on partial partition of the bigger Hindu undivided family was not his absolute property, it was subject to charge and claims of members who may be born or adopted in future. The income derived from the assets received on partial partition was, therefore, liable to be assessed in the hands of the assessees in the status of Hindu undivided family and not individual. The <ORG>, in coming to the conclusions, followed <NAME> case [1969] 74 ITR 190 (SC). It also referred to the cases of <CITATION>  78 ITR 26 ( <CITATION>  112 ITR 750 (SC). The main order was passed in the case of <NAME>. In the case of <NAME>, the <ORG> merely followed the said order. On an application by the <ORG>, however, it referred the following questions for opinion by this court ;

"(1) Whether, on the facts and the circumstances of the case, <ORG> was correct in law in holding that income from assets received on partial partition was liable to assessment in the hands of Sri Jainath Prasad/Sri Baijnath Prasad in the status of a Hindu undivided family consisting of himself and his wife and not in the capacity of an individual ?

(2) Whether, on the facts and in the circumstances of the case, an individual can form a Hindu undivided family with his wife in respect of the shares received by him on such partition in which the wife was also allotted a separate share and that share is used by her exclusively ?"

4. Mr. <NAME>, learned counsel for the <ORG>, submitted that where on partition shares are allotted to the members of the erstwhile Hindu undivided family, including wife, the existence of the Hindu undivided family comes to an end and the assessee can no longer be assessed in the status of a Hindu undivided family because the income accruing from the property allotted to his share belongs exclusively to him. He placed reliance on <CITATION>  101 ITR 776 (SC). He also referred to CWT v. Chander Sen  161 ITR 370 ( <CITATION>  148 ITR 141 ( <CITATION>  165 ITR 380 ( <CITATION>  166 ITR 789 ( <CITATION>  197 ITR 646 (SC) and Deputy Commissioner of Agrl. <CITATION>  209 ITR 531 (Ker).

5. Mr. <NAME>, learned counsel for the assessee, in Tax Case No. 9 of 1982 (assessees in Tax Cases Nos. 61 and 62 of 1983 were unrepresented) submitted that the partition in the family of the assessee did not mean that the wife became separate from the assessee, even though a separate share was allotted to her, and so far as the property allotted to the share of the assessee is concerned, the wife and, in fact, the children also would continue to have interest in that property and, therefore, the income therefrom in the hands of the assessee must be taxed in the status of Hindu undivided family. He further submitted that the property which is impressed with the character of joint family property does not cease to be so on partition. He placed reliance on <NAME> case [1969] 74 ITR 190 (SC) and CWT v. <NAME> [1974] 96 ITR 110 (Patna).

6. The dispute as to whether on partition the share coming into the hands of the assessee is to be taxed in the status of individual or Hindu undivided family has a rather long history. In <NAME> [1974] 96 ITR 110 {Patna), a person no less than <NAME> (as he then was) observed, "the point at issue is not free from difficulty". Starting from <CITATION>  5 ITR 90 (PC), a decision rendered by <ORG> in 1936, the question has been debated in a large number of cases in various <ORG> and <ORG>. But as is often said, each case is to be decided on its own facts.

7. Since <ORG> has heavily relied on <NAME> case [1969] 74 ITR 190 (SC) which, as a matter of fact, is the foundation of its decision, it would be only appropriate to know the ratio decidendi of that case. <ORG> in <NAME> case [1969] 74 ITR 190 observed that the expression "Hindu undivided family" in the Wealth-tax Act is used in the same sense in which a Hindu joint family is understood in the personal law of Hindus. Under the Hindu system of law a joint family may consist of a single male member and his wife and daughters and there is nothing in the scheme of the Wealth-tax Act to suggest that a Hindu undivided family as an assessable unit must consist of at least two male members. (The term "Hindu undivided family" is not defined under the Income-tax Act and, therefore, must have the same incidents and meaning as the one given to it in the context of the Wealth-tax Act ). Having said so the court observed (page 193) :

" The next question is whether the assets which came to the share of the appellant on partition ceased to bear the character of joint family properties and became the individual property in his hands. In this connection, a distinction must be drawn between the two classes of cases where an assessee is sought to be assessed in respect of ancestral property held by him : (1) where property not originally joint is received by the assessee and the question has to be asked whether it has acquired the character of a joint family property in the hands of the assessee, and (2) where the property already impressed with the character of joint family property comes into the hands of the assessee as a single coparcener and the question required to be considered is whether it has retained the character of joint family property in the hands of the assessee or is converted into absolute property of the assessee." (emphasis* added).

After quoting the observations of <ORG> in Attorney-General of Ceylon v. A. R. Arunachalam Chettiar [1958] 34 ITR (E.D.) 42 ; [1957] AC 540, that (page 196 of 74 ITR) : "it is only by analysing the nature of the rights of the members of the undivided family, both those in being and those yet to be born, that it can be determined whether the family property can properly be described as 'joint property' of the undivided family," <ORG> observed at page 197 of the Report that "though in the absence of male issue the dividing coparcener may be properly described in a sense as the owner of the properties, upon the adoption of a son or birth of a son to him, it would assume a different quality. It continues to be ancestral property in his hands as regards his male issue for their rights had already attached upon it and the partition only cuts off the claims of the dividing coparceners. The father and his male issue still remain joint. The same rule would apply even when a partition had been made before the birth of the male issue or before a son is adopted, for the share which is taken at a partition by one of the coparceners is taken by him as representing his branch. Again, the ownership of the dividing coparcener is such that female members of the family may have a right to maintenance out of it and in some circumstances, to a charge for maintenance upon it". On this a priori reasoning their Lordships concluded that when a coparcener having a wife and two minor daughters and no son receives his share of the joint family properties on partition, such property in the hands of the coparcener belongs to the Hindu undivided family of himself, his wife and minor daughters and cannot be assessed as his individual property.

The decision in N. V, Narendranath's case [1969] 74 ITR 190 (SC) does, at the first instance, seem to support the case of the assessees. There is, however, one salient fact which turns the tables against them. It is that in <NAME> case [1969] 74 ITR 190 (SC) no separate share had been allotted to the wife while in these cases, as noticed above, separate shares were allotted to the wives, besides the children. This is evident from the statement of fact at page 198 of the Report (in <NAME> case [1969] 74 ITR 190 (SC)) to the effect that "it is no doubt true that there was a partition between the assessee, his wife and minor daughters on the one hand and his father and brothers on the other hand."

8. It is clear that <ORG> was dealing with an entirely different qase. <ORG> appears to have been swayed by certain observations made in the judgment in <NAME> case [1969] 74 ITR 190 (SC) to the effect, for example, that to constitute a Hindu undivided family it is not necessary that there should be two male members. In <NAME> case [1969] 74 ITR 190 (SC), on partition, a share had been allotted to <NAME> who held the same on his own behalf as well as on behalf of his wife and minor daughters. In the present case, the fact that the wife has also been allotted a share, besides the children, makes all the difference. Dealing with a similar case, <ORG> in <CITATION>  148 ITR 141 held (page 143) :

"Had the wife not been allotted any share in the partial partition, the matter was simple and there would have been no difficulty in holding that the assessee and his wife constituted a Hindu undivided family."

9. <ORG> followed an earlier case in <NAME> v. CWT [1984] 148 ITR 139, wherein, on facts similar to those of the present case, <ORG> held that the decision of <ORG> in <NAME> case [1969] 74 ITR 190 had no application.

10. As noticed above, the expression "Hindu undivided family" is to be understood in the same sense as it is understood in the ordinary Hindu law. In <NAME>'s Hindu Law and Usage (page 575, 13th edition) it has been stated :

"Property which a man takes at a partition will be his separate property as regards those from whom he has severed but will be ancestral property as regards his own male issue. So too, family property vested in the last surviving male member of a coparcenary will be his separate property subject to its becoming at any moment coparcenary property when he has male issue or when an adoption is made to him or to a predeceased coparcener in the family, and subject to the right of maintenance of the other female members of the family. . ."

11. Mulla's Hindu Law (paragraph 223(4), page 248, 16th edition) states:

" The share which a coparcener obtains on partition of an ancestral property is ancestral property as regards his male issue. They take an interest in it by birth, whether they are in existence at the time of partition or are born subsequently. Such share, however, is ancestral property only as regards his male issue. As regards other relations, it is separate property, and if the coparcener dies without leaving male issue, it passes to his heirs by succession."

12. In <NAME> Hindu Law, Principles and Precedents, the law has been stated in paragraph 260 at page 222 (8th edition) in these words--

" The share in the ancestral estate which a coparcener gets on partition with his co-sharers is his separate property as against the coparceners from whom he separates, though as against his own male issue who are born after partition or who were born before but who do not get themselves separated from him the property has still the character of ancestral property in which they take an interest by birth,"

13. It is evident from the above statements of law that on the date partition is effected between the assessee and his father and/or brothers or even the son, the property coming into his hands is deemed to be a separate property though liable to become a joint family property when a son is born subsequently or an adoption is made. It may also have the trappings of a joint family property on account of a right to maintenance available to female members of the family. Such is not the case here. In both Tax Case No. 9 of 1982 and Tax Cases Nos. 61 and 62 of 1982, not only the children but the wives also had got separate shares on partition. No son was subsequently born or adopted. The wives having already been allotted shares, they could not claim a right of maintenance and, therefore, had no charge on the property. In such a situation, the property coming into the hands of the assessees must be held to be their separate property and income derived therefrom by them must be assessed in the status of individual and not Hindu undivided family.

14. In <NAME> case [1974] 96 ITR 110 (Patna), relied upon by counsel for the assessee, the family of the assessee at the time of partition consisted of self and wife. It does not appear from the said judgment that there was only inter se partition between the husband and wife. In that view <ORG> correctly, if I may say so, followed and applied the ratio of the decision in <NAME> case [1969] 74 ITR 190 (SC) and held that the assessee should be assessed as Hindu undivided family and not as an individual. This case too, therefore, has no application in the present case.

15. No case has been cited by counsel for the assessee or referred to in the orders of <ORG> taking the view that even where on partition a separate share is allotted to the wife, income from the property coming into the hands of the husband is to be taxed as Hindu undivided family. The <ORG> mainly relied on <NAME> case [1969] 74 ITR 190 (SC), but the facts of <NAME> case [1969] 74 ITR 190 (SC) being different and distinguishable, as indicated hereinabove, the ratio of the decision is of no avail to the assessee in these cases. As <ORG> itself observed in that case (passage quoted above), where the property already impressed with the character of joint family property comes into the hands of the assessee as a single coparcener, the question which is required to be considered is whether it has "retained" the character of joint family property in the hands of the assessee or is converted into his absolute property. I have no hesitation in holding that in these cases on account of allotment of the separate share of the wife and in the absence of any son--born or adopted subsequently--the property did not retain the character of joint family property. It rather "acquired" the character of separate property in the hands of the assessees and income therefrom was liable to be assessed to tax in the status of individual. I may usefully quote the following observations of <ORG> in <CITATION>  97 ITR 493, wherein their Lordships while considering the case of a single individual claiming the status of a Hindu undivided family for the purposes of taxation observed (page 497) :

"In view of the above, it cannot be denied that the appellant at present is the absolute owner of the property which fell to his share as a result of partition and that he can deal with it as he wishes. There is admittedly no female member in existence who is entitled to maintenance from the above-mentioned property or who is capable of adopting a son to a deceased coparcener. Even if the assessee-appellant in future introduces a new member into the family by adoption or otherwise, his present full ownership of the property cannot be affected."

16. In view of what has been stated above, it is unnecessary to deal with the cases cited by Mr. <NAME>. More so, because the facts of those cases were different. In fairness to counsel, however, I would very briefly refer to them.

17. In <NAME> [1975] 101 ITR 776 (SC) (heavy reliance was placed on this case), the assessee had a wife and one unmarried daughter and no son. His wife and unmarried daughter were entitled to be maintained by him from out of the income of a certain "<ORG>" which was the separate property of the assessee. On January 26, 1956, the assessee made a declaration that he had thrown the said property into family hotchpot and he would be holding the same as "karta" of the joint family property consisting of himself, his wife and unmarried daughter in order to impress the property with the character of joint family property. The question was whether income received by the assessee from the property was to be assessed in the status of a Hindu undivided family. <ORG> rejected the assessee's contention. The court observed in that connection that until a son is born to him the personal law of the assessee regarded him as the owner of the property and income therefrom as his income even after the property was thrown into the family hotchpot. It may appear that the observation "until a son is born" is at a tangent with the observation in <NAME> case [1969] 74 ITR 190 (SC) that "there is no warrant for the contention that there must be at least two male members to form a Hindu undivided family as a taxable unit". These observations, however, have to be understood in the fact situation of the two cases. In <NAME> case [1969] 74 ITR 190 (SC) the property was a joint family property of a bigger Hindu undivided family in which the assessee along with wife and daughters got shares on partition. They together constituted a Hindu undivided family. The existence of another male member was not necessary. In <NAME>'s case [1975] 101 ITR 776 (SC) there was no partition. The property was self-acquired pro-perty of the assessee which was sought to be impressed with the character of joint family property on the basis of a "declaration" that it was being thrown in the family hotchpot. It was held that without a son there cannot be joint Hindu family and the character of the property does not become joint family property.

18. In the case of <NAME> [1987] 166 ITR 789 (Patna), the facts were similar to those of the case of <NAME> [1975] 101 ITR 776 (SC). The property belonged exclusively to the assessee who later claimed the same as belonging to the Hindu undivided family on the basis of a declaration that he had thrown it in the family hotchpot. This court, following <NAME>'s case [1975] 101 ITR 776 (SC), held that the property was the individual property of the assessee and could not be taxed in the status of Hindu undivided family.

19. <NAME> [1986] 161 ITR 370 (SC) was the case of a father dying intestate after partition between himself and the son. The property devolving on the son on his death was held to be his individual property and not the property of the Hindu' undivided family. The case of <NAME> [1992] 197 ITR 646 (SC) falls in the same class of cases.

20. In <NAME> [1987] 165 ITR 380 (Patna) [FB], the assessee had acquired some shares in a company on a partial partition of the Hindu undivided family. Later he acquired some immovable property and filed returns in the status of the individual for a number of years and was assessed as such. On marriage, he claimed the status of a Hindu undivided family. On these facts, the Full Bench of this court held that the status of an individual assessee governed by Hindu law would not automatically change to that of a Hindu undivided family under the Income-tax Act .

21. In <NAME> [1994] 209 ITR 531 (Ker) the assessee along with son obtained property on partition of the bigger Hindu undivided family. Subsequently, there was a partition between the assessee and the son. It was held that the property belonged to the assessee as an individual.

22. It would thus appear that all these cases were decided on different set of facts, and, strictly speaking, do not have much relevance in these cases. The plea of the <ORG> none the less has to be accepted as already indicated above.

23. The law so far as relevant for the purpose of these cases may be summarised thus. On a partition of a bigger Hindu undivided family the property coming into the hands of the assessee becomes his separate property vis-a-vis other coparceners although it continues to be joint visa-vis his wife and children and he continues to constitute a Hindu undivided family with them, i.e., his wife and children, and, in the absence of the children, with the wife alone. But where on partition separate shares are allotted not only to the children but also to the wife, the existence of the Hindu undivided family comes to an end. And the property in the hands of the assessee becomes separate property and the income therefrom is liable to be taxed in the status of individual until another son is born or adopted in future.

24. In the above premises, the <ORG> was not correct in holding that the assessees should be assessed in the status of a Hindu undivided family. The questions referred for the opinion of this court are accordingly answered in the negative, that is, in favour of the <ORG> and against the assessees. I will make no order as to costs.

25. Let a copy of this judgment be sent to <ORG>, <ORG>, Patna.

<NAME>, J.

26. I agree.


JUDGMENT

1. In the circumstances stated we think there can be no doubt that Article 12(a) of the Limitation Act cannot properly be applied to the suit brought by the plaintiff.

2. Whatever was the intention of the parties who took part in the execution sale, that transaction could not affect the title of the plaintiff, and therefore It was not necessary for him to have the sale set aside.

3. We cannot agree with the decision in <NAME> v. <NAME> (1888) I.L.R. 7 M., 258 which was also a case of a sale in execution of a decree.

4. In accordance with the opinion expressed by <ORG>, <ORG> (The Chief Justice and Mr. Justice <NAME>) set aside the decree of the lower appellate Court and remanded the appeal for disposal in accordance with law.