C.S. Projects India Private Limited Vs ITO (Madras High Court)
Material Facts: The petitioners, who were facing trial in C.C. No. 2958 of 2025 for an offence under Section 276C(1) of the Income-tax Act, 1961, filed a petition seeking quashing of the criminal proceedings.
For Assessment Year 2012-13, the first petitioner filed its income tax return on 24.05.2013 declaring a total income of ₹29,88,480. Following scrutiny, the Assessing Officer completed the assessment under Section 143(3) by order dated 31.03.2015, determining total income at ₹80,04,299. The assessment included additions of ₹37,15,819 towards alleged unproven liabilities/cessation of liability and ₹13,00,000 towards alleged unexplained cash credit under Section 68.
Consequently, penalty proceedings under Section 271(1)(c) were initiated. By order dated 28.09.2015, a penalty of ₹15,49,889, being 100% of the tax sought to be evaded, was levied.
Procedural History
The petitioners challenged the penalty before the Commissioner of Income Tax (Appeals)-3, Coimbatore in ITA No. 268/15-16. By order dated 18.08.2016, the CIT(A) dismissed the appeal and confirmed the penalty.
The petitioners thereafter appealed before the Income Tax Appellate Tribunal in I.T.A. No. 3240/Chny/2017. By order dated 19.03.2021, the Tribunal allowed the appeal and deleted the penalty in its entirety.
Subsequently, a criminal complaint under Section 276C(1) was filed against the petitioners, leading to the present quash petition.
