1972 (10) TMI 29 - HC - Income Tax

This is a petition under section 561-A of the Code of Criminal Procedure filed for quashing the proceedings in C.C. No. 336 of 1971 on the file of the District Magistrate s Court Quilon initiated at the instance of the Income-tax Officer under section 227 - assessee filed his return of income after 1st April 1962 for the AY 1961-62 - assessment was made under Income-tax Act 1961 and penalty was levied for concealment - Whether prosecution under section 277 of Income-tax Act 1961 is possible and whether section 28(4) of Indian Income-tax Act 1922 would be applicable

Summary

Issues:
1. Petition filed for quashing proceedings in C.C. No. 336 of 1971 under section 561-A of the Code of Criminal Procedure.
2. Legal bar for prosecution under the new Act or the old Act.
3. Protection under section 28(4) of the old Act.
4. Imposition of penalty under the old Act or the new Act.
5. Validity of prosecution under section 277 of the new Act.

Detailed Analysis:

The judgment by the High Court of Kerala, delivered by Judge V. Khalid, pertains to a petition filed for quashing the proceedings in C.C. No. 336 of 1971 under section 561-A of the Code of Criminal Procedure. The petitioner, a partner in a registered firm, was facing prosecution initiated by the Income-tax Officer under section 227 of the Income-tax Act, 1961. The main contention raised was regarding the legal bar for prosecution under the new Act or the old Act.

A crucial aspect of the case was the protection provided to the assessee under section 28(4) of the old Act, which states that no prosecution shall be instituted for an offence if a penalty has been imposed for the same facts. The court analyzed the provisions of the new Act, which repealed the old Act, and classified assessees based on the date of assessment completion for penalty proceedings. It was highlighted that the imposition of penalty under the new Act would not invoke the protection under section 28(4) of the old Act.

Furthermore, the judgment delved into the validity of the prosecution under section 277 of the new Act. The petitioner argued that the prosecution was invalid as the statement in question was made under the old Act. However, the court emphasized that the offense under section 277 encompassed false statements or accounts made under the new Act or any rules thereunder, indicating that the prosecution was not barred under either the old or new Act.

In conclusion, the court dismissed the criminal miscellaneous petition, stating that the prosecution was not barred under any provisions of the old Act or the new Act. The judgment underscored that the trial magistrate would determine whether an offense had been committed, emphasizing that there was no merit in quashing the proceedings.

Overall, the judgment provided a detailed analysis of the legal provisions governing the prosecution in question and clarified the applicability of the relevant sections under the old and new Income-tax Acts.