2003 (4) TMI 46 - HC - Income Tax

Offence under sections 276C and 277 of the Income-tax Act - This revision has been filed by the complainant, namely, the Income-tax Officeragainst the orders passed by the Judicial Magistrate, discharging the accused of offence under section 245(2) of the Code of Criminal Procedure - the orders passed by the Judicial Magistrate No.2, Coimbatore, have to be necessarily set aside and the matter is remanded back to the trial court for proceeding as per law - the revisions are allowed.

Summary

Issues:
1. Discharge of accused under section 245(2) of the Code of Criminal Procedure.
2. Validity of prosecution based on authorization for complaint filing.
3. Legality of launching prosecution despite acceptance of assessment order.

Analysis:
1. The High Court addressed the issue of discharging the accused under section 245(2) of the Code of Criminal Procedure. The case involved a firm engaged in chit funds and money-lending, which failed to deduct tax at prescribed rates from interest payable to depositors as per the Income-tax Act, 1961. The prosecution alleged conspiracy, forgery, and use of false documents under sections 276C and 277 of the Income-tax Act. The Court found prima facie evidence of these offenses and set aside the orders discharging the accused, remanding the matter back to the trial court for further proceedings.

2. The Court examined the validity of the prosecution based on authorization for complaint filing. The respondents contended that the prosecution was invalid as the complaint was filed by an officer not initially authorized. However, the Court held that under section 18 of the General Clauses Act, 1897, the successor of an authorized officer can proceed with a complaint if the original officer relinquishes office. Therefore, the Court found no illegality in the complaint when a successor officer represented the complainant.

3. Another issue addressed was the legality of launching prosecution despite the acceptance of the assessment order by the appellate authority. The Court noted that while the appellate authority accepted the assessment order, it did not question the bona fides of the depositors or suspect forgery. However, subsequent investigations by income-tax authorities revealed prima facie evidence of forgery and conspiracy. As a result, the Court concluded that the prosecution could proceed, setting aside the orders discharging the accused and directing the trial court to expedite the proceedings.

In conclusion, the High Court allowed the revisions, emphasizing the need for the trial court to proceed with the case in accordance with the law. The accused were granted the opportunity to present their claims during the trial, ensuring a fair and expedited resolution of the matter dating back to 1986.