2002 (8) TMI 19 - HC - Income Tax

Offences - Prosecution - Charge under section 278B - The contention of counsel for the applicants is that the penal provision, i.e., section 276E of the Act, has been removed from the statute by an amendment dated April 1, 1989, by the Direct Tax Laws (Amendment) Act, 1987. In the case on hand, the complaint against the applicants was filed only a day before the said omission. - In the present case, no saving clause, has been prescribed in the Amendment Act. Therefore, applying the dictum as held by the Supreme Court, present prosecution against the applicants is not permissible for imposing punishment under section 276E of the Act. Therefore, the orders passed by the appellate court dated August 18, 1999, passed in Criminal Appeal No. 69 of 1995 remanding the case back as well as the judgment dated June 27, 1995, delivered in Criminal Case No. 02 of 1986, are liable to be set aside and the same are, accordingly, set aside. However, the Income-tax Department is free to proceed against the applicants under section 271E of the provisions of the Direct Tax Laws (Amendment) Act, 1987.

Summary

The High Court of Madhya Pradesh allowed a criminal revision stating that the applicants cannot be prosecuted under sections 269T and 278B of the Income-tax Act, 1961, as section 276E had been omitted by an amendment. The court set aside previous judgments and allowed the Income-tax Department to proceed under section 271E of the Direct Tax Laws (Amendment) Act, 1987. The applicants were entitled to a refund of any fine deposited.