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Issues involved:
1. Quashing of criminal proceedings under sections 276C(2), 278 of the Income-tax Act, 1961, and sections 120B, 420 of the Indian Penal Code based on allegations of issuing false medical certificates to evade tax. Analysis: The High Court of Madras addressed the issue of quashing criminal proceedings against the petitioners, Dr. Kishwar Banu and Dr. N. Kannan, filed by the Income-tax Officer for offenses under various sections of the Income-tax Act and the Indian Penal Code. The petitioners sought to quash the proceedings, arguing that the allegations were vague and not sustainable as they were primarily based on the statement of the first accused, which should not be considered substantive evidence. The petitioners contended that the prosecution failed to establish inducement for making false statements related to tax chargeability, as required by section 278 of the Income-tax Act. The defense emphasized that the confession of a co-accused should not be the basis for conviction, citing a relevant judgment. The defense counsel, Mr. Vikram Ramachandran, argued that there was insufficient material against the petitioners to justify criminal proceedings. He referenced a judgment stating that a co-accused's statement alone cannot be substantial evidence against other accused individuals. In contrast, the Special Public Prosecutor, Mr. Ramasamy, cited previous authorities to support the prosecution's position that the allegations constituted offenses and should not be quashed solely based on the initial complaint. The court carefully considered both sides' submissions and acknowledged that a co-accused's statement alone is not adequate for conviction, as highlighted by the defense counsel. However, the court noted that the complaint contained specific averments against both accused individuals. The complaint detailed how the first accused obtained a false medical certificate from the second accused to claim tax deductions improperly, leading to a reduced tax liability. The court found that the allegations in the complaint, including conspiracy to cheat the Income-tax Department and abetting tax evasion, were specific and required further examination during trial. The court emphasized that the petitioners could raise their arguments during the trial proceedings and, therefore, dismissed the petitions, stating that the allegations were maintainable for trial. In conclusion, the High Court of Madras dismissed the criminal original petitions and related applications, indicating that the allegations in the complaint were specific and required a trial to determine the validity of the charges brought against the petitioners. The court highlighted the need for a detailed examination of the evidence and arguments during the trial stage rather than at the quashing petition level.
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