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Issues involved:
The judgment involves the interpretation of instructions issued by the Government of India regarding the prosecution under section 276B of the Income-tax Act, 1961, in cases where tax has been deposited after a default. The main question is whether these instructions can exempt an assessee from prosecution under the Act. Facts and Decision: The Income-tax Officer filed a complaint against a company for not deducting income tax at source for certain years, making them liable for punishment under section 276B of the Act. The company later deducted and deposited the tax, but prosecution was initiated after several years. The company argued that Government instructions exempted them from prosecution if the amount involved was not substantial and had been deposited. The Department contended that statutory provisions override such instructions and prosecution is at the discretion of the officer. The court examined the instructions which stated that prosecution should not normally be proposed in certain circumstances. It held that when conditions for exemption from prosecution are met, authorities cannot exercise discretion to prosecute, as it would violate constitutional principles. The court found no inconsistency between the statute and the instructions, noting that the latter provide exceptions in limited cases. It cited previous judgments emphasizing that statutory provisions prevail over instructions. Ultimately, the court allowed the petitions and quashed the complaints against the company, considering the insignificant amount involved and the prolonged pendency of the case. Conclusion: The High Court of Punjab and Haryana, in the judgment delivered by V. K. BALI J., allowed the connected Criminal Miscellaneous Petitions and quashed the complaints against the company, emphasizing the importance of following statutory provisions over departmental instructions in matters of prosecution under the Income-tax Act, 1961.
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