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Issues:
1. Constitutionality of sections 277 and 279 of the Income-tax Act. 2. Jurisdiction of the Settlement Commission during criminal proceedings. 3. Timing of criminal proceedings in relation to penalty proceedings. Constitutionality of Sections 277 and 279: The petitioner challenged the constitutionality of sections 277 and 279 of the Income-tax Act, claiming that they grant excessive discretion to the Commissioner of Income-tax. However, the judge cited a previous Supreme Court decision upholding a similar provision in the Act of 1922, stating that the provisions in question cannot be deemed unconstitutional based on this precedent. Jurisdiction of Settlement Commission vs. Criminal Court: The petitioner argued that the criminal court should not proceed with the trial while the matter is pending before the Settlement Commission. The judge clarified that Chapter XIX-A of the Act, which deals with settlement provisions, does not automatically stay other proceedings. As the Settlement Commission had not issued any order to halt the criminal complaint, the Magistrate was obligated to continue with the trial. Timing of Criminal Proceedings and Penalty Proceedings: The petitioner contended that criminal proceedings should not commence until penalty proceedings are concluded. However, the judge referred to a Supreme Court decision stating that there is no legal provision preventing the initiation of prosecution under sections 276C or 277 of the Income-tax Act until reassessment proceedings are finalized. Consequently, this argument was dismissed. In conclusion, the court found no merit in the petitioner's arguments and dismissed the writ petitions without imposing any costs. The judgment emphasized the legal provisions and precedents governing the issues raised, ultimately upholding the legality of sections 277 and 279 of the Income-tax Act and affirming the jurisdiction of the criminal court in the absence of a stay order from the Settlement Commission.
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