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Issues involved: The judgment involves issues related to the prosecution of the respondent under sections 276C(1) and 277 of the Income-tax Act, 1961, based on allegations of filing a false return of income to evade tax, the acquittal of the respondent by the Chief Judicial Magistrate, and the appeal filed by the Income-tax Officer challenging the acquittal.
Prosecution Proceedings: The Income-tax Officer filed a complaint against the respondent for offenses under sections 276C(1) and 277 of the Income-tax Act, alleging that the respondent filed a false return of income to evade tax. The Chief Judicial Magistrate acquitted the respondent, citing lack of proof of sanction by the Commissioner of Income-tax under section 279(1) of the Act and the setting aside of the penalty imposed on the respondent by the Commissioner of Income-tax and the Income-tax Appellate Tribunal. Proof of Sanction: The Chief Judicial Magistrate acquitted the respondent due to the lack of formal proof of sanction by the Commissioner of Income-tax under section 279(1) of the Act, despite the proceedings of the Commissioner being filed along with the complaint. The court held that the production of the document authorizing prosecution is sufficient for judicial notice, and no formal proof through oral evidence is required for a public document. Presumption of Truth from Account Books: The respondent's counsel argued that the court should consider the closing stock as per the account books seized, citing a presumption of truth of entries. However, the court noted that the presumption can be rebutted, and the respondent's explanation of duplications and damaged goods in the inventory was considered. The court also highlighted that the penalty proceedings against the respondent were quashed by the Commissioner of Income-tax and the Income-tax Appellate Tribunal. Appellate Tribunal's Finding: The appellant contended that the Appellate Tribunal's finding does not bar prosecution proceedings, citing legal precedents. However, the court emphasized that the evidence did not prove that the respondent filed a false return knowingly. Referring to previous cases, the court highlighted the importance of independent judgment by the criminal court and the relevance of findings in related proceedings. Conclusion: The court dismissed the appeal, agreeing with the Chief Judicial Magistrate that the respondent is not liable to be convicted, as the evidence did not establish that the respondent filed a false return knowingly. The judgment emphasized the need for independent assessment by the criminal court and considered the findings of related proceedings in reaching the decision.
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