1986 (1) TMI 81 - HC - Income Tax

Summary

Issues:
1. Impugned order of cognizance under section 276C of the Income-tax Act
2. Barred by limitation as per section 468 of the Code of Criminal Procedure
3. Delay in filing complaint and condonation under section 473 of the Code
4. Failure to produce evidence and delay in prosecution

Analysis:

1. The judgment concerns an application against an order of cognizance passed under section 276C of the Income-tax Act. The petitioners were alleged to have contravened section 139(1) of the Act, punishable under section 276C. The prosecution was sanctioned by the Commissioner of Income Tax, Bihar, under section 279(1) of the Act. The petitioners challenged the cognizance order, claiming it was barred by limitation under section 468 of the Code of Criminal Procedure.

2. The petitioners argued that the cognizance was time-barred as per section 468 of the Code, which was resisted by the Income-tax Department citing the Economic Offences (Inapplicability of Limitation) Act, 1974. The court noted that the allied Act came into force on April 1, 1974, and the cognizance in this case was taken before that date. The court highlighted the importance of considering limitation issues in such cases to uphold principles of natural justice.

3. The complaint acknowledged a delay in filing and requested condonation under section 473 of the Code. However, the court observed that there was no indication that the Magistrate had considered the condonation request or the limitation issue. The court emphasized the necessity of addressing these matters to ensure fairness and adherence to statutory obligations. The delay in the prosecution process, including the failure to produce evidence for several years, was also noted.

4. The court expressed concern over the prolonged prosecution spanning 12 years without witness examination for a significant period. Despite granting multiple chances, the complainant failed to produce evidence, leading to a delay in the legal proceedings. The court criticized the lack of examination of vital issues like limitation and emphasized the need for a fair trial. Ultimately, considering the circumstances, the court allowed the application, setting aside the criminal prosecution and the order of cognizance against the petitioners.