1975 (3) TMI 3 - SC - Income Tax

In the revised returns the total income shown was far greater than what was shown in the earlier returns - penalty was levied in respect of each return under section 271(1)(c)(iii) - complaints against the appellant alleging commission of offence by him under section 277 - whether institution of the prosecution against the appellant for the alleged commission of offences by him under either the 1961 or the 1922 Act was bad in law as being violative of section 28(4) - Assessee s appeal dismissed

Summary

Issues:
1. Interpretation of section 28(4) of the 1922 Act and its impact on the institution of prosecution under the 1961 Act.
2. Application of section 297(2) of the 1961 Act in relation to penalty imposition and prosecution initiation.
3. Examination of article 20(1) of the Constitution regarding prohibition of ex post facto laws and penalties.
4. Analysis of the legal implications of the repeal of the 1922 Act on prosecution under section 52 and section 277.

Issue 1:
The court deliberated on whether the institution of prosecution against the appellant for alleged offenses under the 1961 or the 1922 Act was lawful, considering section 28(4) of the 1922 Act. The High Court held that as no penalty was imposed under section 28 of the 1922 Act, the prosecution was not barred. The court emphasized that section 28(4) did not apply to penalties imposed under section 271(1) of the 1961 Act, allowing the prosecution to proceed.

Issue 2:
The court analyzed section 297(2) of the 1961 Act, which provided for savings in penalty imposition proceedings. It was noted that since all assessments were completed after the enforcement of the 1961 Act, penalty proceedings were initiated under the 1961 Act. The court highlighted that clause (f) did not apply, and penalty imposition under the 1922 Act did not occur, thus not invoking the bar under section 28(4).

Issue 3:
Article 20(1) of the Constitution was examined in the context of prohibiting ex post facto laws and penalties exceeding those applicable at the time of the offense. The court emphasized that the penalty imposed under section 271 of the 1961 Act did not violate article 20(1) as it was not retrospective. The court clarified that the penalty did not nullify the offense committed under the 1922 Act, allowing prosecution under the 1961 Act.

Issue 4:
The court addressed the implications of the repeal of the 1922 Act on prosecution under section 52 and section 277. It was observed that no saving provision existed for prosecution under section 52 of the 1922 Act in the 1961 Act. However, the court applied section 6 of the General Clauses Act to maintain criminal liability under the repealed section 52. The court dismissed all appeals, affirming the legality of the prosecution under the 1961 Act and the continuation of proceedings under the repealed section 52.