1970 (6) TMI 2 - HC - Income Tax

Challenge to the order committing the petitioner for trial to the Sessions Court in respect of charges under sections 276(d) and 276B - on the ground that the charge under section 276B is violative of article 20(1) of the Constitution of India and that the charge under section 276(d) is not otherwise sustainable

Issues Involved:
1. Validity of charges under Section 276B of the Income-tax Act, 1961, in light of Article 20(1) of the Constitution of India.
2. Sustainability of charges under Section 276(d) of the Income-tax Act, 1961.
3. Competence of the District Magistrate to take cognizance of the complaints.
4. Evidence proving the petitioner as the principal officer of the company.
5. Validity of the complaints filed by the Income-tax Officer instead of the Commissioner of Income-tax.

Detailed Analysis:

1. Validity of Charges under Section 276B:
The petitioner argued that the charge under Section 276B is violative of Article 20(1) of the Constitution of India, which prevents retroactive punishment. Section 276B, which mandates a minimum punishment of rigorous imprisonment and fine, was added on April 1, 1968. The petitioner contended that offenses committed before this date should not be prosecuted under this section due to the constitutional protection against ex post facto laws. The court noted that the offenses prior to April 1, 1968, could not be prosecuted under Section 276B as it would violate Article 20(1). However, the court did not make a final determination on whether the offense was a continuing one that could be prosecuted under Section 276B.

2. Sustainability of Charges under Section 276(d):
The petitioner contended that the deletion of "Chapter XVIIB or" from Section 276(d) by the Finance Act of 1968 made prosecution under this section unsustainable for offenses committed after April 1, 1968. The court agreed that Section 276(d) was defunct after this date but noted that non-compliance with Sections 194 and 200 of the Act before April 1, 1968, could still be prosecuted under Section 276(d). The court also considered whether the offense was a continuing one, which would allow prosecution under the old provisions even after the amendment.

3. Competence of the District Magistrate:
The petitioner argued that the District Magistrate was not competent to take cognizance of the complaints under Section 276(d) for non-payment of tax deducted at source. The court found that a prima facie case had been made out and that the lower court was correct in committing the petitioner for trial to the Sessions Court. The court cited the case of Thakurdas Kimatrai v. State, emphasizing that it would not be expedient to allow the accused to raise an academic point of law at this stage.

4. Evidence Proving the Petitioner as Principal Officer:
The petitioner contended that there was no evidence proving he was the principal officer of the company as required by Section 2(35) of the Act. The court found sufficient prima facie evidence, including Exhibit P-2 and the testimony of P.W.-1, the Income-tax Officer, which indicated that the petitioner was the managing director and principal officer. The court noted that the petitioner did not raise this issue in his grounds for revision.

5. Validity of Complaints Filed by Income-tax Officer:
The petitioner argued that the complaints should have been filed by the Commissioner of Income-tax as required by Section 279 of the Act. The court found that the Commissioner had given written authority to the Income-tax Officer to file the complaints, which was sufficient compliance with the statutory requirement. The court cited T. S. Baliah v. Rangachari, affirming that the prosecution was sustainable.

Conclusion:
The court dismissed all the revision petitions, holding that the committal order passed by the lower court was justified. The court found that a prima facie case was made out against the petitioner under the relevant sections of the Income-tax Act, 1961, and that the prosecution was validly instituted. The issues regarding the applicability of Article 20(1) and the competence of the District Magistrate were also resolved in favor of the prosecution.

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