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TMI Blog1968 (2) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Act, 1922, and under section 177, Indian Penal Code. The fourth complaint, which is in respect of the assessment year 1961-62, was filed under section 277 of the Income-tax Act of 1961 and under section 177, Indian Penal Code. The revision petitioner raised preliminary objection before the learned Chief Presidency Magistrate in respect of the first three complaints on the grounds that the complaint under section 177, Indian Penal Code, was not maintainable in law as the operation of section 177, Indian Penal Code, was excluded to cases relating to income-tax matters, that the prosecution under section 52 of the Income-tax Act, 1922, will also not apply as it was repealed by the Income-tax Act of 1961 and that the sanction given by the Inspecting Assistant Commissioner of Income-tax was invalid. In the fourth complaint, an additional ground was taken that section 277 of the Income-tax Act of 1961 is invalid and ultra vires of the Constitution of India and in excess of the administrative competence and opposed to article 14 of the Constitution. The learned Chief Presidency Magistrate dismissed the petitions holding that the points of law raised by the petitioners we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and rupees, or with both " were substituted for the words "be deemed to have committed the offence described in section 177 of the Indian Penal Code. "Before the amendment, section 52 by its deeming clause adopted the offence under section 177, Indian Penal Code ; but after amendment, it has created a substantive offence under the Act with the same punishment as provided under section 177, Indian Penal Code. Though section 177, Indian penal Code, and section 52 of the Income-tax Act of 1922 appear to be substantially the same, the former is wider in its scope whereas the latter confines only to the matters mentioned in the said sections Section 177, Indian Penal Code, deals with the offence mentioned therein generally making any false information furnished by a person who is legally bound to give such information to any public servant, an offence, whereas section 52 of the Income-tax Act of 1922 confines itself in respect of false information furnished in the verification submitted by the assessee to the Income-tax Officer. It does not include even any false information furnished by an assessee in any proceeding under the Income-tax Act other than the verification mentioned in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act in respect of certain matters, no prosecution call be instituted by virtue of the provisions under section 28(4) of the Income-tax Act in respect of the same matters whereas there is no such bar under section 177, Indian Penal Code. It is contended that both the provisions cannot co-exist as they are repugnant to each other. Before we consider this aspect, it may be necessary to consider whether Parliament intended to repeal section 177, Indian Penal Code, by enacting section 52 of the Income-tax Act. Both are Central Acts. It is very significant to note that the later enactment does not expressly repeal section 177, Indian Penal Code. In the absence of an express repeal, the courts do not lean in favour of an implied repeal. The court will always be against the repeal of an earlier statute when the Legislature has not expressly done so unless the court finds that the provisions of the two enactments are wholly incompatible or that the two statutes together would lead to wholly absurd consequences. In this context, it will be worthwhile to note the passage at page 344 of Craies on Statute Law (5th edition) quoting Dr. Lushington in " The India ", (1864) 33 L.J. Adm. 193, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of enforcing effectively the provisions of the said Act. The Indian Penal Code is a penal statute whereas the Income-tax Act is fiscal and deals with revenue. Can it be said in this background, that section 52 of the Income-tax Act, though it creates an offence similar to that of section 177, Indian Penal Code, but narrower in scope, takes away the entire subject-matter provided under section 177, Indian Penal Code? The object and the purpose of the two enactments being different and the offence under one enactment being wider than the other, I am of the view that it would not have been intended by the later enactment to repeal the earlier. That this could not have been the intention of the Legislature can be gathered from some of the provisions of the Income-tax Act itself, as, for instance, in cases where penalty is levied in respect of certain matters provided in section 28(4) of the Act, the prosecution is barred in respect of the same matter under that Act. If the intention of the Legislature was that the prosecution would be barred even under any other enactment like the Indian Penal Code in respect of the same matter, it could have said so specifically that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermining whether there would be repeal by implication in the particular case before the court. In Smith v. Benabo, it was held that section 75 of the General Paving Metropolis Act, 1817, was impliedly repealed by sections 122 and 123 of the Metropolis Management Act, 1855. There also the subject-matter of both the enactments was the same. These decisions, in my opinion, do not support the contention of the petitioner. The learned counsel also relied upon a decision of the Supreme Court in Harish Chandra v. State of Madhya Pradesh. The point that arose in that case was whether the extension of the Essential Supplies (Temporary Powers) Act, 1946, and the Indian Scrap Order of 1943 to Madhya Bharat repealed the Madhya Bharat Essential Supplies (Temporary Powers) Act, 1948, and the Madhya Bharat Scrap Control Order. Here also, the subject matter of the Central Act and the State Act was substantially the same. But the Supreme Court held that the State Act was repealed by the Central Act as the provisions were not identical and could not, therefore, stand together. The Supreme Court pointed out that there were marked differences between the provisions of the two orders and found that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 177, Indian Penal Code, is triable by a Presidency Magistrate, a Magistrate of the First Class or Second Class, whereas the offence under section 52 cannot be tried by a Second Class Magistrate unless specially empowered by the Central Government ; and (4) if a penalty is levied under the Income-tax Act, the prosecution for any offence under that Act relating to the same matter for which the penalty has been levied will be barred. It has been already noted that there was no difference either in the procedure to be adopted in respect of trial of both these offences or in the matter of punishment. These differences, in my opinion, are not at all inconsistent or repugnant to each other. If the offence under section 52 of the Income-tax Act is compoundable, that may not be a reason to say that a person cannot be prosecuted under section 177, Indian Penal Code, since it is not compoundable. There cannot be any dispute that a person can be prosecuted under both the enactments if the facts disclosed the offences provided under the said enactments. If, for instance, in the present case, it is shown that the offence under the Income-tax Act was compounded, that may be a defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in respect of the matters mentioned in section 28 of the Act, by virtue of clause (4) of the said section, no prosecution for an offence against that Act could be instituted in respect of the same facts. Even here, I do not find any inconsistency between the provisions of the two enactments. The prosecution under this Act will be barred if penalty is levied. It can be defended in a prosecution under section 177, Indian Penal Code, and section 52 of the Income-tax Act that the prosecution under section 52 is barred because of the imposition of penalty and, if true, the result would be that the prosecution under section 52 could be dropped ; but still, the prosecution under section 177, Indian Penal Code, would continue. As already noted, it is very significant to note that section 28(4) has barred the prosecution in respect of an offence under that Act, namely, the Income-tax Act. Section 28(4) of the Act runs as follows : " No prosecution for an offence against this Act shall be instituted in respect of the same facts on which a penalty has been imposed under this section. This provision does not, therefore, bar a prosecution for an offence under any other Act in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute are regarded as cumulative or alternative and not as replacing the penalty to which the offender was previously liable. Maxwell on the Interpretation of Statutes, 10th edition, at page 186, states : " It would seem that an Act which (without altering the nature of the offence, as by making it felony instead of misdemeanour) imposes a new kind of punishment, or provides a new course of procedure for that which was already an offence, at least at common law, is usually regard as cumulative and as not superseding the pre-existing law." In page 369 of Craies on Statute Law it is stated thus : " Subsequent Acts of Parliament in the affirmative, giving new penalties and instituting new modes of proceeding, do not repeal former methods and penalties ordained by preceding Acts without negative words." In Om Prakash v. State of U. P. in dealing with the point whether the Prevention of Corruption Act, 1947, repealed section 409, Indian Penal Code as far as public servants are concerned, it was observed that the legislature would not have intended in the normal course of things that a temporary statute like the Prevention of Corruption Act should supersede an enactment of antiquit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings under the earlier Act were not saved and that, therefore, the prosecution under section 52 of the repealed Act is unsustainable. Section 297(1) of the Income-tax Act, 1961 repealed expressly the Income-tax Act, 1922, and, under clause (2), the matters referred to in clause (2)(a) to (m) have been saved notwithstanding the repeal of the Income-tax Act, 1922. It was contended that under clause (2) of section 297, the prosecution in respect of proceedings pending on the commencement of the Act of 1961 is not expressly saved and, therefore, it must be presumed that the legislature had not intended to save prosecutions in respect of proceedings pending at the commencement of the said Act. Section 6 of the General Clauses Act is as follows: " Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention the repeal shall not-- (a) revive anything not in force or existing at the time at which the repeal takes effect ; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder ; or (c) affect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from the new enactment. Of course, the consequences laid down in section 6 of the Act will apply only when a statute or regulation having the force of a statute is actually repealed." It has, therefore, to be considered whether the repeal and the saving clause under clause (2) of section 297 has in fact destroyed the right to institute prosecution in respect of proceedings which were pending at the commencement of the Act. A careful scrutiny of the provisions will indicate that it was not the intention of the legislature to take away the right of instituting prosecution in the circumstances aforesaid. Section 297(2)(a) says that : " Where a return of income has been filed before the commencement of this Act by any person for any assessment year, proceedings for the assessment of that person for that year may be taken and continued as if this Act had not been passed. " The question is whether the words " proceedings for the assessment of that person for that year " are so comprehensive, so as to include even the proceedings in respect of prosecution. I am of the view that the words are comprehensive in the context and that would include every proceeding till the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not saved. The High Court held that "penalty" was not saved as it was not expressly provided and, according to the High Court, what was saved was levy, assessment and collection of income-tax. The Supreme Court dissented from the view of the High Court and held that this will include "penalty" also and that the proceedings for imposing a penalty could be continued even though it was not specifically saved. It was contended by the learned counsel that section 297(2)(f), saves any proceeding from the imposition of a penalty in respect of any assessment completed before the 1st day of April, 1962, and that, therefore, when penalty has been specifically saved, if the Legislature had intended to save prosecutions also, it could have specifically said so. I am unable to agree with the contention of the learned counsel. The institution of prosecution is a necessary action to be taken for the purpose of levy, assessment and collection of the tax including penalty. If, on the other hand, the legislature intended to exclude and to destroy the right to institute prosecution, it could have excluded such right expressly and specifically. The institution of prosecution is only a last resort ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the saving clause. Thus, offences during the continuance of a statute can be prosecuted and punished even after its repeal as the repealing Act had not obliterated the offences committed when the earlier statute was in force. I am, therefore, of the view that the prosecution under section 52 of the Income-tax Act, 1922, is not taken away by the repealing Act and the prosecution under that section is competent and sustainable in law. It was also contended by the learned counsel that the repealing Act had provided under section 279 of the said Act that the Commissioner of Income-tax alone could sanction prosecution for the offence under section 277 of the new Act, and that the prosecution in the present cases was sanctioned by the Inspecting Assistant Commissioner which would be invalid. There is no substance in his argument. It is clear that under section 53(1) of the old Act, the Inspecting Assistant Commissioner can institute prosecution under section 52 of the said Act ; but whereas, under the new Act, the Commissioner alone can institute prosecution under section 277 of the new Act which is similar to the offence under section 52 of the old Act. At the commencement of the new A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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