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TMI Blog2007 (6) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, Chennai, as per the entry made in the abovesaid party's ledger folio on April 17, 1986. The accused had admitted in her sworn statement given before the Assistant Director of Inspection (Investigation) on April 23, 1986, about the abovesaid borrowal of Rs. 4,65,000 from the abovesaid political party. According to the prosecution as per section 26955 of the Income-tax Act, 1961, a person can obtain any loan or deposit only through an account payee cheque or an account payee bank draft if the amount of loan exceeds Rs. 10,000. Since the loan obtained by the accused which is above Rs. 10,000 was not by way of account payee cheque or account payee bank draft, according to the prosecution, there is a violation of section 26955 of the Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent therein is the present accused Kumari A. B. Shanthi. When the above said Crl. A. No. 601/1992 was pending before the honourable apex court, a direction was given by the honourable apex court in Crl. M. P. No. 5557/1992 in Crl. A. No. 601/1992, dated July 26, 1993, to the effect that the substantive sentence in E. O. C. C. No. 207 of 1986 shall not be given effect to until further orders from the honourable apex court. The learned trial judge after due consideration of the evidence both oral and documentary placed before him has come to the conclusion that the charges levelled against the accused under section 276DD read with section 269SS of the Income-tax Act have been proved beyond any reasonable doubt and accordingly co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Direct Tax Laws (Amendment) Act, 1987, which came into force with effect from April 1, 1989. Relying on the ratio of the honourable apex court in General Finance Co. v. Asst. CIT [2002] 257 ITR 338 (SC) ; AIR 2002 SC 3126, learned counsel for the revision petitioner would contend that after the omission of section 276DD from the Income-tax Act, 1961 by the Direct Tax Laws (Amendment) Act, 1987, a prosecution cannot be launched or continued for the violation of the provisions under section 269SS of the Income-tax Act. The short facts of the abovecited case are that: "The appellants viz. General Finance Company and another had received deposits from one Amar Singh, Gurdev Singh and Hardev Singh on different dates in the year 1985 and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave. The contention put forward by the appellants before the honourable apex court was that the offence, if at all, had been committed in the year 1985 prosecution could not be continued nor could the punishment be imposed under section 276DD of the Act after it was omitted on and from April 1, 1989. After hearing learned counsel appearing on both sides and also referring to two earlier decisions rendered by the Constitution Benches of the honourable apex court in Rayala Corporation P. Ltd. v. Director of Enforcement, AIR 1970 SC 494 and Kolhapur Canesugar Works Ltd. v. Union of India, AIR 2000 SC 811, wherein it has been held that section 6 of the General Clauses Act applies to a repealed law and not to omission, ultimately rendered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right to initiate proceedings for liabilities incurred during the currency of the Act, will not apply to omission of a provision in an Act but only to repeal, omission being different from repeal as held in the aforesaid decisions. In the Income-tax Act, section 276DD stood omitted from the Act but not repealed and hence, a prosecution could not have been launched or continued by invoking section 6 of the General Clauses Act after its omission." Learned counsel appearing for the revision petitioner relying on the above observation would contend that the initiation of proceedings under section 269SS of the Act against the revision petitioner itself is not maintainable after the omission of section 276DD of the Act as per the Direct Tax Law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the trial court in E. O. C. C. No. 207 of 1986 on the file of the Additional Chief Metropolitan Magistrate EO-II, Egmore, the honourable apex court has passed an order in Crl. M. P. No. 5557 of 1992 in Crl. A. No. 601 of 1992 directing the trial court to the effect that the substantive sentence shall not be given effect to until further orders. There was no direction given by the honourable apex court to stay the proceedings in E. O. C. C. No. 207 of 1986 before the trial court. In fact Crl. A. No. 601 of 1992 was preferred by the Assistant Director of Inspection (Investigation) of the Income-tax Department against the order passed by the learned judge of this court in a petition filed by the accused under article 227 of the Constitut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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