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TMI Blog1987 (3) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... ration is whether the allegations in the complaint constitute the offence. Assessment of income-tax for the years 1977-1978 and 1978-1979 were completed and the income-tax outstanding and payable were respectively Rs. 7,28,354 and 6,38,796. The properties of the petitioner including two air-conditioned theatres were attached for the arrears after issue of notice under rule 2 of Schedule II by the Tax Recovery Officer after the certificate has been received by him from the Income-tax Officer for recovery of the arrears. In violation of the prohibition contained in rule 16 of Schedule II and the provision that transactions thereafter will be void, the petitioner executed two gift deeds in 1983 regarding the only two unencumbered items of im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lter. Section 276C of the Income-tax Act reads: " 276C. Wilful attempt to evade tax, etc.-(1) If a person wilfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable, (i) in a case where the amount sought to be evaded exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine; (ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine. (2) If a person w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " avoid " payment of income-tax which is not made punishable and what is made punishable is only " evading " payment of any tax as distinguished from " avoiding " payment of the same which is not punishable. I do not think that there is any merit in this contention. At this stage, we are concerned only with the question whether the allegations in the complaint, if taken as correct, will constitute an offence punishable under section 276C(2) of the Income-tax Act or not. Whether the offence was actually committed or not is not a matter for consideration in a proceeding under section 482 to quash the complaint. That is a matter for evidence during the trial by the Magistrate. Learned counsel for the petitioner relied on the Explanation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But the law will not tolerate such an evasion of the Act if it amounts to positive fraud on the Act, such an evasion having no legal foundation. If such evasion is in conscious violation of the penal provisions, the penalty is definitely attracted. Sub-sections (1) and (2) of section 276C deal with two different situations. Sub-section (1) deals with 'evasion of tax, penalty or interest chargeable or imposable under the Act'. Therefore, evidently, what is contemplated is evasion before charging or imposing tax, penalty or interest. That may include wilful suppression in the returns before assessment and completion. But sub-section (2) deals with evading 'the payment of tax, penalty or interest under the Act'. The words 'chargeable' or 'i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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