RAMASWAMY T S Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This is a petition under S.561A of the Code of Criminal Procedure filed for quashing the proceedings in C. C. No. 336 of 1971 on the file of the District Magistrate's Court, Quilon , initiated a the instance of the Income Tax Officer under S.27/ of the Indian Income Tax Act, 1961, hereinafter referred to as the new Act.

(2.) The facts leading to the prosecution relevant for consideration in this case are as follows: The petitioner is a partner in Union Engineering Company. Quilon, a firm registered under the new Act. On 18-3-1962 one of the partners, the father of the other partners died and a new partnership came into being on 18-9-1962. For the assessment year 1961-62, corresponding to the accounting year ending with 31-5-1960, the petitioner herein submitted a return on 29 5 1962 showing an income of Rs. 23,947/-. The Income Tax Officer called for the accounts of the firm for scrutiny. On examination he detected some suppression. He found that the accounts disclosed only utilisation of two tonnes of tin plates while on 14 5 1960 there was a release of 24.5 tonnes of tin plates from the key loan at the Bank. The balance of 22.5 tonnes plates was not accounted for in the closing stock and therefore he issued notice to the assessee calling for an explanation. The assessee gave an explanation which was not acceptable to the Income Tax Officer. The Income Tax Officer finalised the assessments on the basis of a revised return submitted by the firm for the year 1961-62. Ultimately, the taxable income was computed at Rs. 50.205/- which approximated to the taxable income returned by the assessee as per the revised return. The Income Tax Officer initiated penalty proceedings against the petitioner and a penalty of Rs. 20,000/- was imposed, which on appeal was reduced to Rs. 13,000/-. The petitioner filed an application under S.66(1) of the Indian Income Tax Act, 1922, hereinafter referred to as the old Act, for stating a case to this Court, which was however dismissed. Thereafter, the assessee filed O. P. No. 3188 of 1969 under S.66(2) of the old Act. This Court directed the Tribunal to state a case. While this original petition was pending, the Income Tax authorities took proceedings under S.277 of the new Act by filing a complaint before the District Magistrate's Court, Quilon. The gist of the charge against him was that he delivered on 29-5-1962 to the Income Tax Officer, Quilon, a profit and loss account and a balance sheet showing the value of closing stock at Rs. 9,450/- and a total income at Rs. 23,947/- which was false and which he knew to be false or did not believe it to be true and has therefore committed an offence punishable under S.277 of the new Act. On receipt of notice of this complaint, the petitioner filed O. P. No. 6468 of 1971 to quash that notice. The O. P. was dismissed in limine by this Court. A writ appeal filed against that decision also met with the same fate but the Division Bench directed that the petitioner will be at liberty to move this Court with an application under S.561A Cr.P.C. Hence this petition.

(3.) Various contentions were raised before this Court by the learned counsel for the petitioner. I am here concerned only with the question whether there is any legal bar for the prosecution before the District Magistrate's Court either under the new Act or under the old Act.