LAL SARAF Vs. STATE OF BIHAR

JUDGEMENT

(1.) THE application is for quashing the entire criminal prosecution initiated against the petitioner in Complaint Case No. 68 of 1986 under Section 276CC of the Income-tax Act, 1961, presently pending before the Special Court (Economic Offences), Muzaffarpur.

(2.) ONLY such of the facts as are necessary for disposal of the application need be stated. The Income-tax Officer, O.P. No. 2, filed a complaint alleging that on September 20, 1980, the residential and business premises of the petitioner were searched under Section 132(1) of the Income-tax Act, 1961 (hereinafter "the Act"). In the course of search a large number of incriminating books of account including duplicate sets of books were seized by the officers of the Department. On a scrutiny of the books of account seized, it was detected that the accused had income from other sources and he had not disclosed his true income to the Department and had been evading payment of taxes. As there was concealment of substantial income for the assessment year 1983-84 a notice under Section 139(2) of the Act was issued against the accused. The due date for filing the return of income was June 30, 1983. The accused filed the return of income on December 17, 1985, i.e., long after the expiry of the due date for filing the return for the assessment year 1983-84. The complainant thereafter charged the accused for having miserably failed to furnish the return by the due date for his income which he was required to file under Sub-section (2) of Section 139 and Section 148 of the Act, which was an offence punishable under Section 276CC of the Act. The complaint was filed after obtaining the sanction order of the Commissioner of Income-tax as required under Section 279(1) of the Act.

(3.) THE complaint petition does not contain the most important averment that the notice was issued and served on the petitioner before the end of the relevant assessment year, i.e., by the 31st March, 1984. In its absence, the notice would not be a legal and valid notice under Section 139(2) of the Act and the prosecution of the petitioner under Section 276CC of the Act on that ground was thus not competent in the eye of law.