Punjab-Haryana High Court
General Finance Co. And Anr. vs Assistant Commissioner Of Income-Tax on 6 May, 1994
JUDGMENT
A.S. Nehra J.
1. Messrs. General Finance Company, Patiala Gate, Sangrur, is a registered firm. Petitioner No. 2 is the managing partner of the firm. The Assistant Commissioner of Income-tax, Circle II(I), Ludhiana, filed a complaint against the petitioners under Section 276DD read with Section 278B of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The complaint was filed on the allegations that the petitioners submitted their income-tax return on July 25, 1986. It is further alleged that Messrs. General Finance Company is accused No. 1, whereas Shri Bhagwant Singh, its managing partner, is accused No. 2 and, as a managing partner during the assessment year 1986-87, he was responsible for the conduct of the business of the firm during that period. It is further alleged that accused No. 1 provides finance to the transporters for which it accepts deposits from various persons and derives income from difference in interest paid to the depositors and the interest charged from the transporters and loans are provided after the loanees endorse the registration of vehicles financed by the accused-firm in its favour. It is further stated in the complaint that the accused-firm filed its return of income along with the statement of accounts and documents for the assessment year 1986-87 on July 25, 1986, duly signed and verified by its managing partner, accused No. 2. It is further alleged that the assessment was completed by the complainant on February 22, 1989. During the assessment proceedings, the then Income-tax Officer observed that the accused had accepted the following deposits exceeding Rs. 10,000 otherwise than by account payee cheques or account payee bank drafts from the following depositors and had thus violated the provisions of Section 269SS of the Act :
Sl. No. Name of depositor Amount Date of deposit Rs.
1.
Shri Amar Singh, s/o 40,000 28-11-1985 Shri Partap Singh, r/o 10,000 30-11-1985 Bauran Gate, Nabha
2. Shri Gurdev Singh, s/o 20,000 5-7-1985 Shrj Jagir Singh, V. and P. O. Sohian, Tehsil, Jagraon
3. Shri Hardev Singh, 32,000 13-5-1985 Shri Phuman Singh, r/o Village Jhamat, Tehsil, Ludhiana
2. It is further stated in the complaint that the Income-tax Officer sought explanation from the accused-firm by issuing a show-cause notice dated May 18, 1987, as to why prosecution may not be launched against the accused for contravention of the provisions of Section 269SS of the Act. It is further alleged in the complaint that the accused were not able to show any reasonable cause or excuse for their failure to comply with the mandatory provisions of law and, therefore, they were liable to be prosecuted under Section 276DD read with Section 278B of the Act.
3. The present petition has been filed under Section 482 of the Code of Criminal Procedure for quashing the complaint, annexure P-1, and other proceedings arising therefrom pending in the Court of the Chief Judicial Magistrate, Sangrur. It is alleged that, after April 1, 1989, violation of the provisions of Section 269SS was no more penal and the Assistant Commissioner of Income-tax has wrongly filed the complaint.
4. Notice of this petition was given to the respondent. A written statement has been filed on behalf of the respondent. It is stated in the written statement that petitioner No. 1 is a registered firm and petitioner No. 2 was a partner of the firm ; that the Assistant Commissioner of Income-tax, the respondent, lodged the complaint against the petitioners in the Court of the Chief Judicial Magistrate, Sangrur, on the ground that the petitioner-firm filed its return of income along with the statement of accounts and documents for the assessment year 1986-87 on July 25, 1986, that the assessment was completed on February 22, 1989, in which it was found that the petitioner-firm had accepted cash exceeding Rs. 10,000 from Sarvshri Hardev Singh, Gurdev Singh and Amar Singh, that, therefore, the petitioner-firm had violated the provisions of Section 269SS of the Act and are liable to be prosecuted under Section 276DD read with Section 278B of the Act. It has been stated in paragraph 5 of the written statement that the contention of the accused that the learned Chief Judicial Magistrate was not competent to take cognizance of this case as Section 276DD of the Act had been deleted from the Act with effect from April 1, 1989, is not correct, because of the fact that the offence was committed by the accused during the assessment year 1986-87 relevant to the period from April 1, 1985 to March 31, 1986. It is further submitted in the reply that during the assessment year in question, the relevant provision of the Act under which the accused have been prosecuted was in force and the accused are being prosecuted in accordance with the provisions prevailing at the time of commission of the offence. Learned counsel for the petitioners has contended that the contravention of the provisions of Section 269SS of the Act was punishable under Section 276DD of the Act but Section 276DD of the Act was omitted with effect from April 1, 1989, and that, at the time when the complaint was filed, the violation of the provisions was no longer penal and the complaint filed by the Assistant Commissioner of Income-tax is not maintainable. However, this contention of learned counsel for the petitioners does not hold good. It is correct that Section 276DD of the Act was omitted with effect from April 1, 1989, but the contravention was alleged to have been made by the petitioners in the year 1985. Unless a different intention appears, the repeal does not affect, inter alia, any investigation, legal proceedings or remedy in respect of any such right, privilege, obligation, liability, penalty, etc. Prima facie, it was open to the Assistant Commissioner of Income-tax to launch prosecution in respect of acts or omissions committed during the period the provisions of the repealed or unamended sections were operative. Section 276DD of the Act was in operation at the time the payments were alleged to have been accepted by the petitioners and subsequent repeal of the section will not exonerate the petitioners of the violation, if any, committed by them. The allegations made in the complaint prima facie make out a case against the petitioners. No ground for quashing the complaint is made out and I find that the petition is without any merit and the same is hereby dismissed.