GENERAL FINANCE COMPANY Vs. ASSISTANT COMMISSIONER OF INCOME TAX PUNJAB
SUPREME COURT OF INDIA
GENERAL FINANCE COMPANY
ASSISTANT COMMISSIONER OF INCOME TAX
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Rajendra Babu, J. -
(1.)The appellants before us received deposits from Amar Singh, Gurdev Singh and Hardev Singh on different dates in the year 1985 and this fact was disclosed in the Income-tax Return filed for the assessment year 1986-87. The Income-tax Department initiated prosecution against the appellants for offences arising from non-compliance with Section 269-SS of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). Section 269-SS of the Act provides that 'no person shall take or accept from any other person any loan or deposit otherwise than by an account-payee cheque or account-payee bank draft which exceeds Rs. 10 thousand' (now 20 thousand). Punishment for non-compliance with provisions of Section 269-SS is provided under Section 276-DD of the Act. In addition, penalty is leviable under Section 271-D of the Act. Section 276-DD has been omitted from the Act by the Direct Tax Laws (Amendment) Act, 1987 with effect from 1-4-1989. A complaint under Section 276-DD of the Act was filed in the Court of Chief Judicial Magistrate, Sangrur on 31-3-1989.
(2.)The appellants sought for quashing of the proceeding for prosecution under Section 276-DD of the Act by filing a petition under Section 482 of the Code of Criminal Procedure and Article 227 of the Constitution. The High Court held that the provisions of the Act under which the appellants had been prosecuted were in force during the accounting year relevant to the assessment year 1986-87 and they stood omitted from the statute book only from 1-4-1989. The High Court, therefore, took the view that the prosecution was justified and dismissed the writ petition. Hence, this appeal by special leave.
(3.)The contention put forth on behalf of the appellants is 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 276-DD of the Act after it was omitted on and from 1-4-1989. Section of the General Clauses Act cannot also be applied to save the action now taken.
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