Rajesh Dayal Khare - (1.) HEARD Sri RK. Jain, learned counsel for the applicants and Sri Shambhu Chopra, learned Senior Standing Counsel appearing for the Department of income Tax.
(2.) THE present application under Section 482 Cr.P.C, has been filed for quashing the proceedings of Criminal Complaint Case No. 326 of 1989 Union of India through Assistant Commissioner of Income Tax Circle-I Meerut v. M/s. Saral Housing and General Finance (P) Ltd. and another, pending before learned Special Chief Judicial Magistrate, District Kanpur. Learned counsel for the applicants states that the applicant No. 1 is the Private Limited Company duly registered under the Companies Act and is engaged in the business of Hire Purchase Finance of which the applicant No. 2 is the Managing Director. It is further contended that a complaint was filed by the Assistant Commissioner of Income Tax Circle-I, District Meerut on 26.7.1986 on the ground that in the assessment proceedings for the Assessment Year 1986-87 it was noticed that during the financial year, the applicant No. 1 in the knowledge of the applicant No. 2 repaid the deposits/loan in cash, in contravention to the provisions of Section 269-T of the Income Tax Act, 1961 and made the payment of Rs. 17,000/- in cash. It is further contended that the provisions of Section 269-SS of Income Tax Act which was incorporated in the statue to prevent evasion of tax and it was provided that no cash payment in excess of Rs. 10,000/- can be made by any registered company which provision was violated by the applicants. It is argued on behalf of the applicants that in the present case, there was no intention to evade any tax inasmuch the deposits was received from a genuine party whose identity was established and financial position was well known and the deposits was fully proved, therefore, there is no question of any tax evasion. It is thus, contended that there is no violation of Section 269SS of the Income Tax Act and no proceedings under Section 276DD could have been drawn against the applicant under the said Act. It is further argued that the provisions of Section 276DD has been omitted/deleted with effect from 1.4.1989 and in view of the said omission/deletion no prosecution under Section 276DD of the Act would be continued, therefore the present proceedings against the applicants are liable to be quashed. Learned counsel for the applicants has relied upon a Judgment of Hon'ble Apex Court ,in M/s. General Finance Co. and another v. Assistant Commissioner of Income Tax, Punjab, JT 2002 (6) SC 426, as well as Judgment of this Court rendered in Criminal Misc. Application No. 7508 of 1990 in the matter of M/s. Satish Chand Sushil Kumar and othersv. Stateof U.P. and another, in support of his contention.
(3.) IN view of the submissions made by learned counsel for the parties as well as considering the fact that the provisions of Section 276DD of the INcome Tax Act has been deleted/omitted with effect from 1.4.1989, therefore no prosecution can be permitted to continue against the applicants as per the settled law as laid down by the Hon'ble Apex Court as well as this Hon'ble Court and the present application under Section 482 Cr.P.C, deserves to be allowed. For the reasons discussed above, the present application is allowed.;