Law:

Section:

Section 279 read with section 271(4A) of the Income-tax Act, 1961 - Offences and prosecution - Prosecution to be at instance of Chief Commissioner/Commissioner - Whether protection contained in section 279(1A) is applicable only when Commissioner for reasons mentioned in section 271(4A), reduces penalty in favour of assessee and where reduction was by Tribunal and not by Commissioner benefit conferred under section 279(1A) was not available - Held, yes - Whether in view of provisions of section 2 of Economic Offences (Inapplicability of Limitation) Act, 1974, bar of limitation specified in section 468 of Code of Criminal Procedure, 1973, will not apply to prosecution under Act - Held, yes FACTS The 2nd accused acting for the firm, filed a return before the ITO. It was discovered that there was concealment of income to the tune of more than Rs. 20,000. Penalty proceedings were, therefore, initiated, on being satisfied that the petitioner had concealed particulars of their income as contemplated under section 271(1)(c). Notices were issued to the petitioners directing them to pay penalty as provided for under section 271(1)(iii). Thereafter, a complaint was filed by the ITO, before the Chief Judicial Magistrates Court under section 277 of 1961 Act and sections 193 and 196 of the Indian Penal Code. The first accused was a firm and accused Nos. 2 to 7 were its partners. It was stated that the complaint had been filed at the instance of the Commissioner after obtaining the authorisation under section 279. The petitioners filed an application before the Court below under section 245(2) and 482 for their discharge, on the ground that the cognizance of offence under sections 193 and 196 of the Penal Code was barred under section 468(2)(c) of the Code. The Chief judicial Magistrate passed an order, overruling the objections raised by the petitioners. It was this order that was virtually in challenge in the instant revision petition. HELD The contention raised on behalf of the petitioners was the prosecution under section 277 was barred, since it was hit by section 279(1A). This argument could not stand since the protection contained in section 279(1A) is applicable only…

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