Law:

Section:

section 276C of the Income-tax Act, 1961 - Offences and prosecutions - Willful attempt to evade tax - Assessee had filed its return of total income and assessment was completed on basis thereon - Later on, on basis of documents seized, assessee filed a revised return - Gross profit rate was enhanced and additions were made in its total income as undisclosed income - Thereafter, an order was issued for taking cognizance for offences under sections 276C and 277 of 1961 Act and under section 420 of the Indian Penal Code, against assessee - Whether in absence of any patent point of law such an order of cognizance could be said to be bad in law - Held, no Facts The assessee-firm for the relevant assessment year had filed a return on a total income of Rs. 4,447. But the original assessment was completed on a total income of Rs. 1,09,163. Thereafter, the assessee filed a revised return enhancing the figures of sales and purchases. The said return was filed at the instance of the department when a search and seizure had been conducted by the commercial taxes department. It was found that many of the transactions were not recorded in the books of account, correct statement had not been made regarding the purchases and the stock found at the premises of the assessee which was completely-different from the stock shown in the stock register. Further, a Takada Bahi and loose sheets had also been seized which had previously not been produced before the ITO on the plea that they had been lost. On the basis of documents seized by the Sales Tax Department, the Income-tax Department had enhanced the gross profit rate and also made additions under the head 'Undisclosed income' on account of undisclosed investment in undisclosed sales. It indicated that the assessee had not filed correct returns at all and had tried to evade taxes. On the basis of this complaint an order was issued for taking cognizance for the offences under sections 276C and 277 of the 1961 Act and under section 420 of the Indian Penal Code. On writ petition against the said order : Held In the instant case, in absence of any patent point of law, the impugned order of cognizance could not be said to be bad in…

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