Law:

Section:

Sections 276C and 277 of the Income-tax Act, 1961, read with sections 120B, 193 and 196 of the Indian Penal Code, 1860 and section 195 of the Code of Criminal Procedure, 1908 - Offences and prosecutions - Wilful attempt to evade tax, etc. - Assessment years 1975-76 and 1976-77 - ITO, having found that certain deposits and current accounts maintained by partnership in a bank were not disclosed in returns filed as well as in its balance sheet, recorded statement of its managing partner who had signed those returns, and on that basis filed complaints against partnership firm, its managing partner and other partners - Meanwhile, reassessment made by ITO was set aside by Tribunal - Whether in view of fact that returns had been filed by managing partner and all statements had been made solely by him, complaint filed against other partners was liable to be struck down - Held, yes - Whether fact that ITO was not declared to be a Court, prior to amendment of section 136 with retrospective effect, would not stand in way of ITO filing a complaint - Held, yes - Whether reassessment order having been set aside by Tribunal, it would not be proper to proceed with trial - Held, yes Section 136 of the Income-tax Act, 1961 - Proceeding before ITO to be Judicial proceeding - Whether amendment of section 136 with retrospective effect was proper and valid - Held, yes FACTS After the assessments of the first respondent being a partnership firm for the assessment years 1975-76 and 1976-77 were completed it was discovered that the firm had a fixed deposit and a current account with a bank which, together with the interest received, were neither disclosed in the books of account of the firm nor in the returns filed. The current account opening form showed that the application for opening the account in the name of the firm was signed by all the partners. On being examined, the managing partner admitted that the fixed and current accounts belonged to the firm and this fact was not recorded in the firm's books. The ITO passed reassessment order, which was, however, set aside by the Tribunal ultimately. In the meantime, a complaint was filed by the ITO under sections 120B, 193 and 196 of…

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