Law:

Section:

Section 276DD [omitted with effect from 1-4-1989], read with section 269SS of the Income-tax Act, 1961 - Offences and prosecutions - Failure to comply with provisions of section 269SS - Whether prosecutions which were permissible under section 276DD and had already been initiated before insertion of new section 271D, which provided only for penalty and not prosecution, were erased and obliterated after omission of section 276DD with effect from 1-4-1989 - Held, no Interpretation of statutes - Repeal of provisions of Income-tax Act, 1961 - Effect of FACTS The petitioners had received in cash various deposits on several dates as evidenced by cash book entries which amounted to contravention of the provisions of section 269SS. Prosecutions had been initiated in 1985 against the respective petitioners by the respondent alleging violation of the provisions of section 269SS of the Act, punishable under section 276DD. On writ, the single ground urged by the petitioners was (i) that, with effect from 1-4-1989, section 271D had been introducted in the Act while omitting section 276DD with effect from the same date; (ii) that section 271D imposes only a penalty for violation of section 269SS and prosecutions for such violation had been done away with; (iii) that, therefore, after the introduction of section 271D, prosecutions could no longer be maintained, especially when the earlier section 276DD had merely been repealed without any saving clause to sustain the pending prosecutions : HELD The petition had no merit and was liable to be dismissed. It is, no doubt, true that after the introduction of section 271D with effect from 1-4-1989, only penalty can be imposed and prosecutions are not feasible for contravention of the provisions of section 269SS. It cannot also be disputed that before the introduction of section 271D, prosecution was permissible under section 276DD and no penalty as such departmentally was provided. These prosecutions were initiated in 1985 when section 276DD was on the statute book. The acceptance of the petitioner's arguments would result in a rather strange position. The petitioner will not be liable to pay penalty under section 271D of the Act,…

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