Limitation and net profit computation under company law barred the complaint and excluded prior-year depreciation as excess expenditure.

A complaint for an offence punishable only with fine was held time-barred because the six-month limitation under section 468 CrPC applied, the alleged contravention was not a continuing offence, and the explanation for delay did not justify condonation under section 473 CrPC. The court also held that unprovided depreciation of earlier years could not be treated as "excess expenditure" for computing net profits under section 349(4) of the Companies Act, 1956, because depreciation and excess expenditure are distinct deductions and the provision does not create a residuary category for prior-year depreciation. The complaint and summoning order were therefore quashed.

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Issues: (i) Whether the complaint was barred by limitation and cognizance could be taken after the prescribed period. (ii) Whether unprovided depreciation of earlier years could be treated as "excess expenditure" for computing net profits under section 349(4) of the Companies Act, 1956.

Issue (i): Whether the complaint was barred by limitation and cognizance could be taken after the prescribed period.

Analysis: The offence was punishable only with fine, so the limitation period under section 468 of the Code of Criminal Procedure, 1973 was six months. The knowledge of the alleged offence was traced to the inspection date, and even on the later date relied upon by the complainant, the complaint was filed well beyond time. The contravention alleged was not a continuing offence, and the explanation offered for delay did not justify resort to section 473 of the Code of Criminal Procedure, 1973.

Conclusion: The complaint was barred by limitation and cognizance could not be validly taken; this issue was decided in favour of the petitioner.

Issue (ii): Whether unprovided depreciation of earlier years could be treated as "excess expenditure" for computing net profits under section 349(4) of the Companies Act, 1956.

Analysis: The statutory scheme of section 349(4) of the Companies Act, 1956 treats depreciation and excess expenditure as distinct heads of deduction. Depreciation contemplated by the provision refers to depreciation for the relevant year under section 350 of the Companies Act, 1956, and the language of clause (1) does not create a residuary category wide enough to include unprovided depreciation of previous years. The interpretation adopted aligned with the earlier High Court view that such prior depreciation is not an item of excess expenditure.

Conclusion: Unprovided depreciation of earlier years could not be treated as excess expenditure under section 349(4), so the prosecution lacked a legal foundation; this issue was decided in favour of the petitioner.

Final Conclusion: The complaint and the summoning order were quashed because the prosecution was both time-barred and legally unsustainable on the construction of the relevant company law provisions.

Ratio Decidendi: For an offence punishable only with fine, cognizance must be taken within the limitation period unless delay is properly explained, and unprovided depreciation of earlier years is not a deductible head of "excess expenditure" under section 349(4) of the Companies Act, 1956.

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