Omission of the default provision bars continued prosecution for late filing of income tax returns.

Omission of the relevant default provision from the Income-tax Act, 1961 was treated as obliterating that provision for pending prosecution, so criminal proceedings for failure to file the return on time could not be continued for the earlier assessment year. The prosecution had been founded on delayed furnishing of the return under section 139(1) read with the penal provisions in the complaint, but the Court applied the principle that once the provision creating the default is omitted, the foundation for prosecution disappears. The complaints were therefore liable to be quashed in favour of the assessee.

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Issues: Whether the criminal prosecution for failure to file the return of income could continue after the omission of the relevant default provision from the Income-tax Act, 1961.

Analysis: The return for the assessment year in question had been filed belatedly, and the prosecution was founded on the default in furnishing the return within the time prescribed under section 139(1) of the Income-tax Act, 1961, read with the penal provisions invoked in the complaints. The Court held that the omission of the relevant provision by the Direct Tax Laws (Amendment) Act, 1989 resulted in obliteration of the omitted provision, and by applying the principle recognised by the Supreme Court, the prosecution for the earlier assessment year could no longer be continued.

Conclusion: The prosecution was barred by the omission of the provision, and the complaints were liable to be quashed in favour of the assessee.

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