Pendency of reassessment does not bar criminal prosecution; discharge was premature and the original assessment remained the basis.

Pendency of reassessment proceedings did not by itself justify quashing the prosecution or discharge of the accused for offences under the Indian Penal Code and the Income-tax Act. The Madras HC noted that the accused could raise his objections at the stage of framing of charges, and that the discharge petition was premature. It held that the original assessment continued to supply the basis for criminal action, and the mere absence of a reassessment order within two years did not amount to acceptance of the taxpayer's explanation or bar continuation of the prosecution. The challenge to the prosecution was rejected and discharge was held not maintainable.

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Issues: Whether the prosecution for offences under the Indian Penal Code and the Income-tax Act could be quashed or the accused discharged on the ground that reassessment proceedings were pending and no final reassessment order had been passed.

Analysis: The earlier order had already held that the accused could raise his contentions at the stage of framing of charges, and the present discharge petition was premature. The pendency of reassessment did not nullify the prosecution, because the original assessment remained the basis for criminal action. The absence of a reassessment order within two years did not amount to acceptance of the explanation, and it did not bar the continuation of the prosecution.

Conclusion: The challenge to the prosecution was rejected, and the discharge petition was not maintainable.

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