Omission of penal provision and prosecution under section 269SS cannot continue when the complaint is filed after deletion.

Where the penal provision in section 276DD had been omitted before the complaint was lodged, the text notes that prosecution for an alleged violation of section 269SS could not be sustained and similar criminal proceedings were liable to be quashed under section 482 CrPC. It further records that the omission was treated as a beneficial legislative change in favour of the assessee, and that other High Court decisions had taken the same view in quashing comparable complaints.

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Issues: Whether a complaint for violation of section 269SS of the Income-tax Act, 1961 could survive after omission of the penal provision in section 276DD, and whether the criminal proceedings were liable to be quashed under section 482 of the Code of Criminal Procedure, 1973.

Analysis: The complaint related to cash deposits alleged to be in violation of section 269SS, for which punishment was earlier provided under section 276DD. By the time the complaint was lodged, section 276DD had already been omitted with effect from 1 April 1989. The Court followed the view that once the penal provision stood deleted, the prosecution could not be continued on the basis of a complaint filed after the omission, particularly where the change was treated as beneficial in nature. It also noted that other High Court decisions had taken the same view and had quashed similar proceedings.

Conclusion: The petition for quashing was not maintainable on the merits urged by the petitioner, and the criminal proceedings were not to be interfered with.

Ratio Decidendi: Where the penal provision creating the offence has been omitted before the complaint is lodged, prosecution for the alleged violation cannot be sustained, especially when the legislative change operates beneficially in favour of the assessee.

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