Sanction for income-tax prosecution need not rest on a prior proposal; its validity can be tested at trial.

Criminal prosecution under sections 276C(1)(i) and 277 of the Income-tax Act was challenged on the basis that the Commissioner's sanction was invalid and issued without application of mind. The note records that a prior proposal from the assessing authority is not a legal requirement, following existing precedent. It further states that the validity of sanction may be examined during trial and proved like any other evidence, and that the accused may raise the objection at the appropriate stage. On that basis, no ground was found for quashing the prosecution proceedings.

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Issues: Whether criminal proceedings launched under sections 276C(1)(i) and 277 of the Income-tax Act, 1961 were liable to be quashed on the ground that the Commissioner's sanction for prosecution was invalid or without application of mind.

Analysis: The objection that sanction could be granted only on a proposal submitted by the assessing authority was rejected in view of the existing precedent holding that such a prior proposal is not a legal requirement. The Court further held that the validity of the sanction is a matter that can be tested in the course of trial, where it may be proved like any other evidence, and that the accused can raise the objection at the appropriate stage. On that basis, no ground was made out for quashing the prosecution proceedings.

Conclusion: The challenge to the sanction failed and the petitions seeking quashing of the prosecution were dismissed.

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