False declaration prosecution under the Income-tax Act survives despite lower alleged evasion where falsity in the declaration is alleged.

A prosecution for filing a false declaration under sections 276C(2) and 277 of the Income-tax Act could not be quashed merely because the alleged tax evasion was below the monetary threshold in the circular. The court distinguished false declaration from mere tax evasion, holding that section 277 covers making a false statement or declaration and operates on a separate footing. The circular's monetary limit was treated as relevant only to tax-evasion cases, not to complaints alleging falsity in the declaration itself. As the complaint disclosed a false declaration, the circular could not be used to defeat the prosecution.

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Issues: Whether the prosecution for filing a false declaration under sections 276C(2) and 277 of the Income-tax Act, 1961 could be quashed on the ground that the alleged tax evasion was below the monetary threshold prescribed in the circular.

Analysis: The allegation was not merely one of tax evasion but of tampering with the payment document and furnishing a false declaration to the Department. Section 277 specifically covers making a false statement or declaration, which stands on a different footing from mere evasion of tax. The monetary limit in the circular was therefore held to be relevant only to cases of tax evasion and not to a prosecution based on a false declaration. Since the complaint disclosed a false declaration, the circular could not be invoked to defeat the proceedings.

Conclusion: The challenge to the prosecution failed, and the petition was rejected.

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