Section 277 covers any person, not just an assessee, and no prior notice is needed for false verification cases.

Section 277 of the Income-tax Act is broad enough to cover any person who knowingly makes a false statement or verification, and is not confined to an assessee; on the facts discussed, prosecution against an income-tax practitioner was therefore maintainable. The commentary also states that sanction under the Income-tax Act is not required for Indian Penal Code offences, that a complaint authorised by the competent Commissioner is competent even if not personally filed by that authority, and that no prior notice under section 276CC is needed where the allegation is forgery or false verification rather than failure to file a return. Territorial and drafting objections were likewise rejected.

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Issues: (i) whether section 277 of the Income-tax Act applies only to an assessee and not to an income-tax practitioner; (ii) whether prosecution for offences under the Indian Penal Code required sanction under the Income-tax Act; (iii) whether the complaint was incompetent for want of authority in the officer who filed it; (iv) whether prior notice under section 276CC was a condition precedent to prosecution under section 277; (v) whether absence of territorial jurisdiction over the assessees defeated the complaint; and (vi) whether the complaint was invalid for not specifying the provision under which it was filed.

Issue (i): whether section 277 of the Income-tax Act applies only to an assessee and not to an income-tax practitioner

Analysis: Section 277 is worded broadly and penalises any person who makes a false statement in verification or delivers a false account or statement knowingly or believing it to be false. The expression "person" is of ordinary amplitude and is not confined to an assessee. On the facts alleged, the petitioner was not merely preparing returns in a professional capacity; the complaint alleged a conspiracy, forgery of signatures, filing of false returns and procurement of refund orders on the basis of fabricated documents.

Conclusion: The contention was rejected and the prosecution under section 277 was held maintainable against the petitioner.

Issue (ii): whether prosecution for offences under the Indian Penal Code required sanction under the Income-tax Act

Analysis: Section 279 governs prosecution for offences under the Income-tax Act and does not extend to offences under the Indian Penal Code. The absence of sanction specifically for the Indian Penal Code offences, therefore, did not vitiate the proceedings.

Conclusion: The contention failed and the prosecution was not quashed on that ground.

Issue (iii): whether the complaint was incompetent for want of authority in the officer who filed it

Analysis: The complaint stated that it was filed at the instance of the concerned Commissioners of Income-tax in whose jurisdictions the offences were committed. Authorization by the competent Commissioner is sufficient; personal presentation of the complaint by the authorising authority is not mandatory. The officer who signed the complaint was also shown to be the Commissioner of Income-tax, Tamil Nadu No. 1, Madras.

Conclusion: The complaint was held competent and the objection was rejected.

Issue (iv): whether prior notice under section 276CC was a condition precedent to prosecution under section 277

Analysis: Section 276CC concerns wilful failure to furnish a return within time. The present prosecution was not for non-filing of returns but for forgery of returns, false statements and procurement of refund on the basis of fabricated documents. No statutory notice was required for an offence under section 277.

Conclusion: No notice was necessary and the objection was rejected.

Issue (v): whether absence of territorial jurisdiction over the assessees defeated the complaint

Analysis: The complaint averred that the offences under the Income-tax Act were committed within the jurisdiction of the several Commissioners whose instance supported the prosecution. The statute did not require anything further, and the administrative position of the officer also supported competence to act.

Conclusion: The jurisdictional objection was rejected.

Issue (vi): whether the complaint was invalid for not specifying the provision under which it was filed

Analysis: The same point had effectively been dealt with in the earlier quash petition. A complaint by a public servant acting in discharge of official duties is maintainable under section 200 of the Code of Criminal Procedure, and the complaint here sufficiently disclosed that character.

Conclusion: The objection had no merit.

Final Conclusion: The petitioner's challenges to the criminal prosecution failed on all substantive grounds, and the trial was permitted to proceed.

Ratio Decidendi: For an offence under section 277 of the Income-tax Act, the term "person" is not confined to an assessee, authorization by the competent Commissioner is sufficient for prosecution at the instance of the department, and no prior notice under section 276CC is required where the allegation is forgery or false verification rather than failure to furnish a return.

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