1990 (6) TMI 68 - HC - Income Tax

Court upholds discretion in sentencing under Income-tax Act sections 269SS & 276DD clarifying fine imposition flexibility.

The appeals were dismissed as the court upheld the special judge's discretion in sentencing under sections 269SS and 276DD of the Income-tax Act. The ... Offences And Prosecution Issues:The judgment involves appeals filed against a judgment related to contravention of sections 269SS and 276DD of the Income-tax Act, regarding acceptance of deposits in cash exceeding Rs. 10,000.Section 269SS and 276DD Contravention:The appellant-complainant filed complaints against the respondents for contravening section 269SS of the Income-tax Act, which prohibits accepting loans or deposits over Rs. 10,000 in cash. Section 276DD provides punishment for contravention, including imprisonment and fine equal to the amount of the loan or deposit. The respondents accepted deposits in cash exceeding the limit, leading to the complaints.Imposition of Sentence:During the trial, the accused did not dispute receiving the deposits in cash. The special judge imposed a fine on one respondent and directed the other to undergo imprisonment and pay a fine. The appellant contended that the punishment awarded was not in line with section 276DD, which should entail a fine equal to the amount of deposits received.Legal Interpretation of Section 276DD:The appellant argued that section 276DD mandates a minimum fine equal to the deposit amount received, making the imposed fine of Rs. 50 illegal. However, the respondent's counsel contended that the section does not specify a minimum punishment for fines, granting the court discretion in imposing fines. The word 'liable' in the section indicates discretionary power for imposing fines.Court's Discretion in Sentencing:The judgment highlighted that the court's discretion in sentencing is crucial, and the word 'liable' in legal provisions does not mandate a specific fine amount but grants flexibility to the court. The court's discretion in imposing fines should not be curtailed by prescribing a minimum amount. The judgment cited a previous case to emphasize the importance of judicial discretion in sentencing.Decision and Dismissal of Appeals:The judgment concluded that the contention that fines should always be equal to the deposit amount under section 276DD is untenable. The court has the discretion to decide on the quantum of fines based on circumstances. As the appeals were based on the assumption of a mandatory fine amount, they were dismissed, affirming the special judge's discretion in sentencing.Result:The appeals were dismissed based on the interpretation of section 276DD and the court's discretionary power in imposing fines, emphasizing the importance of judicial discretion in sentencing under the Income-tax Act.