Pendency of assessment does not bar prosecution under income-tax law; criminal proceedings may begin before final assessment.

Pendency of regular assessment or reassessment proceedings does not, by itself, bar initiation of prosecution under sections 276C and 277 of the Income-tax Act. The criminal court is required to assess the offence independently on the evidence before it, and later assessment or appellate orders may be considered if they affect the tax position. The court may, in an appropriate case, adjourn or postpone the trial, but there is no rigid requirement that final assessment must precede the complaint. On that basis, the challenge to the complaints as premature failed.

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Issues: Whether a prosecution under section 276C of the Income-tax Act, 1961 can be initiated before completion of regular assessment proceedings, and whether pendency of assessment or appellate proceedings bars such prosecution.

Analysis: The proceedings arose out of a search and a summary order under section 132(5) of the Income-tax Act, 1961, followed by complaints under section 276C. The challenge was that, in the absence of regular assessment orders, the complaints were premature and the tax liability had not been finally determined. The Court relied on the principle that pendency of assessment or reassessment proceedings does not by itself prevent initiation of criminal prosecution under sections 276C and 277, and that the criminal court must determine the offence independently on the evidence before it. It was also noted that later assessment orders, or appellate orders affecting them, may be taken into account by the criminal court, and in an appropriate case the trial court may exercise discretion to adjourn or postpone the matter, but there is no rigid rule requiring prior final assessment before prosecution can begin.

Conclusion: Initiation of prosecution under section 276C is not barred merely because regular assessment proceedings are pending or have not been completed; the challenge to the complaints fails.

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