Wilful attempt to evade tax under Section 276C requires proof of knowledge of false entries; conviction depends on the accused's own conduct.

Explanation (i) to Section 276C of the Income-tax Act does not by itself make mere possession or control of books containing false entries sufficient for conviction; the prosecution must still prove a wilful attempt to evade tax and the accused's knowledge of the falsity. On the facts, the first accused was not shown to have knowledge of the clerk's interpolations, and the abetment finding had already failed, so his conviction and sentence were set aside. The second accused admitted making the false entries, so his conviction was sustained, although the sentence was reduced because of the long lapse of time.

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Issues: Whether Explanation (i) to Section 276C of the Income-tax Act, 1961 makes mere possession or control of books of account containing false entries sufficient for conviction, and whether the first accused's conviction under that provision could be sustained on the facts while the second accused's conviction required interference only on sentence.

Analysis: The opening words of Section 276C(1) require a wilful attempt to evade tax, and the Explanation does not dilute that requirement. Mere possession or control of books containing false entries is not enough by itself; the prosecution must establish knowledge of the false entries before penal liability can follow. On the facts, the first accused had not been shown to have knowledge of the interpolations made by the clerk, and the finding of abetment against him had already failed. The second accused, on his own admission, made the false entries and therefore his conviction could stand, though the long lapse of time justified interference with the sentence.

Conclusion: The conviction and sentence of the first accused were set aside. The conviction of the second accused was sustained, but the substantive sentence was reduced.

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