Section 279(1A) prosecution bar applies only when penalty relief is granted under section 273A for the relevant year.

Section 279(1A) bars prosecution for offences under sections 276C and 277 only where the penalty under section 271(1)(iii) has been reduced or waived by an order under section 273A for the relevant assessment year. In the absence of any proceedings or favourable order under section 273A, no statutory bar arises against launching or continuing prosecution for those offences.

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Issues: Whether prosecution for offences under sections 276C and 277 of the Income-tax Act, 1961 was barred in the absence of any order under section 273A of that Act reducing or waiving the penalty under section 271(1)(iii).

Analysis: Section 279(1A) prohibits prosecution for offences under sections 276C and 277 only where, in relation to the relevant assessment year, the penalty under section 271(1)(iii) has been reduced or waived by an order under section 273A. No proceedings under section 273A had been initiated in the present case. The absence of a favourable order under section 273A therefore did not create any legal bar against prosecution under sections 276C and 277.

Conclusion: The prosecution was not barred and the petition for quashing the complaint and criminal proceedings failed.

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