Complaint validity controls prosecution: IPC offences failed for want of proper sanction, while Income-tax Act charges survived.

Cognizance of offences under Sections 193, 196 and 120B IPC was barred because the complaint was not made by the income-tax authority before whom the alleged false entries were made, or by the court to which that authority was subordinate, as required by Section 195 CrPC. By contrast, prosecution for offences under Sections 277 and 278 of the Income-tax Act was permissible where the complaint was filed through another officer at the instance of the Commissioner, because the Act authorises prosecution on that basis. The IPC prosecution was quashed, while the Income-tax Act proceedings were allowed to continue.

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Issues: (i) Whether proceedings for offences under Sections 193, 196 and 120B of the Indian Penal Code could be sustained when the complaint was not filed by the income-tax authority before whom the alleged false entries were made or by a court to which that authority was subordinate. (ii) Whether the complaint for offences under Sections 277 and 278 of the Income-tax Act was maintainable when filed at the instance of the Income-tax Commissioner by another officer.

Issue (i): Whether proceedings for offences under Sections 193, 196 and 120B of the Indian Penal Code could be sustained when the complaint was not filed by the income-tax authority before whom the alleged false entries were made or by a court to which that authority was subordinate.

Analysis: Section 195 of the Code of Criminal Procedure bars cognizance of the specified Indian Penal Code offences unless the complaint is made in writing by the court concerned or by a court to which it is subordinate. The complaint was not filed by the income-tax officer before whom the returns were examined, nor by the Commissioner as the subordinate authority contemplated by the provision. A complaint by another officer at the instance of the Commissioner did not satisfy the statutory requirement for these offences.

Conclusion: The proceedings for offences under Sections 193, 196 and 120B of the Indian Penal Code were quashed.

Issue (ii): Whether the complaint for offences under Sections 277 and 278 of the Income-tax Act was maintainable when filed at the instance of the Income-tax Commissioner by another officer.

Analysis: Section 136 of the Income-tax Act treats proceedings before an income-tax authority as judicial proceedings for the relevant purposes, and Section 279 permits prosecution for offences under the Income-tax Act at the instance of the Commissioner. On that footing, a complaint presented by another officer acting at the Commissioner's instance was held to be permissible for offences under Sections 277 and 278 of the Act.

Conclusion: The complaint was maintainable for offences under Sections 277 and 278 of the Income-tax Act and the proceedings on those counts were allowed to continue.

Final Conclusion: The prosecution was quashed only to the extent of the Indian Penal Code offences, while the proceedings under the Income-tax Act were sustained.

Ratio Decidendi: For offences protected by Section 195 of the Code of Criminal Procedure, cognizance can be taken only on a complaint by the authority expressly authorised by law, whereas prosecutions under Section 279 of the Income-tax Act may proceed at the instance of the Commissioner through a proper complainant.

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