Prosecution for failure to file income-tax returns or comply with notices remains maintainable despite pending assessment and refund claims.

Failure to file a return within the prescribed time under Section 139(1), or to comply with a valid notice under Sections 142(1) or 148, is treated as the statutory breach attracting prosecution under Section 276CC. The pendency of assessment proceedings does not, by itself, bar criminal proceedings, and a claim that tax was refundable does not negate the earlier default. A later notice under Section 142(1) cannot be read as superseding an earlier notice so as to create an indefinite period for compliance. On this reasoning, prosecution was maintained for the later assessment years, and the discharge based on the later notice was held to be erroneous.

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Issues: (i) Whether prosecution under Section 276CC of the Income-tax Act, 1961 was sustainable for assessment years 2004-05 and 2005-06 despite the plea that no tax was due and that excess tax was refundable. (ii) Whether the revisional court was justified in discharging the assessee for assessment year 2003-04 on the ground that the later notice under Section 142(1) of the Income-tax Act, 1961 had no stipulated time for compliance and superseded the earlier notice.

Issue (i): Whether prosecution under Section 276CC of the Income-tax Act, 1961 was sustainable for assessment years 2004-05 and 2005-06 despite the plea that no tax was due and that excess tax was refundable.

Analysis: Failure to furnish the return within the time prescribed by Section 139(1), or to comply with notices issued under Sections 142(1) or 148, constitutes the offence. The pendency of assessment proceedings does not control the prosecution, and the proviso to Section 276CC only grants a limited benefit in specified situations. The claim that tax was refundable did not negate the statutory breach already committed.

Conclusion: The prosecution for assessment years 2004-05 and 2005-06 was held to be maintainable, and the challenge by the assessee failed on these years.

Issue (ii): Whether the revisional court was justified in discharging the assessee for assessment year 2003-04 on the ground that the later notice under Section 142(1) of the Income-tax Act, 1961 had no stipulated time for compliance and superseded the earlier notice.

Analysis: The record showed non-compliance with both the obligation to file the return under Section 139(1) and the notice under Section 142(1). A later notice could not be read as superseding the earlier one so as to confer an indefinite period for compliance. The later filing of the return did not erase the earlier liability to prosecution under Section 276CC.

Conclusion: The discharge for assessment year 2003-04 was held to be erroneous, and the assessee was not entitled to discharge on this ground.

Final Conclusion: The petitions relating to assessment years 2004-05 and 2005-06 were dismissed, while the petition relating to assessment year 2003-04 was allowed and the prosecution in that complaint was restored.

Ratio Decidendi: An offence under Section 276CC is attracted on failure to file the return within the prescribed time or to comply with a valid notice, and the pendency or outcome of assessment proceedings does not, by itself, bar prosecution.

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