Income-tax prosecution for wilful concealment survives where assessment findings and appeal dismissal support complaint at threshold

A complaint under Sections 276-C and 277 of the Income-tax Act was supported by an assessment finding, dismissal of the assessee's appeal, and allegations of wilful concealment, so the prosecution could not be quashed at the threshold. The Court treated the absence of wilful default as a defence to be proved at trial rather than a ground to invalidate the complaint, and noted the statutory scheme, mens rea requirement, and presumption under Section 278E. The Magistrate's issuance of process was therefore not vitiated, and the quashing petition was rejected.

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Issues: Whether the complaint and the order taking cognizance under the income-tax offences were liable to be quashed on the ground that wilful concealment was not made out and that the Magistrate had not recorded satisfaction before issuing process.

Analysis: A complaint under Section 276-C and Section 277 of the Income-tax Act, 1961 was based on the assessment order, the appellate dismissal, and the allegation of wilful concealment of income for the relevant assessment year. The Court held that the existence of an assessment finding and the dismissal of the appeal supplied a sufficient basis for prosecution at that stage. The contention that there was no wilful default was treated as a defence to be established in trial, not as a ground to nullify the complaint at the threshold. The Court also referred to the statutory scheme governing tax offences, the role of mens rea, and the presumption under Section 278E of the Income-tax Act, 1961.

Conclusion: The complaint and the process issued thereon were not vitiated, and the petition for quashing was rejected.

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