Income-tax prosecution bars: interlocutory revision failed, limitation did not apply, and complaint competency was upheld.

Revision against an interlocutory order was held barred by section 397(2) CrPC, though the court examined other jurisdictional objections. Section 279(1A) did not bar prosecution under section 277 of the Income-tax Act because the penalty reduction was ordered by the Appellate Tribunal, not by the Commissioner under section 271(4A). The limitation bar under section 468 CrPC also did not apply because the Economic Offence (Inapplicability of Limitation) Act, 1974 excluded Chapter XXXVI for Income-tax Act offences and connected IPC offences triable with them. The complaint was competent since the Income-tax Officer was not a court for section 195(1)(b)(i) purposes and the complaint was filed at the Commissioner's instance.

---

---

Issues: (i) Whether the revision against the interlocutory order was maintainable under the Code of Criminal Procedure, 1973; (ii) Whether prosecution under section 277 of the Income-tax Act, 1961 was barred by section 279(1A) because the penalty had been reduced in appeal; (iii) Whether the prosecution was barred by limitation under section 468 of the Code of Criminal Procedure, 1973 in view of the Economic Offence (Inapplicability of Limitation) Act, 1974; (iv) Whether the complaint was incompetent for want of compliance with section 195(1)(b)(i) of the Code of Criminal Procedure, 1973 and section 279 of the Income-tax Act, 1961.

Issue (i): Whether the revision against the interlocutory order was maintainable under the Code of Criminal Procedure, 1973.

Analysis: The order under challenge was passed at an interlocutory stage. A revision against such an order was hit by section 397(2) of the Code. The petition could not be sustained as a revision, though the Court still examined the other jurisdictional objections in exercise of its wider powers.

Conclusion: The revision was not maintainable.

Issue (ii): Whether prosecution under section 277 of the Income-tax Act, 1961 was barred by section 279(1A) because the penalty had been reduced in appeal.

Analysis: Section 279(1A) protects an assessee only where the penalty imposable under section 271(1)(iii) has been reduced or waived by an order under section 271(4A). The reduction in the present case was made by the Appellate Tribunal, not by the Commissioner under section 271(4A). The statutory condition for the bar was therefore absent.

Conclusion: The prosecution was not barred under section 279(1A).

Issue (iii): Whether the prosecution was barred by limitation under section 468 of the Code of Criminal Procedure, 1973 in view of the Economic Offence (Inapplicability of Limitation) Act, 1974.

Analysis: Section 2 of the Economic Offence (Inapplicability of Limitation) Act, 1974 excludes Chapter XXXVI of the Code from offences under the enactments specified in its Schedule and also from offences triable with such offences. The Schedule included the Income-tax Act, 1961. Since the complaint also included offences under the Indian Penal Code triable with the income-tax offence, the limitation bar under section 468 did not apply.

Conclusion: The plea of limitation failed.

Issue (iv): Whether the complaint was incompetent for want of compliance with section 195(1)(b)(i) of the Code of Criminal Procedure, 1973 and section 279 of the Income-tax Act, 1961.

Analysis: Proceedings before an Income-tax Officer were not treated as proceedings before a court for the purpose of section 195(1)(b)(i). In addition, the complaint specifically stated that it was filed at the instance of the Commissioner, satisfying the requirement of section 279.

Conclusion: The complaint was competent and the objection failed.

Final Conclusion: All the substantive challenges to the prosecution failed, and the proceedings were permitted to continue.

Ratio Decidendi: Section 279(1A) applies only when penalty is reduced or waived by the Commissioner under section 271(4A), and the limitation provisions in Chapter XXXVI of the Code do not apply to prosecutions under the Income-tax Act, 1961 or to connected offences triable with them where the special exclusion statute applies.

---