Wilful tax evasion prosecution requires prima facie evidence of intent; penalty proceedings alone do not trigger double jeopardy.

A prosecution for wilful attempt to evade tax under Section 276C of the Income-tax Act is not barred merely because penalty proceedings under Section 271(1)(c) were also initiated, since the two provisions rest on different statutory ingredients and consequences, so double jeopardy under Section 300 CrPC does not apply. However, continuation of the prosecution requires a prima facie showing of wilfulness, and the material here was found insufficient because the evidence was weakened, the entities retained their charitable character, and revised returns were filed within time without a clear admission of concealment. The discharge of the accused was therefore upheld.

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Issues: (i) Whether the criminal prosecution under Section 276C of the Income-tax Act, 1961 was barred by the prior penalty proceedings under Section 271(1)(c) and the principle of double jeopardy under Section 300 of the Code of Criminal Procedure, 1973. (ii) Whether the materials disclosed a prima facie case of wilful attempt to evade tax or payment of tax so as to justify continuation of the prosecution.

Issue (i): Whether the criminal prosecution under Section 276C of the Income-tax Act, 1961 was barred by the prior penalty proceedings under Section 271(1)(c) and the principle of double jeopardy under Section 300 of the Code of Criminal Procedure, 1973.

Analysis: The penalty proceeding and the prosecution were founded on different statutory ingredients and different consequences. A penalty for concealment or inaccurate particulars under Section 271(1)(c) is not the same as a prosecution for wilful attempt to evade tax or payment of tax under Section 276C. The two proceedings therefore do not operate on the same plane for the purpose of double jeopardy.

Conclusion: The bar of double jeopardy was not attracted, and the prosecution was not invalid on that ground.

Issue (ii): Whether the materials disclosed a prima facie case of wilful attempt to evade tax or payment of tax so as to justify continuation of the prosecution.

Analysis: The Court found that the materials were insufficient to show the additional element of wilfulness required for Section 276C. The principal witnesses or statements relied on by the prosecution were weakened, the entities remained charitable in character, and the revised returns were filed within the permitted time without a clear admission of concealment or undisclosed income. A presumption under Section 278E could not by itself substitute the initial requirement of a prima facie case.

Conclusion: No prima facie case of wilful evasion was made out, and the discharge of the accused was upheld.

Final Conclusion: The revisional challenges failed because the prosecution did not establish the statutory ingredients necessary to proceed against the accused, and the earlier order of discharge was allowed to stand.

Ratio Decidendi: A prosecution under Section 276C of the Income-tax Act, 1961 requires material showing a wilful attempt to evade tax or payment of tax, and it is not automatically triggered by a penalty order under Section 271(1)(c) or by a mere claim and later waiver of exemption.

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