Income-tax prosecution survives repeal where criminal liability is preserved and Article 20(1) does not bar an existing offence.

Prosecution for false statements in income-tax returns was not barred merely because penalty proceedings had been taken under the later Income-tax Act, 1961; the bar in section 28(4) of the repealed 1922 Act did not apply where no penalty had been imposed under section 28(1) of that Act. Article 20(1) did not prevent prosecution for an offence already committed when the 1922 Act was in force. Criminal liability under section 52 of the 1922 Act also survived repeal because section 6(c) of the General Clauses Act, 1897 preserved accrued liability absent a contrary intention in the repealing statute.

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Issues: (i) Whether prosecution for false statements in income-tax returns was barred because penalty had already been imposed under the taxing law and whether Article 20(1) of the Constitution of India prohibited the prosecution. (ii) Whether prosecution for the offence committed under the repealed Indian Income-tax Act, 1922 survived repeal and could continue under the saving provisions and the General Clauses Act, 1897.

Issue (i): Whether prosecution for false statements in income-tax returns was barred because penalty had already been imposed under the taxing law and whether Article 20(1) of the Constitution of India prohibited the prosecution.

Analysis: Penalty proceedings in respect of assessments completed after 1 April 1962 were required to be initiated under section 271 of the Income-tax Act, 1961 by virtue of section 297(2)(g), and not under section 28 of the Indian Income-tax Act, 1922. Since no penalty had been imposed under section 28(1) of the 1922 Act, the bar contained in section 28(4) did not apply. The prosecution was not for an ex post facto offence; the alleged false statements were made when the 1922 Act was in force, and Article 20(1) did not prevent prosecution for that existing offence merely because a different and later penalty procedure had been applied.

Conclusion: The prosecution was not barred by section 28(4) of the Indian Income-tax Act, 1922 or by Article 20(1) of the Constitution of India.

Issue (ii): Whether prosecution for the offence committed under the repealed Indian Income-tax Act, 1922 survived repeal and could continue under the saving provisions and the General Clauses Act, 1897.

Analysis: Although section 297(1) of the Income-tax Act, 1961 repealed the 1922 Act and no express saving was made for prosecution under section 52 of the repealed Act, the criminal liability incurred under that provision was preserved by section 6(c) of the General Clauses Act, 1897 because no contrary intention appeared in the repealing statute. The repeal did not destroy the offence already committed, and the absence of an express saving clause was not enough to extinguish the liability.

Conclusion: The prosecution for the offence under section 52 of the Indian Income-tax Act, 1922 survived repeal and remained maintainable.

Final Conclusion: The appeals failed because the alleged offence remained prosecutable and neither the prior penalty proceedings nor the constitutional bar defeated the criminal case.

Ratio Decidendi: Where penalty for a completed assessment is imposed under the later income-tax enactment, the bar against prosecution contained in the repealed Act does not apply, and criminal liability for an offence committed under the repealed Act is preserved by the general saving rule unless the repealing statute manifests a contrary intention.

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