Prosecution under Income-tax law quashed where revised return was filed, penalty was dropped and refund was ordered.

Criminal prosecution under Section 276CC of the Income-tax Act was held unsustainable where the revised return had been filed belatedly, penalty proceedings were dropped and refund was directed. On those facts, continuation of the prosecution was treated as unnecessary, and the reasoning in Guru Nanak Enterprises was applied. The impugned order was set aside and the criminal proceedings were quashed in favour of the assessee.

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Issues: Whether criminal proceedings under Section 276CC of the Income-tax Act, 1961 could be sustained where the revised return was filed belatedly, the penalty proceedings were dropped and refund was ordered.

Analysis: The revised return had in fact been filed, the penalty proceedings had been dropped and refund was directed. In these circumstances, continuation of the prosecution was considered unnecessary, and the decision in Guru Nanak Enterprises was relied upon to support that view.

Conclusion: The impugned order was set aside and the criminal proceedings under Section 276CC of the Income-tax Act, 1961 were quashed in favour of the appellant.

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