Retrospective tax prosecution barred where pre-1961 non-remittance was a completed offence, not a continuing default.

Failure to remit tax deducted from dividends before the Income-tax Act, 1961 came into force was not prosecutable under section 276(d) on the theory of a continuing offence. The default was complete when the amount was not paid within the time prescribed under the Income-tax Act, 1922 and the corresponding rules. The later enactment did not create a fresh continuing liability for a past completed offence, and a penal provision cannot be applied retrospectively to conduct already concluded under the repealed law. On that basis, prosecution under section 276(d) for the pre-1961 default was not maintainable, and the acquittal was upheld.

---

---

Issues: Whether failure to remit tax deducted from dividends before the coming into force of the Income-tax Act, 1961 could be prosecuted under section 276(d) of that Act on the footing that the default was a continuing offence.

Analysis: The liability arose when the deduction was made and the amount was not remitted within the time prescribed under the then-prevailing law. The offence, if any, was complete on expiry of the statutory period under the Income-tax Act, 1922 and the corresponding rules. The later enactment did not create a fresh continuing offence for past defaults, and a penal provision cannot be applied retrospectively to conduct that had already culminated in a completed offence under the repealed law.

Conclusion: The prosecution under section 276(d) of the Income-tax Act, 1961 was not maintainable for the pre-1961 default, and the acquittal was rightly upheld.

---