TaxTMI 
TaxTMI 
1999 (12) TMI 11
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....that the first accused violated section 269T by repayment of loan otherwise than by an account payee cheque and that they violated section 269SS by accepting deposits of Rs. 10,000 otherwise than by an account payee cheque. The names of the drawees and dates of cheque and the amount involved in the cheque which relates to C. A. Nos. 249 of 1990 to C. A. No. 267 of 1990 and C. A. No. 269 of 1990 to C. A No. 277 of 1990 are shown in the table below : TABLE I --------------------------------------------------------------------------------------------------------------------------------------------------- Appeal number Name of the drawee Date of cheque Amount (Rs.) --------------------------------------------------------------------------------------------------------------------------------------------------- C. A. No. 249 of 1990 Kumari 13-10-87 42,404 C. A. No. 250 of 1990 Veda 15-10-87 31,687 C. A. No. 251 of 1990 Murali 15-10-87 26,406 C. A. No. 252 of 1990 Francis 15-10-87 42,482 C. A. No. 253 of 1990 Peter 13-10-87 26,610 C. A. No. 254 of 1990 Aruna 15-10-87 47,740 C. A. No. 255 of 1990 Mathu 15-10-87 26,406 C. A. No. 256 of 1990 A. Doss 13-10....
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....------------- The case of the complainant in the first batch of appeals is that when the residential premises of one James, Michael and others were searched, it was noticed that the first accused issued by way of repayment of loans to the drawees noted in the column under cheques and that as it is in violation of section 269T, after issuing summons and conducting enquiry, the complaint is filed. It is the case of the complainant in the second batch of appeals is that when the residential premises of one James were searched, it was noticed that the accused accepted deposits of Rs. 10,000 or more otherwise than under account payee cheques and that, therefore, they are liable to be punished under section 276DD of the Income-tax Act. On the side of the complainant, two witnesses were examined and on behalf of the accused N. K. Pai has been examined as D.W. 1. It is not disputed by the accused that they issued crossed cheques and that they received cash from the depositors noted in the above columns. The trial court on a consideration of the materials has held that accused Nos. 1 to 3, in the cases covered under C. A. No. 249 and connected cases, violated the provisions of t....
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....er a particular provision which was omitted. Before proceeding further to give a finding on the crucial points involved in these cases, it would be relevant to extract the provisions of the Income-tax Act. Section 269SS of the Act states that after June 30, 1984, no person shall take or accept from any other person, any loan or deposit otherwise than by an account payee cheque or account payee bank draft, if the amount is Rs. 10,000 or more. The amount of Rs. 10,000 is enhanced to Rs. 20,000 with effect from April 1, 1989. Section 276DD of the Act provides penalty for violation of section 269SS. As per the above provision, the person who accepts or takes the amount in contravention of section 269SS shall be punishable with imprisonment for a term which may extend to two years and shall also. be liable to pay fine equal to the amount of such loan or deposit. The above provision, i.e., section 276DD, was omitted with effect from April 1, 1989, under the Direct Tax Laws (Amendment) Act, 1987. Criminal Appeals Nos. 279 to 288 of 1990, are covered by the above provisions. Section 269T of the Act states thus : "No company (including a banking company), co-operative society or fi....
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....: "Where this Act or any Central Act or regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not---. . . (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid." Learned counsel for the appellant contended that the decision reported in Rayala Corporation (P.) Ltd. v. Director of Enforcement, AIR 1970 SC 494, would not apply to the facts of this case. I see there is considerable force in the above contention of the appellant. It is seen from the facts of the case reported in the above decision that the complaint was filed on March 17, 1968, under sections 4(1), 5(1)(e) and 9 of the Foreign Exchange Regulation Act and rule 132A(2) of the Defence of India Rules, which was punishable under rule 132A(4) of the Rules. It is seen that rule 132A(4) was omitted with effect from March 30, 1965. It is seen that the complaint was filed on March 17, 1968, after rule 132A(4) of the Defence of India Rules was omitted. Relying upon the above facts, the ape....
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....he repealed Ordinance. In the above case, prosecution was launched on May 13, 1950. It is held in the above decision that the prosecution was started against the accused under section 7 of the Act and not under the corresponding provisions of the Ordinance and that the offence was committed at the time when the Act was not in force and that, therefore, it is held that no mail, could be prosecuted or punished under a law which came into existence subsequent to the commission of the offence (underlining is mine). All that is held in the above decision is that section 6 of the General Clauses Act has no application when a statute, which is of a temporary nature automatically expires by efflux of time, and that the Ordinance in the present case was a temporary statute, but, it is admitted that the period during which it was to continue had not expired when the repealed Act was passed. Regarding the applicability of section 6 of the General Clauses Act, the apex court has held thus : "Whenever there is a repeal of an enactment, the consequences laid down in section 6 of the General Clauses Act will follow unless, as the section itself says, a different intention appears. In the case ....
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....secution could be launched for the offences under those sections after the same were deleted and nothing was contained in the Act that the prosecution could continue for the past act of any party." It is seen from the facts of the above case that the show-cause notice was issued on February 14, 1991, to the firm for launching prosecution under sections 276DD and 276E of the Income-tax Act and again another showcause notice was issued on March 11, 1991, for launching prosecution under sections 276DD and 276E of the Income-tax Act, 1961. Relying upon the above facts, the court has held that after deletion of the above two sections, the prosecution against the petitioner could not be launched on February 18, 1992. The court has categorically held that there was no saving clause after omission of these two sections from the Income-tax Act and that an incident which occurred prior to the omission could not be the basis for prosecution thereafter. The court has also relied upon a decision reported in Rayala Corporation's case, AIR 1970 SC 494, wherein it is held that prosecution launched on March 17, 1968, after rule 132A(2) was omitted by the Defence of India (Amendment) Rules, 1965,....
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....il 1, 1989. Therefore, the court has held that the petitioners will not be liable to pay penalty under section 271D of the Act, since it was introduced only on April 1, 1989, and that prior to that date, when that law was not in the statute book, they cannot be proceeded against and that if a prosecution also cannot be launched under the then existing section 276DD of the Act, the resultant position would be that there can be neither a prosecution nor a penalty proceeding against these petitioners and that this certainly could not have been the intention of the Legislature. I am in respectful agreement with the above view taken by a learned single judge of this court. Therefore, it cannot be contended by any stretch of imagination that since penal provision was omitted with effect from April 1, 1989, the proceedings instituted and trial commenced before the said date are taken away by the omission of the said section. I hold that the repeal or omission shall not affect the previous operation of the section so repealed. I also agree with the view taken by the learned single judge that repealing the provision is the same as omitting it. Learned counsel for the appellant relies upo....
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....] AIR 1992 SC 1595 ; [1993] Suppl. 1 SCC 644 which is a case arising under the Essential Commodities Act, it was contended that the control order passed was for a short period and the prosecution could not be continued after the expiry of the period. But the apex court has held that the offence committed has to be tried in spite of the expiry of the period and that mere expiry of the period does not make any difference. On a careful perusal of the judgment, I have no hesitation in holding that the omission of the penal provisions with effect from April 1, 1989, will not affect the pending proceedings which were instituted when the omitted provisions were operative. It is no doubt true that the penal provision provides punishment for contravention of the rules. But, in the amended provision, no imprisonment is provided. On the other hand, only a levy of penalty equal to the amount of deposit is provided. As already stated, the original sections 269SS and 269T are not in the statute book now. In the above circumstances, it cannot be said that the amended provision would express a different intention. On the date of launching prosecution, no proceedings can be instituted under sect....
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....from April 1, 1989, is vitiated, the acquittal of the accused on other grounds has to be upheld. Therefore, I hold that these appeals, i.e., C. A. Nos. 279 to 288 of 1990, have to be dismissed. It is, thus, seen from the above discussion that the order of the trial court that the court is not empowered to impose punishment since the penal provision was omitted is vitiated by grave infirmity. But in the cases covered under C. A. No. 249 and batch table II, the accused cannot be convicted for violation of the above provision, since the other, aspect of the case was not considered by the trial court. The chief manager of the first accused company gave a statement to the Income-tax Officer stating that at the request of James, cheques were crossed and endorsements were made as company and that since James is a heavy investor, he was accommodated, The second accused has stated in the statement exhibit P-5 that a circular was issued on April 6, 1985, to all the officers of the company regarding the mode of taking or accepting deposits. The second accused, as D.W. 1, has stated in his evidence that whenever a customer comes and wants to make a deposit with them, they would ask him to f....
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.... cheques, are entered in the account books of the first accused. As already stated, even though the accused have let in evidence to prove that there was reasonable cause for not issuing crossed cheque, the trial court has not given any finding on the above aspect. Therefore, the accused cannot be convicted for violation of section 276E or section 276DD of the Act. Now, the question is whether it is desirable to remit the matter to the trial court for fresh disposal or cases covered under table 1. As already stated, the amount involved in all these cheques were already brought in the account books of the company. The offence alleged against the respondents is a technical offence. The occurrence is said to have taken place in the year 1987. It is not stated that the accused evaded income-tax. In the above circumstances, it is neither prudent nor desirable to remit the case to the trial court after a lapse of 13 years. For the reasons stated above. I hold that though the order of acquittal passed by the trial court in C. A. No. 249 batch cannot be sustained, the matter cannot be remitted to the trial court for fresh disposal for considering the other aspects of the case after a lap....