1997 (2) TMI 25

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....ner was carrying on business in the purchase and sale of steel tubes and fittings at Kanpur. On May 21, 1980, a search was conducted by the income-tax officials at the business and residential premises of the petitioner. During the said search it was found that the petitioner had omitted to record certain transactions in his account books. The petitioner claimed that with a view to purchase peace and to avoid protracted litigation with the Department he was advised to settle the dispute with the then Income-tax Commissioner, Kanpur. Accordingly, the petitioner surrendered a sum of Rs. 35,000 to be added towards the income for the assessment year 1980-81, Rs. 20,000 for the assessment year 1979-80. For the assessment year 1978-79 the petitio....

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....d various amounts. The assessment in question being a compromised assessment, there was no occasion for the Income-tax Officer to initiate any criminal penal action against the petitioner. Further it was contended on behalf of the petitioner that the offence being compoundable and the prosecution having been launched without offering an opportunity of being heard and to compound the matter, as was contemplated by the provisions of sub-section (2) of section 279 of the Income-tax Act, before or after the institution of the proceedings, the criminal prosecution initiated against the petitioner was bad in law. The provisions of sub-section (2) of section 279 read as under "Any offence under this Chapter may, either before or after the in....