Judgment

G.P. Mathur, J.—This appeal by special leave has been preferred against the judgment and order dated 12.4.1993 of High Court of Karnataka by which the petition preferred by the respondents under Section 482 Cr.P.C. was allowed and the criminal complaint filed against them under Section 276C, 277 and 278 read with Section 278B of the Income Tax Act (hereinafter called “the Act”) was quashed. Liberty was, however, granted to the appellants to institute fresh prosecution against respondent No. 2 after affording him an opportunity of hearing before according sanction under Section 279(1) of the Act.

2. The respondent No. 1 in the appeal, M/s. Velliappa Textiles Ltd., is a company registered under the provisions of Companies Act and respondent No. 2 Shri C. Velliappa is its Managing Director. For the A.Y. 1985-86 the company filed its return of income tax for the period ending 30.6.1984 showing an income of Rs. 43,940/-. The company had claimed deduction of Rs. 9,16,442/- on account of depreciation and investment allowance, etc. on the ground that two new machines worth Rs. 14,79,589/- were purchased and installed during the previous year relevant to A.Y. 1985-86. The company was