The court established the validity of Sections 276C(1) and 276CC of the Income-tax Act, 1961, in relation to Articles 14 and 21 of the Constitution of India, and clarified the necessity of instructions or directions for institution of proceedings for prosecution.

V.K.Singhal, J.

1. THE validity of the provision of Sections 276C(1) and 276CC of the Income-tax Act, 1961, has been challenged in these writ petitions as violative of Articles 14 and 21 of the Constitution of India. THE order dated March 22, 1996, passed under Section 279(1) of the Act for the assessment years 1988-89 to 1991-92 has been challenged as without jurisdiction. THE complaint filed before the Special Court for Economic Offences at Bangalore, is also prayed to be quashed.

2. A survey was conducted on December 7, 1995, under Section 133A of the Act. Notice under Section 148 was issued on December 15, 1995. Notices dated February 14, 1996, and March 1, 1996, were issued as to why the prosecution proceedings should not be launched against the petitioners for not filing the returns in time. The Commissioner of Income-tax not satisfied with the reply, authorised the Assistant Commissioner of Income-tax to file a complaint under Sections 276C(1) and 276CC of the Act. Interest under Sections 234A, 234B and 234C has been levied by the assessing authority. It is stated that, since the returns were accepted under Section 143(1)(a) of the Act, vide assessment order dated March 29, 1996, subsequently, the assessment order under Section 143(1) read with Section 147 was passed, levying interest. Interest under Sections 139(8), 215 and 217 of the Act has to be charged for the assessment year 1988-89 and for the subsequent period, interest under Sections 234A, 234B and 234C of the Act has to be levied, which has, in fact, been levied and even payment thereof, has been made for 1989-90 to 1990-91 and application for waiver has been moved for 1988-89. The provisions of Sections 276C(1) and 276CC of the Act are as under :

"276C. (1) If a person wilfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable,--

(i) in a case where the amount sought to be evaded exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine ;

(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine."

"276CC. If a person wilfully fails to furnish in due time the return of income which he is required to furnish under Sub-section (1) of Section 139 or by notice given under Clause (i) of Sub-section (1) of Section 142 or Section 148, he shall be punishable,--

(i) in a case where the amount of tax, which would have been evaded if the failure had not been discovered, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine ;

(ii) in any other case, with imprisonment for a term which shall not be less than three months but which may extend to three years and with fine :

Provided that a person shall not be proceeded against under this Section for failure to furnish in due time the return of income under Sub-section (1) of Section 139

(i) for any assessment year commencing prior to the 1st day of April, 1975 ; or

(ii) for any assessment year commencing on or after the 1st day of April, 1975, if-

(a) the return is furnished by him before the expiry of the assessment year ; or

(b) the tax payable by him on the total income determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source, does not exceed three thousand rupees."

It is stated that, for belated payment of tax and submission of the returns, the provisions existed under Sections 139(8) and 215/217 and penalty is also provided under Section 271(1)(a) of the Act for the assessment year 1988-89. For the subsequent year from April 1, 1989, the provision for levy of interest for belated r