Prosecution under Section 277 of the Income-tax Act, 1961, is not maintainable until the assessment is completed.

N. C. TALUKDAR, J.

( 1 ) THESE two rules, which are at the instance of the same petitioner, relating to two different periods of assessment, are taken up together for disposal as they involve the same points for consideration. The rules are directed against two orders dated the 27th January, 1975, passed by Sri D. C. Chakravarthi, Chief Metropolitan Magistrate, Calcutta, issuing process against the petitioner under Section 277 of the Income-tax Act, 1961, in Cases Nos. C/72/75 and C/73/75 pending before him.

( 2 ) THE facts leading on to the two rules can be put in a short compass. Two petitions of complaint were filed by the Union of India, on the complaint of Sri Haramohan Chowdhury, Income-tax Officer, " F " Ward, District-III (1), Calcutta, under Section 277 of the Income-tax Act, 1961, for the assessment years 1967-68 and 1968-69. The case as made out in the petition of complaint, inter alia, is that after the retirement of the petitioner, on or about the 27th December, 1961, he has been in extensive legal practice and had large amount of consultation work and chamber practice in addition to his pension; that he acquired large amount of wealth by way of immovable properties, fixed deposits and moneys in banks but was systematically concealing his professional income by filing false returns with a view to defraud the Government of its legitimate dues; that on October 6, 1971, the petitioner delivered two duly verified returns of income-tax for the assessment years 1967-68 and 1968-69 along with three other years disclosing, inter alia, income from pension only but not including his income from professional or other sources; that on searches being conducted and upon enquiry and investigation by the income-tax department there was a disclosure that for the two assessment years, the accused had failed to disclose substantial amount as income ; that the petitioner made a verification in the returns of income to the effect that the numbers shown therein are correct although he knew or had reason to believe that the returns and particulars furnished by him were totally false ; and that thereby the petitioner committed an offence punishable under Section 277 of the Income-tax Act, 1961. The learned Chief Metropolitan Magistrate by his order of the same date took cognizance and issued summons for appearance of the accused. The petitioner appeared on February 28, 1975, and was granted a bail of Rs. 2,000 in default, to jail custody, and the said amount of P. R. bond was subsequently reduced to Rs. 500 on prayer made by the petitioner. The proceedings were impugned by the petitioner and two rules were issued along with an ad-interim stay of all further proceedings if prayed for. Two affidavits-in-opposition on behalf of the opposite party No. I, Sri Haramohan Chowdhury, affirmed on June 4, 1975, and June 5, 1975, respectively, and a supplementary affidavit on behalf of the petitioner, affirmed on the 13th June, 1975, were thereafter filed.

( 3 ) THE submissions of Mr. J. P. Mitter, who appeared in person, are of five dimensions. Firstly, that the present proceedings based on the complaints filed on January 27, 1975, are premature and contrary to the principles of natural justice in view of the notice dated January 15, 1975, issued by the Inspecting Assistant Commissioner, Range-Ill, Calcutta, and served on the petitioner calling upon him to appear before him on February 26, 1975, and show cause as to why a penalty should not be imposed on him under Section 271 (1) (c) of the Act; secondly, that neither any prosecution under Section 277 nor any penalty proceedings under Section 271 (I) (c) of the Act is maintainable because the assessment for the relevant periods were not completed until then and even now ; thirdly, that the subject-matter of the assessment is barred by limitation in view of the provisions of Sections 153 (1) (a) (i) and 139 (4) (b) (i) and (5) of the Income-tax Act, 1961; fourthly, that in view of the provisions

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