Jai Gopal Mehra and anr. vs Income Tax Officer

K.P.S. Sandhu, J.

Petitioners Jai Gopal and Smt. Suman Mehra have filed this petition under section 482 Cr.P.C. praying therein that the complaint dated 8.1.1985 filed by the respondent against them, be quashed.

The petitioners are partners of M/s O.T.C. Agencies, Post Office Fields, G.T. Road, Amritsar. On July 31, 1979, the firm M/s O.T.C. Agencies filed when the return for the year 197980. A part of the documents filed the return were signed by Satish Kumar Kapur and certain documents were signed by Sudhir Mehra, another partner of the firm and Sudhir Mehra is accused No. 5 in the complaint. However, the verification was done by Satish Kumar Kapur on all the documents. Satish Kumar Kapur is accused No. 7 in the complain filed by the department regarding the aforesaid return.

On 31.3.1982, an addition of Rs. 9,90,000/ was made to the trading account of firm by the Incometax Department. However, the firm went in appeal. The amount was reduced to Rs. 6,85,236/ from Rs. 9,90,000/ addition. On further appeal to the incometax Appellant Tribunal, by the firm, it was further reduced to Rs. 90,800/ only under section 40A(3) of the Incometax Act. The Commissioner of Income Tax vide his order dated July 26, 1985, deleted the addition made by the department and held that there is no concealment. Consequently, the penalty imposed was deleted. However, on January 8, 1985, a complaint under section 276C and 277 of the Incometax Act was filed against the petitioners and other partners by the Incometax Officer, Central CircleI, Amritsar.

Mr. Bhagirath Dass, Sr. Advocate, learned counsel for the petitioners has contended at the outset that it is nowhere alleged in the complaint that these two petitioners namely Jai Gopal and Smt. Suman Mehra were incharge of and responsible to the firm for the conduct of the business of the firm at the time of the alleged commission of the offence. Therefore, no criminal liability can be fixed upon them. He has taken me through the provisions of section 278B of the Incometax Act which read as under :

"(1) Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of and was responsible to the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and published (punished) accordingly;

Provided that nothing contained in this subsection shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission on of such offence.

(2) xx xx xx

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Mr. Ashok Bhan, Sr. Advocate has not been able to say much against this proposition in view of my earlier judgment reported as Murari Lal and others v. Income Tax Officer, `A'' Ward Hissar [154 I.T.R. 227]. I find considerable force in the contention of the learned counsel for the petitioners. In view of the provisions of section 278B of the Incometax Act, the prosecution of these petitioners is misconceived and nothing short of abuse of process of Law. consequently, this petition is allowed and the complaint dated 8.1.1985 and the proceedings taken in consequence of that are quashed.