Lalit Mahajan and others vs M.L.Sharma, ITO

Sat Pal, J. (Oral)

This petition has been filed under Section 482 of the Code of Criminal Procedure (in short the Code) and in this petition it has been prayed that the complaint Exhibit P1 filed by the Incometax Department under Section 276E read with section 278B of the Incometax Act, 1961 (in short, the Act) be quashed.

In Para 3 of the complaint, it has been stated that the accusedfirm is a registered firm and the accused Nos. 2 to 5 are its partners. It has also been stated that the verification portion of the return was signed by Ravi Mahajan, accused No. 2 being partner of the firm. It may be relevant to mention here that the present petition has been filed by three partners of the firm other than Ravi Mahajan who has signed the verification of the return for the relevant period.

Mr. Mahajan, learned counsel appearing on behalf of the petitioners submitted that there is no averment whatsoever in the complaint that the petitioners were in charge of and responsible to the firm, M/s. R.K. Mahajan Enterprises, Nakodar Road, Jullundur and as such, no case is made out against the petitioners. In support of his contention, the learned counsel has placed reliance on a judgment of this Court in Mehar Chand, Om Parkash v. I.T.O. and others, 1994(209) ITR 494.

Mr. Sawhney, learned Senior Counsel appearing on behalf of the Incometax Department, however, submits that under the Incometax Act, itself, all the partners are jointly and severally responsible to the Department and especially it is provided so under Section 278B of the Act.

I have heard the learned counsel for the parties and perused the record. There is no doubt that under section 278B of the Act, every partner/director who is incharge of and responsible to the firm can be prosecuted for an offence committed under the Incometax Act, but in the present case, as stated hereinabove, there is no allegation that the petitioners, who admittedly are the partners of the firm, were incharge of and responsible to the firm. In the absence of the pleadings in the complaint, I am of the opinion no assistance can be drawn by the learned counsel for the respondent from Section 278B of the Act.

In view of the discussion made hereinabove, the petition is allowed and the complaint and the proceedings initiated pursuant to the complaint against the petitioners only are hereby quashed. The view I have taken finds full support from the judgments of this Court in Mehar Chand, Om Parkash''s case (supra) and in Sat Pal v. State of Punjab and another, 1993(2) RecentCR 21 .