NAVARATHNA AND CO Vs. STATE

JUDGEMENT

(1.) THE petitioner, a charted accountant, prosecuted along with an Income-tax assessee, on a complaint filed by the respondent, before the Additional Chief Metropolitan Magistrate, Madras, in C. C. No. 151 of 1985 for offences under section 120B, 193, 196, 420 and 511, Indian Penal Code, and sections 276C, 277 and 278 of the Income-tax Act, 1961, hereinafter referred to as "the Act", invokes the inherent powers of this court to quash the same.

(2.) FACTS briefly are :- One Adhimulam, a transport contractor, arrayed as the first accused (the petitioner being the second accused) and doing business in transport of oil, etc., from storage points and installations of Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum Corporation to various factories in and around Madras, filed on July 30, 1983, a return of income, along with profit and loss account and balance-sheet for the assessment year 1983-84. It is alleged that on October 27, 1983, a search for his business premises and residential premises was made under section 132(1) of the Act, which resulted in the seizure of certain documents account books and papers. On a perusal of the above materials, it was found that the statement of profits and loss account and balance-sheet submitted by the first accused on July 30, 1983, was false, and his income had been understated and his expenditure had been overstated. The complaint further alleges that the above statement was typed in the letter-head of Navarathna and Co., Chartered Accountants, of which the petitioner herein was the proprietor, and that he had acted in collusion and conspiracy with the first accused and had committed offences under sections 120B, 193 and 420, Indian Penal Code, and also offences under sections 276C(1) and 277 of the Act. It was further alleged that the petitioner by typing the false trading, profits and loss account and balance-sheet as on March 31, 1983, in his letter-head for the first accused and helping the first accused to deliver false Income-tax return, etc., abetted and induced the first accused to make and deliver statements and declarations relating of income, which he knew were false and thereby committed an offence under section 278 of the Act. Contending that the above material, even if accepted to be true, would not make out the offences alleged against him, the petitioner invokes the inherent powers of this Court for quashing the proceedings.

(3.) IN the instant case, there is nothing in the complaint to show that the documents so recovered during the seizure had been placed before the petitioner. Factually, there is no basis for the allegation that the petitioner had acted to furtherance of a common intention, along with the first accused or conspired with him of even abetted him in filing false returns. Even if all the averments made in the complaint are true, there would still be no basis to hold that the petitioner had committed any of the offences alleged against him. Continuance of the proceedings against the petitioners, therefore, would be an abuse of the process of law which this court under its inherent jurisdiction is bound to prevent.