M PUDYOG LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The Union of India through its Income Tax Officer has filed a Criminal Complaint for offences under Sections 276-C (1) and Section 278(B) of the Income Tax Act 1961 against four accused namely a Company i.e. M/s. M.P. Udyog Limited and its three Directors R.K. Jhunjhunwala, Dr. Gaur Han Singhania and D.P. Kanodia. Those four accused have preferred aforesaid four petitions respectively, praying that the complaint be quashed by this Court by exercising inherent powers under Section 482 Cr. P.C. At the time of admission a counter affidavit was called which has been filed by the Union of India. Rejoinder affidavit has also been filed by the petitioners. As jointly requested the applications were being taken up for final disposal at the admission stage, the relevant operative part of the order was dictated in open Court on 20.11.90 when judgment was reserved. It Was ordered that the complaint against the three directors u/s 278B of the Act stands quashed but prosecution of the Company under Section 276 C (1) of the Income Tax Act has to proceed and the magistrate may add any other section alongwith Section 276-C (1) appropriately.

(2.) The complaint relates to the alleged evasion of Income Tax by M/s. M.P. Udyog limited said to have been committed during assessment year 1975 -1976 in having concealed an item of On MoneyT income. It is admitted case of the parties that the accounting year of M/s. M.P. Udyog Limited for the said assessment year 1975 -76 had ended 31.7.1984 (See paragraph 6 of the affidavit and paragraph 14 of the counter affldavii.

(3.) Sri Sudhir - Chandra, Senior Advocate and Sri. R.S. Agrawal, Advocate have argued the matter on behalf of the applicants that the prosecution of the applicants is misconceived and the complaint be quashed. Sri S.P. Malviya, Advocate, appearing on behalf of the Union of India has argued that all the applications should be dismissed and the complaint case should proceed against all the accused nominated there in. The learned counsel for the applicants has ultimately argued only one point for seeking relief with regard to the three Directors on the ground that the prosecution against them is not maintainable.