NEERAJ DYEING Vs. UNION OF INDIA

JUDGEMENT

(1.) MRS. Saroi Bafa, J. By means of this application under Section 482, Cr. P. C, the applicants have prayed for quashing the complaint of Criminal Case No. 834 of 1985, Union of India through Income-tax Officer, Fatehgarh v. M/s Neeraj Dyeing and others, under Section 277 of the Income Tax Act, 1961 (hereinafter referred to as the 'act') pending in the Court of Special Chief Judicial Magistrate (Economic Offences), Allahabad.

(2.) THE relevant facts giving rise to these proceedings are: - THE Criminal Complaint was instituted with the allegations that accused ap plicant No. 1 was a firm registered with the Income Tax Department and accused applicants No. 2 to 4 are its partners having shares of profit and loss at the rate of 60%, 25% and 15% respectively. THE return of the firm for the assessment year 1983-84 showing income at Rs. 30, 780 was verified by accused applicant No. 2. THE search of business and residential premises of applicants under Section 132 (1) of the Act was conducted and unaccounted purchases were detected from the purchase vouchers seized. THE purchase made through vouchers seized was not entered in the account book. Unaccounted Hundis and loan transactions were also detected. THE accused applicant No. 2 Suraj Prasad when confronted of fered Rs. 80, 000 to be clubbed in the income of the firm for the assessment year 1983-84. A revised return under Section 139 (5) of the Act was filed by him on 19. 1. 1984 showing income of Rs. 1, 10, 780 for the assessment year 1983-84. It was alleged that the accused-applicant No. 2 verified the return for the assess ment year 1983-84 submitted on 28. 7, 83 and delivered false account which he knew or believed to be false.

(3.) THE learned Counsel for the applicants submitted that applicants No. 3 and 4 having not verified the return, their prosecution is sheer misuse of the process of the Court. It was argued that there are no allegations of abetment or knowledge about submission of false return against applicants No. 3 and 4. THE statement of account having been verified by applicant No. 2 he is liable. THE learned Counsel urged that under Section 278 of the Act a person In charge of and responsible to the Company for the conduct of the business of the Company as well as the Company is liable to be proceeded against. According to the learned Counsel applicant No. 2 was liable for the affairs of the Company.