PADMALAYA Vs. A V KRISHNA RAO

JUDGEMENT

(1.) The petitioners are accused of offences under Sections 120-B and 420 IPC and Sections 276(C), 277,278-B of the Income Tax Act, 1961. The first petitioner is a firm and the 2nd and 3rd petitioners are its partners.

(2.) For the assessment year 1981-82, the return of income of the first petitioner firm was delivered to the Income Tax Officer, Vijayawada on or before 31-3-82. The return was signed and verified by the third petitioner. During the course of assessment proceedings, it was found that certain inadmissible expenditures were shown. The assessment was completed by the Income-tax Officer, 'B' Ward, Vijayawada, after adding back some inadmissible expenses. Subsequently the file was transferred to the Income-tax Officer, Central Circle Madras, who was re-designated as Asst. Commissioner, Central Circle II(4) Madras. Later, searches were conducted under Sec.132 of the Income tax Act, 1961 ('the Act' for short) at the business premises of the firm's petitioner, residences of the partners and other connected places. Certain letters siged by the third petitioner were recovered. The assessment for the assessment year 1981-82 was reopened and a revised return was filed by the first petitioner, signed and verified by the third petitioner. After re-assessment was completed, the respondent lodged a complaint before the Special Judge for Economic Offences, at Hyderabad in CC No.21/90.

(3.) Sri Dasaradharama Reddi, learned counsel for the petitioners firstly submitted that the complaint lodged by the respondent is not maintainable in so far as the offences under Sections 120-B and 420 IPC are concerned, inasmuch as no Court can take cognizance of a case until a complaint in writing is filed either by the Court by itself or some other court to which the said Court is subordinate, for offences punishable under the Indian Penal Code, as laid down under Sec.195 Cr.P.C. It was nextly submitted by the learned counsel that proceedings against the 2nd petitioner who is a mere partner of the first petitioner-firm, cannot be proceeded with as he was neither incharge of, nor was responsible to the first petitioner firm for the conduct of the business of the firm, as required under Sec.278-B of the Act.