KUSUMCHAND SHARADCHAND Vs. UNION OF INDIA

JUDGEMENT

(1.) This revision petition is preferred against the judgment dt. 2nd Jan., 2002 passed by XlVth Additional Sessions Judge, Indore in Criminal Appeal No. 4/96, confirming the conviction and sentence recorded by the ACJM (Economic Offence), Indore in Criminal Case No. 21/1986 vide judgment dt. 22nd Dec, 1995 convicting applicant No. 2 for the offences punishable under Section 276C read with Sections 278 and 277 and sentencing him to undergo six months R.I. and to pay a fine of Rs. 3,000 on each count. Applicant No. 1 was found guilty for the offence punishable under Section 276C and Section 277 read with Section 278B of IT Act and was sentenced to pay a fine of Rs. 3,000 on each count.

(2.) The facts of the case which are necessary for the disposal of this revision are that applicant No. 1 was a partnership firm during the relevant period, namely asst. yr. 1975-76 and the relevant accounting period from Diwali 1973 to Diwali 1974. After this period the firm was dissolved. It was constituted by the partners namely, (1) Goverdhanlal, (2) Sobhagchand and (3) Kusumchand, applicant No. 2. Return of income of the firm in the asst. yr. 1975-76 was filed on 30th July, 1975 which was verified to be correct by applicant No. 2 which is Ex. P-1 in Part III of return. An income of Rs. 50,760 was shown as goodwill and it has been stated that reasons for this income not being taxable is that this income has been found as a result of difference in balance sheet credited to the accounts of the partners. Real income of the firm was shown as Rs. 13,908 only. When inquiry was made by the concerning ITO from the applicant, then, it was informed that balance sheet difference was coming from last few years which could only be detected at the time of dissolution of the firm because no balance sheet was prepared earlier. It has been stated that this difference was coming from the asst. yrs. 1971-72 to 1974-75 which was detected in the year 1975-76. Ultimately ITO held that this amount of Rs. 50,760 was in fact the income of the firm which has wrongly been shown as goodwill for the purpose of tax evasion and, therefore, the amount was included in the income of the firm. Penalty was imposed on the firm and assessment order Ex. P-4 was passed on 28th March, 1978. Applicant preferred an appeal before the AAC which was dismissed vide order Ex. P-9. A penalty of an equal amount of Rs. 50,760 was levied on the firm under Section 271(l)(c) of the IT Act, 1961 (hereinafter referred as the Act for convenience). The penalty so imposed was deleted in appeal being barred by limitation, by the CIT vide Ex. P-11 and P-12.

(3.) Thereafter, a private complainant under Sections 276C and 277 of the Act and Section 420 read with Section 511 of the IPC was filed against the firm, the applicant No. 1 and its three partners including appellant No. 2 by ITO before the learned Addl. Chief Judicial Magistrate on 31st March, 1986, the prosecution against other partners namely Goverdhanlal and Sobhagchand was quashed by order dt. 8th July, 1994 passed by this Court in Crl. Revn. No. 716/1992. The Trial Court after framing charges against both the applicants conducted trial against them and convicted them and passed sentence as stated hereinabove. Applicants preferred an appeal against judgment of conviction and sentence in the appeal finally the impugned judgment was passed against which the present revision petition has been filed.