SUSHILA INDUSTRIES Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS revision is preferred for setting aside the order dated October 30, 1989, of the learned Additional Chief Judicial Magistrate, Cuttack, Camp at Rourkela, in Case II(c) C. C. No. 17 of 1989, framing charges against the petitioners under Sections 277 and 278B of the Income-tax Act, 1961 (hereinafter referred to as "the Act").

(2.) THE firm, Sushila Industries (petitioner No. 1), is a registered firm of which petitioners Nos. 2 to 7 and the deceased, Mahabir Prasad Agarwala (who died on November 12, 1987), are the partners. THE registered firm was situated at Rajgangpur within the revenue district of Sundargarh, Orissa, and it is an income-tax assessee. THE Deputy Commissioner of Income-tax (Assessment), Special Range, Sambalpur (the present opposite party), filed the complaint Case II(c) C. C. No. 17 of 1989 against all the petitioners alleging that the assessee-firm (petitioner No. 1) for the assessment year 1976-77 has filed a return with false particulars and with false verification by one of its partners on behalf of the firm before the Income-tax Officer, Ward-A, Rourkela, in August, 1976, and thereby all the petitioners rendered themselves liable under Section 277 read with Section 278B of the Act.

(3.) THE wording in the proviso to Section 10(1) of the Essential Commodities Act is similar to the wording in the proviso to Section 278B(1) of the Income-tax Act. Mr. M. R. Patnaik, learned counsel for the opposite party, contended that because of the proviso to Section 278B(1) of the Act, the learned Additional Chief Judicial Magistrate was justified in framing the charges against all the petitioners as it was open to petitioners Nos. 3 to 7 to show that the offence was committed without their knowledge so that they will be ultimately acquitted. That such a contention is without substance is evident from the following observations of the Supreme Court in Sham Sunder's case [1990] 67 Comp Cas 1, while dealing with the proviso to Sub-section (1) of Section 10 of the Essential Commodities Act (at page 4) :