SABARI ART PRINTERS Vs. STATE OF ORISSA

JUDGEMENT

(1.) PETITIONER No. 2, Baidyanath Panda, was the managing partner of petitioner No. 1, M/s Sabari Art Printers, which was a registered firm. They were prosecuted for the offences punishable under ss. 276C and 277 r/w S. 278B of the IT Act, 1961. The trying magistrate has found the petitioners guilty under the aforesaid provisions and convicted them thereunder sentencing petitioner No. 2 to undergo rigorous imprisonment for three months and to pay a fine of Rs. 100 with a defaulting sentence on each count. Petitioner No. 1 represented by petitioner No. 2 has been sentenced to pay a fine of Rs. 500 with a defaulting sentence on each count. The sentences are to run consecutively. The aforesaid conviction and sentence was challenged by the petitioners in appeal which was without any success. Hence, this revision.

(2.) THE prosecution case was that petitioner No. 1 represented by its managing partner petitioner No. 2 was a registered firm which was engaged in the business of printing and in that capacity was an assessee under the IT Act, 1961 (hereinafter referred to as "the Act"). Petitioner No. 2, as the managing partner, was directly responsible for the management of the firm. It is the allegation of the prosecution that petitioner No. 2 on behalf of petitioner No. 1 filed a return on 16th Sept., 1980, for the asst. year 1980 81 along with some annexures and its verification was signed by him. The closing stock was shown at Rs. 25,232.12 only. For the subsequent asst. year 1981 82, petitioner No. 2 on behalf of petitioner No. 1 filed a return on 6th Oct., 1981, along with annexures, the verification of which was also signed by him. The opening stock was shown at Rs. 42,181.13 only. When the inflation between the closing stock of the asst. year 1980 81 and the opening stock for the asst. year 1981 82 to the tune of Rs. 16,949.01 was detected by the ITO, notice was issued to the petitioners to show cause as to why the aforesaid difference should not be treated as "concealed income" and added to the income returned. Petitioner No. 2 in a written memo submitted to the ITO that it was all due to a typographical mistake and the opening stock should be taken at Rs. 25,232 instead of Rs. 42,181. The said plea was not accepted and ultimately the assessment order for 1981 82 was finally passed on 23rd Dec., 1983. The order of assessment became final as it was not appealed against. On 22nd July, 1985, the ITO took the statement of petitioner No. 2 in which the latter stated that the books of account were not available as they were all destroyed and the business of the firm stood closed. On the aforesaid basis, a prosecution report was filed under ss. 276C and 277 r/w S. 278B of the Act alleging that the petitioners made false statements in the verification of the returns for 1980 81 and 1981 82 and delivered accounts which were false which they knew and/ or believed them to be false. This led to the trial and conviction of the petitioners as indicated.

(3.) THE prosecution examined two witnesses on its behalf. P. W. 1 was the complainant and P. W. 2 was the ITO at Jeypore during the period 1983 to 1986. The petitioners examined their manager as D. W. 1 in support of their defence.