SAT PAL Vs. STATE OF PUNJAB

JUDGEMENT

(1.) MESSRS. Parmeshwari Dass Sat Pal, Barnala, a registered firm, came into existence with effect from April 1, 1977, under a partnership deed and it was constituted by Sat Pal, Bharat Bhushan and Dharam Pal, partners. The firm carried on the business of commission agent and also dealt in the purchase and sale of food grains and other commodities. It was assessed to income-tax. In the return of income filed by the assessee-firm for the assessment year 1979-80, the total income of the firm was declared at Rs. 13,050. The return was duly signed and verified by one of the partners, namely, Bharat Bhushan, on August 10, 1979, at Barnala. On scrutiny of the books of account of the firm, it was found that the firm earned profits in the dealing in cotton at Rs. 1,02,111 and a profit of Rs. 27,910 on the purchase and sale of rice and it failed to show that the profits did not belong to it. The Income-tax Officer, Barnala, thus filed a complaint under Sections 276c and 277 read with Section 278 of the Income-tax Act, 1961 ("the Act" for short), against Messrs. Parmeshwari Dass Sat Pal, Barnala, and the present petitioners, namely, Sat Pal and Dharam Pal. The Chief Judicial Magistrate, Sangrur, after recording preliminary evidence, found that a prima facie case was made out against the accused and thus a charge-sheet was drawn up against them. The present petition has been filed for quashing the complaint, annexure P-1, the order dated October 22, 1990, annexure P-2, and charge-sheet dated April 4, 1991, annexure P-3.

(2.) THE petitioners made averments in the petition to the effect that the return for the year 1979-80 was signed and verified by Bharat Bhushan and, in response to the notice under Section 143 (2) of the Act, Bharat Bhushan appeared before the Department and they were never called there. They had no knowledge of the return and they were wrongly made as accused. In the complaint, no allegation was made against them to the effect that they were in charge of and were responsible to the firm for the conduct of the business of the firm. Even in the statement made by Shri R. R. Aggarwal, Income tax Officer, Barnala, in the court, no allegations were made against them and he simply deposed that the return was signed and verified by Bharat Bhushan and Bharat Bhushan admitted his signatures thereon.

(3.) I have heard counsel for the parties.