INCOME TAX OFFICER Vs. SHIV SEWAK COTTON CO.

JUDGEMENT

(1.) THE Income Tax Officer, Faridkot, has filed the instant petition under Section 482 Cr. P.C. for setting aside the order dated 4.4.1994 passed by Sessions Judge, Faridkot, whereby the revision petition filed by the petitioner against the order of Chief Judicial Magistrate, Faridkot dated 28.10.1991 has been dismissed.

(2.) THE Chief Judicial Magistrate, by his order dated 28.10.1991 had dismissed the complaint filed by the petitioner against 17 partners of firm M/s Shiv Sewak Cotton Company, Kot Kapura under Section 276-B read with Section 278-B of the Income Tax Act, 1961 (hereinafter referred to as the Act) and discharged the accused.

(3.) IN this case, the complaint was filed by the petitioner on the allegation that the respondent firm M/s Shiv Cotton Company filed return of its income for the assessment year 1980-1981 showing an income of Rs. 54,966/-. During the said assessment year, the accused firm credited a sum of Rs. 55,000/- showing the same as carrying charges, but on examination of the account of the firm, it was found that the assessee had obtained a loan from M/s Shri Shiv Cotton Company and paid estimated interest to the tune of Rs. 55,000/-. But the assessee firm did not deduct the tax at source, as required under Section 194-A of the Act. In this regard, the penalty proceedings were initiated against the respondent firm under Sections 221 and 201(1A) of the Act. During those proceedings, the accused firm explained that no interest had been paid by it and the aforesaid amount was paid as carrying charges. This explanation given by the firm was not accepted, therefore, the penalty under Section 221 of Act was imposed and the accused firm was held liable to be proceeded against under Section 194-A of the Act. Hence, the complaint was filed.