Acquittal in income-tax prosecution upheld where evidence failed to prove wilful default or business responsibility

Leave to appeal against acquittal in a prosecution under section 276C of the Income-tax Act was refused because the complainant's evidence did not prove the charge against the surviving accused. The record did not establish that he had verified or caused the incorrect return, and the trial court's finding that he was not responsible for the conduct of the firm's business was accepted. In the absence of material showing wilful omission in the accounts or responsibility for the impugned return, the acquittal was left undisturbed; the prolonged pendency of the complaint was also noted.

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Issues: Whether leave to appeal against the acquittal in a prosecution under section 276C of the Income-tax Act, 1961, should be granted where the evidence did not prove the charge against the surviving accused.

Analysis: The complaint arose from an alleged false return for assessment year 1984-85. The surviving accused was charged on the basis that he had verified or caused the incorrect return and had wilfully omitted entries in the books of account. On the record, the complainant's evidence did not establish that the charge was proved against him. The trial court found that he was not responsible for the conduct of the firm's business, and the court found no reason to disagree with that conclusion. The long pendency of the complaint was also noted.

Conclusion: Leave to appeal was not granted and the acquittal was left undisturbed.

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