Vicarious liability for tax offences requires specific facts showing partners controlled the firm's business; bare allegations are insufficient.

Criminal complaints for failure to deduct tax at source against firm partners require specific averments and supporting material showing that the partners were in charge of and responsible for the firm's business at the relevant time. Vicarious liability under section 278B of the Income-tax Act does not arise from a bare assertion alone; the complaint must disclose credible facts showing active involvement. For section 194A, "person responsible for paying" must be read with section 204, and partners are not principal officers unless validly treated as such under section 2(35). On that basis, the complaints against the partners were quashed, while the proceedings against the firm continued.

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Issues: Whether criminal complaints for failure to deduct tax at source could be sustained against the partners of a firm in the absence of specific allegations and supporting materials showing that they were in charge of and responsible for the conduct of the firm's business.

Analysis: The liability under section 278B of the Income-tax Act, 1961 depends on proof that the person concerned was in charge of, and responsible for, the conduct of the business at the relevant time. For the purpose of section 194A, the expression "person responsible for paying" must be read with section 204, and section 2(35) shows that partners do not become principal officers unless notice is served treating them as such. A mere bald assertion that the partners were in charge of and responsible for the firm's business is insufficient; the complaint must contain credible material showing active involvement so that vicarious liability can arise.

Conclusion: The complaints and proceedings against the petitioners were unsustainable and were quashed, while the proceedings against the firm were allowed to continue.

Ratio Decidendi: Vicarious criminal liability for tax offences cannot be fastened on partners of a firm unless the complaint and supporting materials specifically show that they were in charge of and responsible for the conduct of the business, or were validly treated as principal officers under the Act.

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