Vicarious liability under the Income-tax Act requires specific averments that an accused was in charge of company business at the relevant time.

Vicarious liability under section 278B of the Income-tax Act cannot be fastened on a person other than the company unless the complaint specifically averts that he was in charge of, and responsible for, the conduct of the company's business at the time of the alleged offence. A mere assertion that cash was accepted in violation of section 269SS is insufficient. In the absence of the foundational statutory averments, criminal proceedings against the second accused were liable to be quashed and could not be sustained.

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Issues: Whether the complaint contained the necessary averments to attract vicarious liability of the second accused under section 278B of the Income-tax Act, 1961, for the alleged offence under section 269SS of the Income-tax Act, 1961, and whether the criminal proceedings deserved to be quashed against him.

Analysis: The complaint merely stated that the accused had accepted a cash deposit in violation of section 269SS of the Income-tax Act, 1961. It did not contain the foundational allegation that the petitioner was, at the relevant time, in charge of and responsible for the conduct of the business of the company, which is the statutory requirement for fastening liability on a person other than the company under section 278B of the Income-tax Act, 1961.

Conclusion: The necessary allegations to invoke section 278B were absent, and the proceedings were liable to be quashed insofar as they related to the second accused-petitioner.

Final Conclusion: The criminal complaints could not be sustained against the petitioner for want of the essential statutory averments, and the proceedings against him were set aside.

Ratio Decidendi: For prosecuting a other than the company for an offence under the Income-tax Act, the complaint must specifically aver that such person was in charge of and responsible for the conduct of the business of the company at the time of the offence; absent such averments, vicarious liability cannot be fastened and the proceedings are liable to be quashed.

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