Specific averments for vicarious liability under Income-tax Act section 278B were missing, so proceedings against the petitioner were quashed.

Vicarious liability under section 278B of the Income-tax Act requires specific pleadings that the accused was, at the time of the offence, in charge of and responsible for the conduct of the company or firm's business. The complaint here alleged only that certain accused were responsible to the firm for business conduct, but did not state that the petitioner had overall control or day-to-day management. Those foundational averments were held necessary and could not be supplied later through evidence. The proceedings against the petitioner were quashed for want of the required allegations.

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Issues: Whether the complaint contained the specific averments necessary to invoke vicarious liability under section 278B of the Income-tax Act against the petitioner.

Analysis: Section 278B requires an allegation that, at the time the offence was committed, the person concerned was in charge of and responsible for the conduct of the business of the company or firm. The complaint only stated that the second and third accused were responsible to the firm for the conduct of business, but did not plead that the petitioner was in charge of the business or had overall control of its day-to-day affairs. In the absence of such foundational allegations, the prosecution could not later supplement the defect by evidence.

Conclusion: The necessary ingredients for fastening liability under section 278B were not pleaded, and the proceedings against the petitioner were quashed.

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