Quashing of tax prosecution rejected where complaints alleged partner responsibility, false returns, fabricated evidence, and no bar from settlement or revised returns.

Specific averments that the partners were responsible for the firm's business and had participated in filing false returns, fabricating evidence, and deceiving the tax were sufficient to resist quashing under inherent jurisdiction. At the complaint stage, only the allegations and supporting materials could be examined, and the pleaded facts prima facie disclosed the offences alleged. A settlement limited to the concealed income did not imply any bar on prosecution, revised returns filed after search and after assessment did not erase the alleged criminality, and pending appeals against penalty orders did not prevent prosecution. The administrative circular relied on was inapplicable because prosecution had begun when the relevant age threshold was not crossed.

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Issues: Whether the criminal complaints arising from alleged tax evasion and falsification of accounts disclosed grounds for quashing under the inherent jurisdiction, including the contention that the partners could not be prosecuted, that there had been a settlement barring prosecution, that revised returns prevented prosecution, and that the pending appellate proceedings or administrative circulars precluded the prosecutions.

Analysis: The complaint contained specific averments that the partners were in charge of and responsible for the conduct of the firm's business during the relevant period, and it further alleged their concerted participation in fabricating false evidence, filing false returns, and deceiving the Income-tax Officer. At the stage of exercising inherent powers, only the allegations in the complaint and accompanying materials could be considered, and a prosecution could be quashed only if no offence was disclosed on the face of the complaint. The pleaded facts prima facie showed the ingredients of the alleged offences and were sufficient to proceed against the partners. The asserted settlement was only as to the quantum of concealed income, and no term barring prosecution could be inferred at this stage. The revised returns were filed only after search and after completion of the assessments on the original returns, so they did not extinguish the alleged criminality. Pending appeal against penalty orders was no bar to prosecution, and the administrative circular relied upon did not assist the petitioner because the prosecution had been launched when he was below the age threshold.

Conclusion: The complaints were not liable to be quashed, and the petitions were dismissed.

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