Income-tax prosecutions may proceed against companies and officers despite pending appeals, and sworn statements can be recorded in enquiry.

A company or firm may be prosecuted for Income-tax Act offences along with the officers in charge, because the inability to impose imprisonment on a juristic person does not defeat prosecution. Pendency of appellate proceedings against the assessment does not bar criminal prosecution for offences under sections 276C and 277, and the criminal court must decide the case independently on the evidence before it. The note also states that the Assessing Officer has power to examine persons on oath and record sworn statements during enquiry, including in relation to the return and documents filed.

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Issues: (i) whether a company or firm could be prosecuted for offences under the Income-tax Act along with its responsible officers; (ii) whether pendency of appellate proceedings against the assessment barred criminal prosecution under the Income-tax Act; (iii) whether the Assessing Officer had power to record sworn statements under the Income-tax Act.

Issue (i): whether a company or firm could be prosecuted for offences under the Income-tax Act along with its responsible officers.

Analysis: The statutory scheme dealing with offences by companies and the procedure for trial of corporations permits prosecution of a juristic person and of the persons in charge of its affairs. The inability to impose imprisonment on a company does not make the prosecution itself incompetent. Liability of the responsible officers is connected with the commission of the offence by the company, and the company or firm may be impleaded for establishing the alleged offence.

Conclusion: The objection to prosecution of the company or firm was rejected and the issue was decided against the petitioners.

Issue (ii): whether pendency of appellate proceedings against the assessment barred criminal prosecution under the Income-tax Act.

Analysis: Pendency of proceedings under the Act does not create any legal bar to institution of prosecution for offences under sections 276C and 277. A possible success in appeal does not prevent prosecution, and the criminal court must decide the case independently on the evidence before it, though it may take note of the outcome of proceedings under the Act where appropriate.

Conclusion: The pending appeal did not bar the criminal proceedings and the issue was decided against the petitioners.

Issue (iii): whether the Assessing Officer had power to record sworn statements under the Income-tax Act.

Analysis: The powers conferred on the Assessing Officer include the power to examine persons on oath in the course of enquiry. Recording sworn statements of persons connected with the return and documents filed was within that statutory power.

Conclusion: The challenge to the recording of sworn statements failed and the issue was decided against the petitioners.

Final Conclusion: The inherent jurisdiction under section 482 of the Code of Criminal Procedure was not available to quash the prosecution, and the petitions failed.

Ratio Decidendi: A company or firm may be prosecuted for income-tax offences, criminal prosecution is not barred by pending appellate proceedings under the Act, and the criminal court must proceed independently on the evidence before it.

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