Corporate criminal liability fails where imprisonment is the only punishment and no effective sentence can be imposed.

A company is treated as a "person" under the Income-tax Act, but the commentary notes that prosecution cannot be carried to conviction where the relevant offences prescribed imprisonment as the only punishment. Because a juristic person cannot undergo bodily imprisonment, and the statute did not provide a separate fine or any discretion to substitute punishment, no effective sentence could be imposed on conviction. Section 305 of the Code of Criminal Procedure was noted as dealing with representation of a corporate accused, but not curing this substantive impossibility. The complaint proceedings against the company were therefore treated as unsustainable.

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Issues: Whether a company, being a juristic person, can be prosecuted under sections 277 and 278 of the Income-tax Act, 1961, where the punishment prescribed at the relevant time was imprisonment only and no fine was separately provided.

Analysis: The term "person" in the Income-tax Act includes a company, so a company is prima facie amenable to prosecution. However, the offence alleged was committed when sections 277 and 278 prescribed rigorous imprisonment as the compulsory punishment. A corporation cannot undergo bodily punishment, and where the statute makes imprisonment the only possible sentence, the court cannot meaningfully proceed to trial because no effective sentence can be imposed on conviction. The use of the expression "shall be punishable" leaves no discretion to substitute or omit punishment. Section 305 of the Code of Criminal Procedure, 1973, which contemplates a representative for a juristic person, does not alter the substantive impossibility of imposing imprisonment on a company.

Conclusion: A company cannot be prosecuted to conclusion under sections 277 and 278 of the Income-tax Act, 1961, when the only prescribed punishment is imprisonment, and the prosecution against the company is unsustainable.

Final Conclusion: The complaint proceedings against the company were quashed because the alleged offences, as punishable on the relevant dates, could not result in a legally effective sentence against a corporate body.

Ratio Decidendi: Where the only punishment prescribed for an offence is imprisonment, a juristic person cannot be validly prosecuted to conviction because no effective sentence can be imposed on it.

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