False statement prosecution needs prima facie allegation of participation or abetment, plus proper sanction, to sustain criminal proceedings.

Criminal proceedings under the Income-tax Act cannot be sustained against persons against whom the complaint does not prima facie allege filing, verification, delivery of a false return or legally recognised abetment. The complaint attributed the impugned return only to one accused, and no specific averment connected the other applicants to the false statement or any abetment. Vicarious liability was not available under the relevant provision, and the later partner-liability provision was not retrospective. Prosecution was also unsupported for the abetment offence because sanction had been granted only for the false-statement offence. The proceedings were therefore quashed against the applicants not specifically implicated, while the case against the remaining applicant was left undisturbed.

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Issues: Whether the criminal proceedings could be quashed against the applicants who were not shown in the complaint to have made the false return or statement, and whether the prosecution was sustainable in the absence of sanction for the relevant offences.

Analysis: The complaint attributed the filing, signing and verification of the return only to one accused and did not contain any specific averment that the other applicants had delivered a false account or statement, made a false verification, or had abetted or induced the making of such false statement. On the face of the complaint, therefore, no prima facie offence was disclosed against them. The relevant provision dealing with false statements in verification or false accounts fastens liability on the person who makes or delivers the false statement and does not, by itself, create vicarious liability. The later provision creating liability of partners had come into force only after the relevant date and was not retrospective. The record also showed sanction only for the offence under the provision relating to false statements, and no sanction for prosecution under the provision dealing with abetment.

Conclusion: The proceedings were liable to be quashed against the applicants who were not shown to have committed or abetted the alleged offence, and the prosecution against them was unsustainable.

Final Conclusion: The application succeeded only to the extent that the criminal case was set aside against the applicants not specifically implicated in the complaint, while the proceedings against the remaining applicant were left undisturbed.

Ratio Decidendi: Criminal proceedings for offences under the Income-tax Act cannot be sustained against a person unless the complaint prima facie alleges his direct participation or legally recognised abetment, and prosecution for such offences must also be supported by the requisite sanction.

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