Specific averments required for vicarious tax prosecution; bare section 278B language cannot sustain complaint against accused persons.

A criminal complaint under sections 276CC, 276D and 278B of the Income-tax Act could not be sustained because it lacked specific averments showing how each petitioner was in charge of and responsible for the firm's business. Mere repetition of the statutory language in section 278B was held insufficient in a prosecution based on vicarious liability; the complaint had to disclose material linking each accused to the conduct of business during the relevant assessment year. As the record attributed signing and dealings with tax authorities to another accused, the foundation against the petitioners was found inadequate. The complaint and summoning orders were quashed, and the petitioners were discharged.

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Issues: Whether the criminal complaint under sections 276CC, 276D and 278B of the Income-tax Act, 1961 was liable to be quashed for want of specific averments showing that the petitioners were in charge of and responsible for the conduct of the business of the firm.

Analysis: The complaint merely repeated the language of section 278B and did not state the manner in which the petitioners were managing or able for the firm's affairs during the relevant assessment year. In a prosecution resting on vicarious liability, a bald assertion that an accused was in charge of and responsible for the business is insufficient; the complaint must disclose material indicating the role and responsibility of each accused. The record also showed that the complaint itself attributed the signing and correspondence with tax authorities to another accused, strengthening the absence of a proper foundation against the petitioners. On that basis, the material was found inadequate even for continuation of prosecution at the threshold stage.

Conclusion: The complaint and summoning orders against the petitioners were quashed, and they were discharged.

Ratio Decidendi: In a prosecution under section 278B of the Income-tax Act, 1961, the complaint must contain specific averments indicating how and in what manner each accused was in charge of and responsible for the conduct of the business; a mere reproduction of the statutory language is not enough to sustain prosecution.

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