TaxTMI 
TaxTMI 
1999 (5) TMI 15
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....against the petitioners and the deceased partners of the firm, Kanhaiyalal Deepchand Jain, alleging commission of an offence punishable under section 276E/ 278B of the Income-tax Act, 1961. It is alleged that during the course of assessment proceedings for the year 1983-84 of applicant No.1, the assessee-firm, it was found that the firm repaid the loan amount in cash, i.e., otherwise than by account payee cheques or the draft, respectively, to Smt. Basanti Bai wife of Kanhaiyalal; Rajeshkumar Roopchand, Rs.1,000 and Rs.10,200 when the balance in their account was exceeding Rs.10,000. That after recording the evidence under section 200 of the Criminal Procedure Code, a criminal case was registered against the present petitioners and the de....
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....complaint, the complainant could not sue the petitioners for any criminal act unless the petitioners were shown to be running the affairs and to be responsible to the firm for the conduct of its business. Counsel submitted that in the present case no allegations have been made in the complaint to the effect that petitioners Nos.2 and 3 were in charge of and responsible to the firm for the conduct of its business at the time of commission of the alleged offence. As such applicants Nos. 2 and 3, though they are partners of the assessee-firm, cannot be prosecuted for tile alleged offence. Counsel contended that in view of the facts and circumstances of the case on hand, no useful purpose would be served by dragging the prosecution against the ....
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....ecution under the Income-tax Act with regard to the offence alleged to have been committed by a firm or company there should be a specific averment in the complaint that the directors or the partners were in charge of and responsible for the conduct of the business of the firm or the company at the time of commission of alleged offence. In the absence of such averment their prosecution is not sustainable in law." A similar principle is laid down by the Punjab and Haryana High Court in Sat Pal's case [1993] 200 ITR 139 as also by the Madras High Court in the cases of B. Rajagopal [1994] 208 ITR 702 and K. Subramanyam [1993] 199 ITR 723. On a perusal of the complaint filed by the non-applicant before the ACJM (Economic Offence), Indore, it ....