TaxTMI 
TaxTMI 
2026 (1) TMI 1025
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....of the respondent that post-demonetisation in the year 2017 there were cash deposits to the tune of Rs. 68.71 Crores made into the bank of the Partnership Firm viz., first accused, in which the second accused and the third accused are the Partners; that the accused did not have the requisite sources to make such a huge deposits; that the accused could not produce the source of making such huge deposits; that the income declared during the previous years was very less; that the sudden increase in profits declared by the first accused is improbable and does not commensurate with the business and financial standing of first accused and hence, first accused along with second accused, who is its Managing Partner and third accused, who is the Director, are jointly liable for the aforesaid offence. (ii) The petitioners sought for discharge on various grounds before the trial Court. The learned Judge dismissed the discharge petitions on the ground that the Court at the stage of charge framing cannot shift and weigh the evidence and that the respondent has made out a prima facie case to proceed further against the petitioners. Being aggrieved, the petitioners are before this Court. 3.....
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....ra vs. The State of Tamil Nadu, reported in 2025-1-LW(Crl) 848. 5.(i) Ms.M.Sheela, learned Special Public Prosecutor (Income Tax cases) per contra submitted that the turn over of the firm for the assessment year 2015-16 was Rs. 2,31,449/-; for the year 2016-17 was Rs. 1,70,203/-; and for the year 2017-18, it was raised to Rs. 24,36,212/- and such being the financial status of the firm in the previous years, the claim of the firm that they had made a sale of Rs. 68 Crores, is a concocted story; that the documents filed by the respondent would show that the firm had an over due of Rs. 4,93,77,687.51 as on 05.11.2016 and it is therefore impossible to believe that an amount of Rs. 68.17 Crores was the turn over of the firm and was deposited post-demonetisation; and that the petitioners are therefore bound to explain as to why they had kept an outstanding balance of Rs. 4.93 Crores, when they had cash of Rs. 68 Crores. (ii) The learned Special Public Prosecutor also submitted that the respondent had examined several witnesses to establish that the petitioners had filed bogus bills and the registration numbers of the vehicles shown in the bills are that of two-wheelers and not of l....
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....e was that the company destroyed a few trees belonging to the Forest Department using a JCB machine. In the facts of that case, the Hon'ble Supreme Court had held that there is no evidence to suggest that the Managing Director was aware of the acts committed by its employees. In fact, the company in that case was not made an accused. In such circumstances, the Hon'ble Supreme Court held that the Managing Director cannot be made liable for acts committed by its employees vicariously, especially since the company itself was not made an accused. Therefore, the said judgment relied upon by the learned counsel for the second accused would be of no avail to him. 8. Similarly, the judgment of this Court in Umanga Vohra's case [cited supra], relied upon by the learned counsel for the petitioners/Accused 1 and 2, also would not be applicable to this case, as that was a prosecution under the Drugs and Cosmetics Act wherein the officer had been specifically named in the licence and instead of prosecuting the said person, the Managing Director was sought to be prosecuted in the absence of any allegation that he was aware that the drugs so manufactured were not of standard qualit....
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....emerge: (i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction. (ii) Section 141 does not make all the Directors liable for the offence. The criminal liability can be fastened only on those who, at the time of the commission of the offence, were in charge of and were responsible for the conduct of the business of the company. (iii) Vicarious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 only if the requisite statements, which are required to be averred in the complaint/petition, are made so as to make the accused therein vicariously liable for offence committed by the company along with averments in the petition containing that the accused were in charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with. (iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred. ....