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Issues:
1. Maintainability of the complaint under sections 276C and 277 read with section 278B of the Income-tax Act, 1961. 2. Discharge of accused partners during the proceedings. 3. Liability of partners in a firm for criminal prosecution. 4. Validity of a second complaint for the same offences. 5. Grounds for dismissal of the complaint - limitation and lack of sanction. Issue 1: Maintainability of the complaint under sections 276C and 277 read with section 278B of the Income-tax Act, 1961: The Chief Judicial Magistrate dismissed the complaint against the firm and its partners, citing that only the active partner responsible for the conduct of the business could be prosecuted. The court found that only one partner, Ram Sarup, was actively involved, and others were dormant in business. The court held that since Ram Sarup had already been discharged of the same offences in a previous complaint, no second complaint was maintainable. The complaint was also deemed not maintainable due to the ground of limitation and lack of sanction from the appropriate authority as per section 279(1) of the Act. Issue 2: Discharge of accused partners during the proceedings: Two accused partners had passed away during the proceedings, leading to the discontinuation of proceedings against them. The court focused on the active involvement of Ram Sarup in the firm's operations and his previous discharge of the same offences, which influenced the decision regarding the maintainability of the complaint against him. Issue 3: Liability of partners in a firm for criminal prosecution: The court emphasized that only the partner responsible for the business's conduct at the time of the offence could be prosecuted. It was noted that the return of income and related documents were signed and verified by Ram Sarup alone, indicating his primary responsibility in the firm's financial matters. Issue 4: Validity of a second complaint for the same offences: The appellant argued for the validity of a second complaint based on subsequent developments after the initial discharge of the accused. However, the court held that no provision of law allowed for a second complaint for the same offences, especially when the discharge order had become final and no appeal or revision was made against it. Issue 5: Grounds for dismissal of the complaint - limitation and lack of sanction: The court dismissed the complaint based on the grounds of limitation in criminal proceedings and the absence of sanction from the appropriate authority. The appellant's challenge against these findings was refuted, highlighting the court's satisfaction with the Chief Judicial Magistrate's decision regarding the maintainability of the complaint. In conclusion, the High Court upheld the Chief Judicial Magistrate's decision to dismiss the complaint, emphasizing the legal principles governing the maintainability of criminal complaints in cases involving firm partners and the limitations on filing subsequent complaints for the same offences. The court found no grounds to interfere with the lower court's order and dismissed the application for leave to appeal.
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