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2007 (4) TMI 170 - HC - Income TaxOffences and prosecution - The trial court levied penalty on the accused firm for an offence contemplated u/s 276C(1) of the Act for concealment of income and discharged the partners of the accused on the ground that they were not in charge at the time of offence - HC also confirmed the order of trial court
Issues:
1. Discharge of accused under Section 245 of Cr. P.C. 2. Prima facie case against accused in C.C.No.127 of 1991. Issue 1: Discharge of accused under Section 245 of Cr. P.C.: The revision was filed against the order of the II Additional Sessions Judge, Coimbatore, which dismissed the petition of the accused seeking discharge from the offence alleged in C.C.No.127 of 1991. The Sessions Judge allowed the revision, setting aside the order and discharging the accused. The main contention was whether the accused could be prosecuted despite the penalty imposed by the Income Tax Department. The Special Public Prosecutor argued that penalty and prosecution can coexist, citing legal precedents. The Judge found the Sessions Judge's reasoning, based on the penalty imposition, to be erroneous, as penalty does not preclude prosecution under the Income Tax Act. Issue 2: Prima facie case against accused in C.C.No.127 of 1991: The Sessions Judge discharged the accused based on two grounds. Firstly, regarding the concealment of income by the A1-partnership firm, the penalty was imposed, but there was no evidence implicating the other accused. The defense argued that only the managing partner was responsible, supported by the absence of material connecting the other accused to the concealment. The Special Public Prosecutor highlighted discrepancies in the evidence and the complaint filed. The Judge referred to legal cases emphasizing the need to show responsibility for the conduct of the business to prosecute partners. The Judge concluded that there was no evidence showing the other accused were in charge or responsible for the firm's affairs, leading to the decision to proceed only against A1, represented by the managing partner. In conclusion, the revision was partly allowed, directing the prosecution against A1 to proceed, represented by the managing partner. The trial court was instructed to conclude the matter within three months.
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