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TMI Blog1987 (7) TMI 499X X X X Extracts X X X X X X X X Extracts X X X X ..... onomic Offences, Bangalore, represented by its managing director, Sri P. K. Alva, has sought to challenge the legality and correctness of the order dated February 9, 1983, whereby the application made for discharging it of the offences alleged has been rejected. The criminal cases have been instituted on private complaints filed by the Sixth Income-tax Officer, Mangalore Circle, Mangalore, on being authorised by the Commissioner of Income-tax, Karnataka-1, Bangalore, as provided under section 279 of the Income-tax Act, 1961, hereinafter referred to as "the Act ", on the allegation that M/s. Vijaya Bank Ltd. (A-1), being a scheduled bank and a company registered under the Indian Companies Act, with its registered office at Mangalore, South ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer and chairman, Mr. M. Sundar Ram Shetty, in the court of the JMFC, Mangalore. During enquiry, when the evidence was being recorded, on the application filed by the complainant-respondent herein, the cases were transferred from the court of the Magistrate at Mangalore to the court of the Presiding Officer, Special Court for Economic Offences at Bangalore. Later on, when the chairman of the petitioner-company, Mr. M. Sundar Ram Shetty died, the successor chairman, Mr. B.T.R. Punja, was arrayed as party representing the petitioner-company. The petitioner-company sought for discharge of the offence, firstly, on the ground that the banking undertaking of Vijaya Bank Ltd., having been nationalised with effect from April 15, 1980, under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these two grounds urged before the Magistrate for discharge of the petitioner-company, also submitted that since the offence under section 277 is punishable with rigorous imprisonment for not less than six months, but extending to seven years, and no discretion is left to the court in the matter of imposition of sentence of imprisonment on conviction and since the petitioner-company is a body corporate and even on conviction, imposition of sentence of imprisonment being not possible, no useful purpose will be served in proceeding with the enquiry and trial as against the petitioner-company and, therefore, the criminal proceedings instituted as against the petitioner deserved to be quashed. In support of this contention, learned counsel also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine; ( ii )in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine." Section 278, with the aid of which the other accused are sought to be prosecuted for the offence punishable under section 277 of the Act, reads as follows: "If a person abets or induces in any manner another person to make and deliver an account or a statement or declaration relating to any income chargeable to tax which is false and which he either knows to be false or does not believe to be true or to commit an offen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e part of, any director, manager, secretary, or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation. For the purposes of this section, ( a )'company' means a body corporate, and includes ( i )a firm ; and ( ii )an association of persons or a body of individuals whether incorporated or not; and ( b )'director', in relation to ( i )a firm, means a partner in the firm; ( ii )any association of persons or a body of individuals, means any member controlling the affairs thereof." Obviously, for the offences alleged as having been committed during the period 1971-72 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istic person, having regard to the fact that sentence of imprisonment has been made compulsory, it cannot be said that the expression "person" has been used in that sense, inasmuch as it is not possible for the court on conviction to impose a sentence of imprisonment. In the case of Kusum Products Ltd. v. S. K. Sinha [1980] 126 ITR 804, considering these provisions, a Division Bench of the Calcutta High Court has observed as follows (p. 808): "......mens rea is an essential ingredient of an offence under section 277 of the Act is clear from the section itself and only an actual person who does any of the acts indicated therein with a specific know ledge or intent can be made liable. Although under section 2(31) of the Act the definiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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