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TMI Blog1997 (9) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Officer found the second accused and his wife visited Singapore and returned to Madras at 3.00 a.m. on June 22, 1982, that a sum of Rs. 54,480 was paid at that time as customs duty in respect of goods brought from Singapore, and this was relevant for the assessment year 1983-84. It is further alleged that this amount was paid out of a sum of Rs. 55,000 which was brought by the third accused being the son of the second accused. This sum was allegedly brought from the cash balance available with the first accused firm at Singampunery. When the Income-tax Officer examined the rough cash book of the first accused's head office at Singampunery, he found that the cash balance on June 21, 1982, was only Rs. 29,506.16, that there was an entry for the receipt of Rs. 35,000 from the accused's Madurai Sales Depot on June 23, 1982, but this entry was reversed by making a contra debit entry as on June 23, 1982. It is further stated that an entry made in the chitta showing the cash of Rs. 35,000 as received on June 22, 1982, and the Income-tax Officer also found that the entries on June 22, 1982, and June 23, 1982, contained erasures and overwriting and that the entries for the alleged tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the complaint given by the appellant/Department discloses the offences under various sections of the Indian Penal Code, a perusal of the charges discloses that the charges were restricted to the offences punishable under the Income-tax Act, namely, under sections 276C and 277 and there is no mention of the offences under the Indian Penal Code. Therefore, we are concerned only with the offences arising out of the provisions of the Income-tax Act, 1961. Even before the trial the third accused expired and, therefore, the trial was directed only as against the first and the second accused. The learned Chief Judicial Magistrate, on an analysis of the facts held that the second accused was not guilty of the offence on the ground that he had no mens rea to commit the offence as he was not in India at that time. According to the learned Chief Judicial Magistrate, he cannot be held guilty of an offence for which he was not a party and, therefore, there being no mens rea he cannot be found guilty of the offence. It is brought to my notice that the second accused has also expired during the pendency of this appeal and, therefore, it is not necessary for this court to consider the correctne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nghvi Bros. v. Union of India [1991] 187 ITR 219. The learned judge his held that a partnership being a juristic personality cannot be prosecuted for the offence under sections 276C(1), 277 and 278 of the Act. With due respect, the learned judge has not made any reference to the definition of person as occurring in section 2(31) of the Act or the statutory liability as arising under section 278B of the Act. The next ruling which is referred to by learned counsel for the respondent is reported in Geethanjali Mills Ltd. v. V. Thiruvenkadathan [1989] 179 ITR 558 (Mad). Even though the said judgment deals with the provisions of sections 276C, 277, 278, etc., of the Income-tax Act, the observation of the learned judge was specifically restricted only to the offence under the Indian Penal Code. In paragraph 12 of the judgment, the learned judge has dealt with only the offence arising out of the Indian Penal Code and as regards the feasibility of fastening criminal liability in the shape of sentence of imprisonment on a juristic personality like the company. It is only in the said context the learned judge has expressed, that a juristic personality cannot be subjected to bodily punishme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... punishment, it could, however, be fined and wherever a duty is imposed by a statute in such a way that a breach of the duty amounts to disobedience of the law, then the corporation will also be liable to be punished. On the facts of the particular case, the learned judge has held that since the second accused had submitted a false return and that the first accused firm of which second accused was a partner was also liable for the offence as such, knowledge or belief can be imputed to the first accused firm. Following the said judgment as well as after making elaborate reference to various other judgments of the Supreme Court and other High Courts on the subject, T. S. Arunachalam J., has held in Manian Transports v. S. Krishna Moorthy, ITO [1991] 191 ITR 1 (Mad) that though the firm was an impersonal body, it can be punished with sentence of fine. Therefore, having regard to the clear statutory provisions as mentioned above and the judgments of this court referred to above, it is clear that the first accused can be proceeded against for offence under the Income-tax Act and the rejection of the complaint by the learned Chief Judicial Magistrate on the only ground that a company ..... X X X X Extracts X X X X X X X X Extracts X X X X
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