TMI Blog2007 (2) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... anade, Mumbai. 3. Applicant's case in brief is that, the respondent no.1 is a partnership firm and respondent Nos. 2 to 11 are its partners and they were in charge and responsible to the accused no.1 for the conduct of its business. It was alleged by the Income Tax Department that the accused and its partners had concealed and evaded income to the tune of Rs.2,34,265/- and thereby committed an offence punishable under S. 276-C(1)(i) and 277(i) read with S. 278-B of the Income Tax Act, during the year 1979-80. The Income Tax Officer, after obtaining sanction from the Commissioner of Income Tax, filed complaint against the respondents / accused. 4. At the outset, it may be stated that respondent Nos. 2, 3, 5 and 6 were not served by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this Revision Petition, contending that the learned Additional Chief Metropolitan Magistrate committed serious error in appreciating facts and legal position while passing the impugned order. 5. After perusal of the impugned order, it becomes clear that as far as respondent Nos. 9, 10 and 11 are concerned, they were not the partners of the firm on 31 st October 1978, when the alleged offence of evading the tax was committed. In paragraph 7 of the impugned order, the learned Additional Chief Metropolitan Magistrate noted that even in the order passed by the Second Income Tax Officer, B.S.D. (South) Bombay, it is averred that the firm was re-constituted as two partners Mr. B. C. Krishnan and Y. K. Mani had retired from 31-10-1987 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in paragraph 3 of the complaint, it was specifically mentioned that accused No.1 is a registered firm and at the material time, accused Nos. 2 to 11 were partners of accused No.1 and were the persons in-charge and responsible to accused no.1 for the conduct of its business. Thus, in the complaint, there was specific averment that all the accused persons were in-charge of as well as responsible for the conduct of business of the firm. Whether accused Nos. 4, 7 and 8 were admitted to the partnership firm only for profits and whether they were sleeping or dormant partners and not active partners, could be decided on the basis of material which could be produced at the time of trial. In fact, this could be decided on the basis of the deed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out that the view taken by the different High Courts in respect of issuance of notice is not approved by the Supreme Court and the Supreme Court has held that notice before according sanction to prosecution is not necessary and that the Section 279(2) of the Income Tax affords only an opportunity to compound the matter, but it does not give a right to the party to insist for compounding. In Union of India and Anr. Vs. Banwarilal Agarwal [1998] 238 ITR 461 (SC) ; [1998] 7 SCC, 652, Their Lordships observed as follows (page 463) : "We further find that sub-section (2) of Section 279 is a provision which enables the Chief Commissioner or the Director General to compound any offence either before or after the institut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the firm, at the relevant time, but as far as respondent Nos. 1, 4, 7 and 8 are concerned, the order cannot be sustained. As far as accused Nos. 2, 3, 5 and 6 are concerned, their names are already deleted, and therefore, they were not affected by the impugned order. In view of this, the impugned order to the extent of accused Nos. 1, 4, 7 and 8 will have to be set aside. 10. The Revision Application is partly allowed and the impugned order discharging accused persons to the extent of accused Nos. 1, 4, 7 and 8 stands set aside and quashed. C.C. No.7092/S of 1990 is restored to the file of the trial Court for proceeding as per law. Notices shall be issued to the accused Nos. 1, 4, 7 and 8. As the alleged offence was committed in Oc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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