TMI Blog1990 (8) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... e under section 276B read with section 278B of the Income-tax Act, 1961. The allegation against them is that they had failed to deduct and remit the tax deducted at source under section 194A of the Income-tax Act and credit the same to the Government of India within the time prescribed under the rules. These four prosecutions have been initiated for different assessment years. In these petitions filed under section 482, Criminal Procedural Code, to call for the records and quash the pending proceedings in so far as they relate to the petitioners, Mr. V. Gopinath, learned counsel appearing on behalf of the petitioners, contended that, in the complaint, except stating that, at the material time, the petitioners, who were partners of the firm were in charge of, and responsible for, the conduct of the business of the firm, nothing more had been alleged by reference to any act performed by them, even to remotely connect them with the offences alleged. He further contended that, under section 204(iii) of the Income-tax Act, the "person responsible for paying" meant, in the case of credit or, as the case may be, payment of any other sum chargeable under the provisions of the Act, "the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fences under section 276B read with section 278B of the Income-tax Act He further contended that the actual responsibility exercised by each one of the partners would relate to the stage of evidence and the complaint need not contain such details and, therefore, it will not be open, in the exercise of inherent powers, to quash the pending proceedings without affording an opportunity to the prosecution to let in evidence about the individual liability of each one of the partners of the firm. I have carefully considered the rival contentions of either counsel. The words "any person who is responsible for paying" found in section 194A of the Act have to be read in conjunction with section 204 of the Act which furnishes the meaning of "person responsible for paying". The contravention alleged in these prosecutions relates to section 194A of the Act and this contravention is covered under section 204(iii) of the Act. This provision makes it abundantly clear that if the payer is a company, the company itself including the principal officer thereof will be the "person responsible for paying". If that be so, it is fairly apparent that the company itself including the principal officer th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referring to Ram Kishan's case, AIR 1983 SC 67. In the later case, apart from the general allegation of the directors being in charge of, and responsible for, the conduct of the business of the company, at the time of the commission of the offences, the complaint had given complete details of the roles played by the respondents and the extent of their liability. It was not a case of merely drawing a presumption without any averment, for clear averments were made regarding the active role played by the respondents and the extent of their liability. In Purshotam Dass Jhunjhunwala's case, AIR 1983 SC 158, the trial was allowed to be proceeded with. Applying the law laid down by the Supreme Court in both these cases, it is clear to my mind that the allegations in the complaint are only a mere repetition of the section and no details have been given about the role played by any of the petitioners and the extent of their liability. If that be so, the prosecutions cannot be allowed to be proceeded with. It must also be noticed that the Supreme court in Sham Sunder v. State of Haryana [1990] 67 Comp Cas 1, AIR 1989 SC 1982, had the following observations to make (headnote of AIR) : "Mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to be proceeded against and punished." It is clear that the learned judge had no occasion to consider the issue involved in these prosecutions. We are riot even concerned with a managing director, and all that the complaint states is that the petitioners were the partners of the firm, shown as the first accused, at the relevant time. In Bhagat Singh v. ITO [1985] 152 ITR 82 (P H), K. P. S. Sandhu J. stated that a complaint against all partners was valid, if false statements concealing income had been made in the return submitted by the firm signed by one of the partners only, if the balance-sheet annexed thereto had been signed by all the partners. Obviously, even that contingency does not arise on the facts of the present cases. A decision of the Supreme Court in Agrawal Trading Corporation v. Assistant Collector of Customs [1972] 42 Comp Cas 532 ; AIR 1972 SC 648, was then relied upon for the proposition that once it was found that there had been a contravention of any of the provisions of the Foreign Exchange Regulation Act read with the Sea Customs Act by a firm, the partners who were in charge of the firm's business and were responsible for the conduct of the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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