TMI Blog1987 (7) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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-I, 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 Kanara, and having its branches all over India, as provided under section 285 of the Act, was required to submit returns in the prescribed form and verified in the prescribed manner of the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1980, which was replaced by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, the proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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, the learned counsel also relied upon various authorities. Mr. Chandrakumar, learned counsel for the respondent, refuting all those contentions submitted that the expression " person " as defined unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 offence under subsection (1) of section 276C, he shall be punishable, (i) in a case where the amount of tax, penalty or interest which would have been evaded, if the declara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 1974-75, on conviction, sentence of imprisonment is undoubtedly compulsory. As stated earlier, apart from the two contentions urged before the court below, the main and substantial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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 knowledge or intent can be made liable. Although under section 2(31) of the Act the definition of a person is wide enough to include a company or any juristic person, the word person could not have been used by Parliament in section 277 of the Act in the sense given in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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