S.C. Gupta Vs. State and anr.

S.C. Gupta vs State and anr.

Disposition Petition dismissed Court Delhi Decided Oct 15, 2001

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Citation: sooperkanoon.com/709558
Court: Delhi High Court
Judge: K.S. Gupta, J.
Decided On: Oct 15, 2001
Case Number: Crl. M. (M.) No. 2823 of 2001
Subject: Direct Taxation
Disposition: Petition dismissed

Case Summary

AI-generated summary - not the official court judgment text.

a) In the instant case an application was filed for quashing of complaint on the ground that neither the income tax return nor the balance sheet was signed by the petitioners - On the question as to whether the complaint was liable to be quashed, the ruling was in negation - Further, in view of the fact that pre-cha...

Key legal issue: Direct Taxation
Outcome / disposition: Petition dismissed
Acts & sections: Income Tax Act, 1961 - Sections 276CC, 278B and 278B1; Code of Criminal Procedure (CrPC) , 1973 - Sections 482

Parties & Advocates

Appellant / Petitioner

S.C. Gupta

Advocate Vijay Bahuguna, Senior Adv. and; Alok Aggarwal, Adv

Respondent

State and anr.

Advocate B.D. Jolly and ; Ajay Jha, Advs.

Legal References

Acts: Income Tax Act, 1961 - Sections 276CC, 278B and 278B1; Code of Criminal Procedure (CrPC) , 1973 - Sections 482
Cases Referred: and State of Haryana v. Ch
Reported In: [2002]112CompCas121(Delhi); [2002]257ITR272(Delhi)

Excerpt

a) in the instant case an application was filed for quashing of complaint on the ground that neither the income tax return nor the balance sheet was signed by the petitioners - on the question as to whether the complaint was liable to be quashed, the ruling was in negation - further, in view of the fact that pre-charge evidence had disclosed that the accused were the directors at the time of assessment year, it was held that complaint would not be legally set asideb) in the instant case that dealt with the offence by the company under section 276-cc and 278-b of the income tax act, 1961, it was ruled that non-impleadment of all the directors would not lead to quashing of complaint - further, it was ruled that non-joining of remaining nine directors in the complaint would have no significance at the stage - accordingly, the petition was dismissed without any merit - - ltd--issuing non-bailable warrants against the petitioner as well as proceedings under sections 82 and 83 of the code of criminal procedure, vide orders dated january 17, 2001, may 1, 2001 and july 11, 2001, and stay the arrest of the petitioner till the final disposal of this petition. , says that where an offence under the act is committed by a company, every person who, at the time of commission of offence, was in charge and responsible to the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and liable to be proceeded against......vicarious liability of directors, etc., says that where an offence under the act is committed by a company, every person who, at the time of commission of offence, was in charge and responsible to the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and liable to be proceeded against. at this stage what is to be seen is whether the allegations made in the complaint and/or the statements of witnesses recorded in support thereof taken at their face value make out absolutely no case against the accused or the complaint does not disclose the essential ingredients of the offence which is alleged against the accused (see municipal corporation of delhi v. ram kishan rohtagi : 1983 crilj159 and state of haryana v. ch, bhajan lal : 1992 crilj527 ). considering the allegations made in the aforesaid para. 3 and the statement of pw-1 this complaint qua the petitioner cannot be legally quashed under section 482 of the code of criminal procedure. the non-joining of remaining nine directors in the complaint as accused has no relevance whatsoever at this stage. the petition in regard to prayer (c), thus, deserves to be dismissed being without any merit.7. consequently, the petition is dismissed.

Full Judgment

K.S. Gupta, J.

1. In this petition filed under section 482 of the Code of Criminal Procedure, 1973, the prayers made are as under :

'(a) Pass ad interim ex parte orders staying the operation of the orders passed by Sh. J.P.S. Malik, ACMM, Tis Hazari, in Complaint No. 429 of 1990 bearing title--Amit Jain, Asstt. CIT v. Ocean Electronics Pvt. Ltd--issuing non-bailable warrants against the petitioner as well as proceedings under sections 82 and 83 of the Code of Criminal Procedure, vide orders dated January 17, 2001, May 1, 2001 and July 11, 2001, and stay the arrest of the petitioner till the final disposal of this petition.

(b) Recall the orders dated August 22, 2000, issuing non-bailable warrants and orders dated January 17, 2001, May 1, 2001 and July 11, 2001, issuing process under sections 82 and 83 of the Code of Criminal Procedure.

(c) Quash the complaint and proceedings against the petitioner of Complaint No. 429 of 1990 bearing title--Amit Jain, Asstt. CIT v. Ocean Electronics Pvt. Ltd, -Pending before Sh. J. P. S. Malik, ACMM, Delhi.'

2. In the course of arguments the prayers as at (a) and (b) were not pressed by Sh. Vijay Bahuguna, senior advocate, appearing for the petitioner.

3. In regard to prayer at (c), the submission advanced on behalf of the petitioner was that Ocean Electronics Pvt. Ltd. (for short 'OEPL') had 11 directors at the relevant time but in the complaint filed for the offence under section 276CC read with section 278B of the Income-tax Act (for short, the 'Act'), the concerned Asstt. Commissioner of Income-tax, the complainant, had chosen to implead only the petitioner as accused No. 3 and Vijay Mehta as accused No. 2 in addition to OEPL as accused No. 1. Criminal liability for late submission of income-tax return by OEPL for the assessment year 1988-89 cannot be fastened against the petitioner as he was not involved in the management of affairs of the company and had also resigned as director on March 25, 1993. It was pointed out that neither the income-tax return nor the balance-sheet filed along with the complaint are signed by the petitioner.

4. Para. No. 3 of the complaint EX.PW1/A which is material, is reproduced below :

'That as per the information available on the record, during the previous year, relevant to the assessment year 1988-89, accused Nos. 2 to 3 were the directors of accused No. 1. They were exercising all powers to control the day-to-day business of accused No. 1. They were also signing and filing documents on behalf of accused No. 1. They were, thus, in charge of and responsible to accused No. 1 for the conduct of its day-to-day business.'

5. By way of pre-charge evidence, part statement of Amit Jain, Asstt. Commissioner of Income-tax, complainant was recorded by the ACMM on August 7,1992. It is in his deposition that accused Nos. 2 and 3 were the directors of the accused company for the assessment year 1988-89 and were exercising all the powers to control day-to-day business of the company.

6. Section 278B(1) of the Act which deals with the vicarious liability of directors, etc., says that where an offence under the Act is committed by a company, every person who, at the time of commission of offence, was in charge and responsible to the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and liable to be proceeded against. At this stage what is to be seen is whether the allegations made in the complaint and/or the statements of witnesses recorded in support thereof taken at their face value make out absolutely no case against the accused or the complaint does not disclose the essential ingredients of the offence which is alleged against the accused (see Municipal Corporation of Delhi v. Ram Kishan Rohtagi : 1983 CriLJ159 and State of Haryana v. Ch, Bhajan Lal : 1992 CriLJ527 ). Considering the allegations made in the aforesaid para. 3 and the statement of PW-1 this complaint qua the petitioner cannot be legally quashed under section 482 of the Code of Criminal Procedure. The non-joining of remaining nine directors in the complaint as accused has no relevance whatsoever at this stage. The petition in regard to prayer (c), thus, deserves to be dismissed being without any merit.

7. Consequently, the petition is dismissed.

Same Court & Year Delhi · 2001 Same Parties S.C. Gupta vs State and anr. Same Subject Direct Taxation Same Judge K.S. Gupta, J. Acts & Sections Income Tax Act, 1961 - Sections 276CC, 278B and 278B1; Code o...

Direct Taxation