JUDGMENT
Pratap Singh, J.
1. The accused in C.C. Nos. 31 to 34 of 1992 on the file of the Additional Chief Judicial Magistrate (Economic Offences), Madurai have filed these petitions under section 482 of the Code of Criminal Procedure to call for the records in the above cases and to quash the same.
2. The short facts are : In C.C. No. 31 of 1992, the respondent has filed a complaint against the petitioners for an offence punishable under section 276CC read with section 278B of the Income-tax Act, 1961. The allegations in it are briefly as follows :
3. The first accused is a registered firm which comes under section 44AB of the Act. Accused Nos. 2 to 4 are the partners of the first accused firm and they are responsible for the business of the first accused firm. The first accused is an assessee to income-tax. For the assessment year 1985-86, the accused had to submit the return of income on or before July 31, 1985, as per section 139(1) of the Act. But the accused had not filed the return within July 31, 1985. Therefore, a notice under section 148 of the Act was issued on December 4, 1986. The accused submitted the return only on August 26, 1986, signed by the third accused, before the Income-tax Officer, Dindigul. The accused wilfully did not file the return for the assessment year 1984-85 on or before July 31, 1985, even though the first accused is an assessee and accused Nos. 2 to 4 are fully aware that the return of income should be filed on or before July 31, 1985, on behalf of a first accused. They have wilfully filed the return of income with a delay of 25 months and for filing of the return of income belatedly, penalty proceedings were initiated. The accused wilfully delayed filing of the return of income even after obtaining the audit report on March 31, 1986, and after issue of notice under section 148 of the Act on December 4, 1986. The acts of the accused are punishable under section 276CC read with section 278B of the Act and hence the complaint.
4. On similar allegations, for the delayed filing of the return of income for the years 1986-87, 1988-89 and 1989-90, C.C. Nos. 32 to 34 of 1992, respectively, were filed.
5. Mr. S. Subbiah, learned counsel, appearing for the petitioners, would submit that as regards C.C. No. 31 of 1992, in paragraph 5 of the complaint it is alleged that the return of income was signed by the third accused and while so, accused Nos. 2 and 4 who are the other partners of the first accused firm cannot be proceeded with. He would add that in the complaints in C.C. Nos. 32 to 34 of 1992, the name of this particular partner accused is not mentioned as the person who signed the return of income and that inasmuch as the third accused has signed the return of income for 1985-86, it can be taken he only signed the return of income and he alone can be proceeded with and other partners, viz., accused Nos. 2 and 4, cannot be proceeded with. Failure to file the audit report within the specified time is violation of section 44AB of the Act and penalty has been imposed for the said delayed filing of the audit report and on appeals filed before the Appellate Assistant Commissioner, those penalties were set aside and in those orders it was held that there was no wilful delay in filing the audit report. Learned counsel would add that that finding will have a bearing on the alleged delayed filing of the income-tax return, inasmuch as those audit reports were filed along with the income-tax returns and so, it cannot be stated that there was a delay in filing the return of income. According of sanction is a sine qua non for filing of the complaint, the sanction orders permitting the respondent to file these complaints do not refer to the orders passed by the Appellate Assistant Commissioner on July 16, 1992, holding that there was no wilful delay in filing the audit reports and they were not considered and hence they are defective, consequently, the complaints and the entire proceedings are liable to be quashed.
6. I have heard Mr. K. Ramasamy, learned standing counsel appearing for the respondent.
7. I have given careful consideration to the submissions made by counsel on both sides. I shall consider them seriatim. To consider the first submission, the relevant allegation in the complaint in C.C. No. 31 of 1992 need be stated. Inasmuch as the allegations in the other complaints are similar, I shall confine myself to the allegations made in C.C. No. 31 of 1992. In paragraph 2 of the complaint, it is stated that the first accused is a registered firm and accused Nos. 2 to 4 are all partners responsible for the business of the first accused firm. In paragraph 4, it is stated that for the assessment year 1985-86, the accused had to submit the return of income on or before July 31, 1985, but the accused had not filed the same within that period and hence a notice was issued on December 4, 1986. In the same paragraph, it is alleged that on August 26, 1986, the return of income was filed, signed by the third accused. In paragraph 6, it is alleged that the accused wilfully did not file the return of income before the income-tax authorities on or before July 31, 1985. It is further alleged that accused Nos. 2 to 4 are fully aware that the return of income should be filed on or before July 31, 1985, on behalf of the first accused. In spite of that they have filed the return of income with a delay of 25 months and for that penalty proceedings were initiated. It is further alleged that the accused have wilfully delayed the filing of the return of income even after obtaining the audit report on March 31, 1986, and after issue of notice on December 4, 1986. I shall refer to section 278B of the Act which reads as follows :
“Offences by companies. – (1) Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was 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 shall be liable to be proceeded against and punished accordingly.”
8. The allegations, which I have referred to above and which find a place in the complaints, do satisfy the requirements of section 278B of the Act. Hence, I am unable to accept the submission made by learned counsel for the petitioners that necessary allegations to impose a criminal liability upon accused Nos. 2 and 4 are not available in the complaints.
9. In Sham Sunder v. State of Haryana , the apex court had held that the partner responsible for carrying on the business and who during the relevant time was in charge of the business, can only be convicted. In Municipal Corporation of Delhi v. Ram Kishan Rohtagi, , the apex court had held that proceedings against an accused in the initial stages can be quashed only if on the face of the complaint or the papers accompanying the same, no offence is constituted. In other words, the test is that taking the allegations and the complaint as they are, without adding or subtracting anything, it no offence is made out, then the High Court will be justified in quashing the proceedings in exercise of its powers under section 482, Criminal Procedure Code. In that case, the complaint was filed against the company, its directors and the manager. So far as the directors are concerned, there is not even a whisper nor a shred of evidence nor anything to show, apart from the presumption drawn by the complainant, that there is any act committed by the directors from which a reasonable inference can be drawn that they could also be vicariously liable. In those circumstances, it was held that no case against the directors has been made out ex facie on the allegations made in the complaint and the proceedings against them were quashed by the High Court. Such is not the case here. In these cases, allegations are made in the complaints which make out an offence against all the partners. Learned counsel also relied on Shital N. Shah v. ITO [1991] 188 ITR 376 (Mad) in which case, Arunachalam J. had referred to Municipal Corporation of Delhi v. Ram Kishan Rohtagi, , and had taken a similar view. Since on the facts, the present case is totally different, inasmuch as necessary allegations are made, these rulings are not applicable to this case.
10. Regarding the second submission, I am unable to accept the submission made by learned counsel for the petitioners in view of the positive allegation made in the complaint in C.C. No. 31 of 1992 that even after obtaining the audit report on March 31, 1986, the return of income was not filed. In this case, the return of income was filed only on August 26, 1986. The finding of the Appellate Assistant Commissioner that there has been no wilful default in filing the audit report has no bearing on these complaints. That apart, failure to file the audit report within a specified time in cotravention of section 44AB of the Act and penalty imposed thereon is distinct from the failure to file the return of income within the specified period which is in contravention of section 276CC of the Act. Those sections are independent and one cannot be tagged to the other and taking that view of the matter, I am unable to accept the second submission also.
11. I shall next pass on to the third and the last submission. Regarding the sanction order, the only infirmity alleged by learned counsel for the petitioners was that the sanction order does not at all refer to the order of the Appellate Assistant Commissioner dated July 16, 1992, in which the appellate authority had held that there was no wilful delay in filing the audit report. For the reasons which I have given in my discussion, the failure to consider the sanction order, will not vitiate the order. Learned counsel for the petitioners drew my attention to certain passages in the order of the appellate authority to which I shall refer now. In the order dated July 16, 1992, the appellate authority has stated in paragraph 5 as follows :
“Therefore, even though the appellant did not obtain the audit report by the specified dates, it has to be noted that the audit reports were filed along with the returns on later dates. Therefore, it cannot be said that there was a deliberate default on the part of the appellant, even though strictly speaking there was a technical default on the part of the appellant.”
12. Lower down in the same paragraph, it has been stated as follows :
“On the same analogy even if it is held that obtaining of the audit report under section 44AB by the specified dates has to be treated as mandatory, no penalty under section 271B can be levied since the appellant had filed the audit report along with the return of income.”
13. From the later observation made by the appellate authority, learned counsel for the petitioners would submit that these observations would have a bearing on the alleged belated filing of the return of income. I am clear that these observations cannot project upon the wilful delayed filing of the return of income which is concerned with section 276CC of the Act. Hence, the third submission also fails.
14. Since none of the submissions made by learned counsel for the petitioners finds acceptance with me, the inevitable result is that these petitions have to fail. According, these petitions fail and they are dismissed.