JUDGMENT
Malik Sharief-ud-Din, J.
(1) This judgment will dispose of seven more petitions Cr. M(M) No. 711/85, Cr. M(M) 1041/85 Cr. M(M)1043/85 all titled as Parmeet Singh Sawney v. Dinesh Verma, I.T.O. and others as also Cr. M(M) 1363/85, Cr. M(M) 1364/85, Cr. M(M)1365/85and-Cr. M(M) 1366/85 all titled as Paramjeet Kaur and others v. Dinesh Verma, Ito and others.
(2) The petitions are in two sets : one set pertaining to the prosecution of the petitioners under section 276-B of Income-tax Act relating to the assessment year 1971-72 (Accounting year 1970-71). The other set of petitions is in respect of the prosecutions initiated against the petitioners under section 276(B) of the Income-tax Act for the assessment year 1974-76 (Accounting year 1973-74). The persons who are being prosecuted in the aforesaid prosecution are petitioners Harjeet Kaur, Smt. Veera Wali, Jaspal Singh, Inderjit Singh. Amrik Singh and Parmeet Singh.
(3) The brief allegations on the basis of which prosecutions have been initiated are that the petitioners are partners of firm M/s. Eagle Installments and at the time of commission of the offence they were in charge and responsible to the firm for the conduct of its business. Apparently, the petitioners are made vicariously liable for the act of commission of the firm. The case against the petitioners is that they failed to deduct income-tax on the interest paid to certain parties and deposit the same in the Income-tax Department within time. It may be noticed that the common case of the parties is that the State has not suffered any loss as the tax due has been paid on assessment.
(4) I may farther notice that even though the prosecute on relates to the commission of offence for the accounting years 1970-71 and 1973-74, the prosecutions were actually initiated on 29th March 1984, i.e. in the first case about a decade after the alleged commission of offence and in the second case almost 14 years from the date of alleged offence. The petitioners have challenged the prosecution and have prayed that the prosecution may be quashed in exercise of the powers of this court under section 482 Cr. P.C.
(5) Mr. D.R. Sethi has urged a number of contentions but before I deal with those contentions I must take up for consideration the objection of Mr. Jolly that these petitions are not maintainable in view of the fact that contents of the complaint makes out a case against the petitioners. The contention of Mr. Jolly is that if on the facts mentioned in the complaint the court has taken cognizance, then this court should not interfere in exercise of its powers under section 482 Cr.P.C. Mr. Jolly seems to suggest that the scope of section 482 in that view of the matter is limited and even if carrying on with the complaint results in grave injustice and abuse of the process of the court, the court should refrain from interfering. There is no need for me to refer to a catena of case-law on the subject. But the fact remains that if the prosecution degenerates into prosecution, this court cannot sit as a helpless spectator. It is the bounden duty of this court to interfere if there is a palpable and grave injustice and if it finds that the process of the court is being abused.
(6) Adverting to the first contention of Mr. D.R. Sethi, it may be stated that section 278-B of Income-tax Act came into existence for the first time on 1st October 1975. This section stipulates that every person who at the time of commission of offence was in charge and was responsible to the company for the conduct of its business, shall be liable to be proceeded against. Before the introduction of this section (Section 278-B) a firm alone could have been proceeded against. Mr. Jolly states that ‘firm’ includes its partners and they as well could be prosecuted. I must at once point out that Mr. Jolly is labouring under misconception. Under Partnership Act, partners of course will be liable for all the liabilities but we are in a different field. Section 278-B, which was brought into existence on 1st October 1975 for the first time, made every person connected with the affairs of the company liable for prosecution. The fact of the matter is that earlier to the introduction of section 278B the partners could not be prosecuted and the firm along could be prosecuted. The person referred to in section 276-B is in the context of the definition of ‘person’ as contained in section 2(31) of the Income-tax Act. Otherwise also, Mr. Sethi’s contention seems to be strong that in case the partners were to be proceeded against in the absence of section 278-B. there was no need for the legislature to introduce section 278-B as has been done in the year 1975. Mr. Sethi further contends that even here the legislature has in its wisdom not allowed the prosecution of the partners who may be ‘sleeping partners’ and may not be in any way connected with the running of the business of the firm. To me that appears to be a very reasonable approach. It is thus clear that the partners of firm who at the time of commission of offence were responsible for the conduct of the business of the firm could alone be prosecuted. Section 278-B of the Income-Tax Act has no retrospective effect. It will be operative from the date it came into force. In any case, this section was not in existence during the assessment year 1971-72 or 1974-75 much less during the accounting year 1970-71 or 1973-74 when the alleged offence is- said to be committed. The petitioners before me are the partners and not the firm. The firm, of course, cannot challenge the prosecution.
(7) The position thus is that this prosecution is being lodged against the petitioners without an authority of law. On the facts mentioned in the complaint the petitioners could not be prosecuted along with the firm for the offence alleged to have been committed in 1970-71 or 1973-74 as they were not liable to be prosecuted along with the firm under the law as it was in existence then. As already stated, the firm has thrown no challenge to the prosecution and, perhaps, rightly so. In the light of this legal position, could there be a better case for interference by this court ?
(8) To me it appears that this prosecution has been initiated due to a total failure of the concerned authority to apply its mind. If the petitioners could not be legally prosecuted as has been pointed above, then this court is justified in coming to the conclusion that the authority concerned has not at all applied its mind to the case before permitting prosecution of the petitioners.
(9) There is one more aspect which to me appears to be important. It is that the petitioner Parmeet Singh Sawney, as alleged by Mr. Sethi, was a little less than six years during the accounting year 1970-71 as he was born on 2nd November 1965 and in the accounting year 1973-74 he was about 9 years old. Obviously, he was a minor and could only share the profits of the firm. It cannot be said that this Parmeet Singh was in charge and responsible for the conduct of the business of the firm. Despite that the respondent have claimed in the complaint that Parmeet Singh Petitioner was in charge and responsible for the conduct of business of the firm at the time of commission of offence. This is absolutely a mis-statement of fact and that clearly goes to show that the respondents have mechanically reproduced in the complaint the wordings of section 278 B with a view to meet the requirement of law but without caring to find out whether this statement is true or not. That shows that the petitioner Parmeet Singh is being prosecuted on a false allegation and this is because of this mis-statement that at the time of commission of offence he was in charge and responsible for the conduct of business of the firm. Even otherwise, mere reproduction of the expression used in section 278-B in the complaint does not meet the requirement of law. The complaint is bound to provide indication though not evidence, as to in what manner a particular partner of the firm is supposed to be in charge and responsible for the conduct of business. Mere reproduction of the words used in the section are not sufficient. Income-tax Officers and their higher officers ase essentially the creatures of statute and they are expected to behave in a little more responsible manner than an ordinary lay-man. Creatures of statutes are vested with powers to prosecute citizens but they have responsibility to thoroughly apply their mind to the facts of a case before initiating prosecution. In the present case the application of mind by the concerned authorities has fallen a casualty in as much as even the six years old boy is, according to them, in charge and responsible for the conduct of business of the firm and on the basis of that mis-statement he too is being prosecuted. There cannot be a worst case than the one with which I am dealing and there is hardly any scope for suggesting under the circumstances of this case that this court should refrain from interfering. On these two grounds alone I am of the view that is a fit case where this court must interfere and quash the prosecution.
(10) Mr. Sethi has raised some more points. According to him the partners of the firm ought to have been given a show-cause notice before initiating prosecution, particularly when the respondents work up very late in the day i.e. almost after. 14 years to initiate prosecution. According to Mr. Sethi if that had been done, he would have shown to the respondents that Parmeet Singh is a minor. In the circumstances of this case Mr. Sethi further urged that delay in initiating prosecution also is fatal. Mr. Sethi has relied on some case-law also in this regard. In view of my findings on the first two contentions of Mr. Sethi I am not inclined to go into the last contention. To me it appears that there is no justification for these prosecution to survive. The petitions are accordingly allowed and the complaints filed against the petitioners are quashed.