Law:

Section:

Section 278B of the Income-tax Act, 1961 - Offences and prosecution - Offences by companies - Assessment year 1988-89 - Deputy Commissioner filed complaint against firm (Accused No.1) under sections 276C, 276D, read with section 278B, alleging that firm failed to file return for assessment year in question required under section 139(1) and treating petitioners (partners of firm) as in-charge of and responsible to firm, arraigned them as accused Nos. 2 to 7 - It was also alleged that at time of filing complaint, firm was no longer a partnership firm but became sole proprietorship concern of accused No. 8 who was incharge of affairs of firm since 1988 and, therefore, he was also made an accused - Petitioners case was that they were not persons responsible for affairs of firm and they had ceased to be partners of firm with effect from 7-8-1987 when partnership firm was converted into a proprietorship concern of accused No. 8 - Whether since except stating that petitioners were in-charge of and responsible to firm for conduct of its business, which amounted to reproduction of language of section 278B nothing was attributed to petitioners and it was not indicated as to how and in what manner petitioners were incharge of affairs of firm and further in complaint itself it was specifically averred that it was accused No. 8 who was controlling affairs of firm and was corresponding with income-tax authorities, petitioners were to be discharged and complaint qua them was to be quashed - Held, yes FACTS The Deputy Commissioner filed complaint against firm (Accused No. 1) under sections 276C, 276D, read with section 278B, alleging that firm failed to file its return for the assessment year 1988-89, as required under section 139(1) and treating petitioners (partners of firm) as in-charge of and responsible to firm, arraigned them as accused Nos. 2 to 7 in said complaint. Accordingly, the summons were issued against the petitioners. It was also alleged that at the time of filing of complaint the firm was no longer a partnership firm but became sole proprietorship concern of accused No. 8 and, therefore, he was also made an accused as he was associated with the firm since…

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