Law:

Section:

Section 278, read with section 277, of the Income-tax Act, 1961 - Offence and prosecution - Abatement of false return - Accused-firm filed return along with profit and loss statement - Income-tax Officer found that accused had adjusted certain amount which it could not explain properly - Penalty was imposed on firm, for not keeping accounts in proper manner - Department also took criminal proceedings against accused-firm and its partners - Magistrate after considering evidence, awarded sentence to firm and some of its partners - Whether in view of fact that Magistrate had exhaustively dealt with in detail offence committed by accused, sentence awarded by him could not be interfered with in instant appeal - Held, yes FACTS The accused 1 was a firm which filed return along with profit and loss statement. The Income-tax Officer found that there was some omission in the account and when the officer asked the accused, whether they had any evidence to show the debits and credits, rough cash books were filed by them. The Income-tax Officer, while scrutinising the accounts, also found that the accused had adjusted certain amount which they could not account properly. He, thus, filed a complaint against the accused under sections 120-B, 193 and 196, read with section 109, of the Indian Penal Code, 1860, and section 277 and section 278 of the 1961 Act, alleging that accused 2 to 9 conspired together to fabricate the day book, and, ledger of accused 1 with a view to suppress genuine evidence in the course of the income-tax proceedings, that accused 2 to 9 fabricated documents and used them as genuine documents and gave false statements before the Income-tax Officer knowing them to be false and, in this act, accused 9 abetted the offence while submitting the return. The Magistrate after scrutinising the evidence, both oral and documentary, found that the prosecution had not proved the case against accused 4 to 8 since they had no knowledge about the fabrications in the accounts. He also found that there was no evidence, that the accused conspired together to commit the offence in order to make them liable under section 120-B of the Indian penal code for conspiracy. Accused…

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