Law:

Section:

Section 279, read with sections 277 and 278 of the Income-tax Act, 1961, read with sections 120B, 193 and 196 of the Indian Penal Code, 1860 and, section 195 of the Code of Criminal Procedure, 1973 - Offence and prosecution - Prosecution to be at instance of Chief Commissioner/Commissioner - ITO, other than ITO who had enquired into returns of assessee-firm, filed complaint against partners of assessee-firm for offences punishable under sections 120B, 193 and 196 of IPC and section 277 of 1961 Act, at instance of Commissioner - He also filed complaint against accountant of assessee-firm under section 278 of 1961 Act - Whether having regard to provisions of section 195 of 1973 Code, a complaint for offences punishable under sections 120B, 193 and 196 of IPC, can be filed only by ITO who has enquired into returns or by Commissioner himself - Held, yes - Whether therefore, in instant case, to extent of offences punishable under sections 120B, 193 and 196 of IPC, proceedings were liable to be quashed - Held, yes - Whether, since, in view of provisions of section 279, for offences allegedly committed under sections 277 and 278 of 1961 Act, complaint at instance of Commissioner by third person is permissible, thus, to that extent proceedings would continue against partners as well as accountant of assessee-firm - Held, yes FACTS The petitioners were partners in a firm run in the name and style of M/s. 'S' and A-12 was the accountant of that firm. For the relevant assessment year the ITO having noted that there were five items of expenditure in the names of third parties which were not mentioned in the books for that particular year, but these five items of expenditure were found in the entries of the next year's account, called upon the assessee-firm to file the revised returns which was done. Thereupon, the Assistant Commissioner levied penalty which was reduced by the Tribunal to the minimum. Thereafter at the instance of the Commissioner another ITO filed a complaint against the petitioners for offences punishable under sections 193, 196 and 120B of the Indian Penal Code and section 277 of the 1961 Act. He also filed a complaint against the accountant of the…

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