Law:

Section:

Section 278, read with sections 277 and 276C, of the Income-tax Act, 1961 - Offences and prosecutions - Abetment of false statement - During assessment year 1967-68 SL and SK were partners of assessee-firm - S became partner in 1969 - Original return for aforesaid assessment year was filed by SL declaring an income of Rs. 49,720 which was assessed at Rs. 89,862 - A search was conducted in premises of assessee and a revised return was filed by S declaring an income of Rs. 1,49,860 which was assessed at Rs. 1,83,770 - Whether assessee and SL had committed an offence under section 277, read with section 276C, and were therefore punishable - Held, yes - Whether SK and S had committed any offence under section 277, read with section 276C, and were, therefore, punishable - Held, no Facts During the assessment year 1967-68, SL and SK were two partners of the assessee-firm S, the third partner joined the assessee in 1969. For the assessment year. 1967-68, the return was filed by SL on behalf of the assessee declaring an income of Rs. 49,720. The ITO assessed the income at Rs. 2,03,030 which was reduced to Rs. 89,862 on appeal. Subsequently, search was conducted in the premises of the assessee and thereafter the assessment proceedings for the aforesaid year were reopened and a revised return was filed by S on 7-6-1977 declaring an income of Rs. 1,49,860. However, the income was assessed at Rs. 1,83,770. A penalty was imposed under section 271(1)(c) for concealment of income. On appeal, the Commissioner (Appeals), however, cancelled the penalty so imposed. Thereafter the ITO filed a complaint under sections 276C and 277, read with section 278, against the petitioners, i.e., the assessee and its three partners, for evading the tax and filing false return. On petition under section 482 of the Code of Criminal Procedure for quashing the said proceedings. Held In the instant case, the criminal complaint related to the original return filed on behalf of the firm as well as the revised return filed after the search. The original return had been filed by SL on behalf of the assessee and as such from the allegations made in the complaint offence under sections 276C and 277 was…

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