Law:

Section:

Section 278B, read with section 277 of the Income-tax Act, 1961 - Offences and prosecution - Offences by companies - Assessment years 1980-81 and 1981-82 - Whether a company, which includes a firm, is liable to prosecution for offences committed under Act - Held, yes - Whether said company can be sentenced to fine only, though section 277 contemplates imposition of minimum sentence of imprisonment and fine - Held, yes FACTS A firm and its two partners were prosecuted under section 277 for falsification of accounts for the assessment years in question. The trial court, on a consideration of the entire material on record, convicted the partners alone and sentenced them while acquitting the firm on the ground that the firm could not be sentenced to imprisonment. On appeal : HELD Section 278B has specifically rendered the company which includes a firm liable to prosecution for offences committed under the Act. In view of the abundant case law and the specific provision, viz., section 278B, it was to be held in the instant case that a company, which includes a firm, is liable for prosecution for the offences committed under the Act. As regards of awarding of sentence, while interpreting the provisions in the statutes, such as section 277 in the instant case, the paramount object is to discover what the Legislature intended. The Supreme Court in Union of India v. Filip Tiago De Gama, AIR 1990 SC 981, observed that the legislators do not always deal with specific controversies which the courts decide and that if a given case is well within the general purpose of the Legislature but not within the literal meaning of the statute, the courts must strike a balance. Keeping this principle in mind and advancing the purpose behind incorporating section 278B and rendering section 277, by way of amendments from time to time, more and more severe and following the decision of the Full Bench of the Delhi High Court in Delhi Municipality v. J.B. Bottling Co. [1975] Crl. LJ 1148, it was to be held that a company could be sentenced to fine only though the section contemplates imposition of minimum sentence of imprisonment and fine. Note : The decision is partly in favour of the…

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