J.B Garg, J.:— M/s Mehar Chand Om Parkash a partnership firm at Barnala through its partner Om Parkash and other partners such as Vidya Wati wife of Mehar Chand, Mrs. Shakuntla Devi wife of Harish Kumar and Surinder Kumar son of Om Parkash, have moved his petition under Section 482 of the Code of Criminal Procedure for quashing the complaint instituted by the Income Tax Officer, Ward 11(7) for offence under Section 276-E of Income Tax Act, 1961.
2. It shall be useful to refer to the complaint (Annexure P-1) wherein it has been, averred that Income Tax Return for the year 1986-1987 was filed by partnership firm in question on 24.7.1986 declaring income as Rs. 68,376/-, that the return contained sum of Rs. 30,000/- in the books of the aforesaid firm on 26.3.1980 in the name of one late Sarwan Singh as if it was deposited by him on account of the sale of agricultural land; that during the assessment year 1986-1987 it came to the notice that the assessee paid a sum of Rs. 15,000/- each to a son or grandson of late Shri Sarwan Singh and it was in violation of the provision of Section 269-1 of the Income Tax Act, 1961; that a notice was also served on the assessee to explain the entry dated 18.1.1988 and its reply was that the deposit made by Sarwan Singh of Rs. 30,000/- was not covered under the definition of term deposit under Section 269-1 inasmuch as it was repayable on notice or repayable after a particular period. It has further been alleged in the complaint that since no Hundi or receipt was issued by the assessee to the aforesaid depositor the aforesaid explanation was not satisfactory and it was for this reason that the aforesaid complaint was instituted which is pending in the Court of Chief Judicial Magistrate, Sangrur.
3. The main plea taken in para No. 6 of the present petition is that Section 276(E) has been omitted with effect from 1.4.89 by the Act of Parliament passed in the year 1987 and the complaint instituted on 18.3.1990 after the enforcement of the amendment, is liable to be quashed; that the Chief Judicial Magistrate did not apply his mind before passing the impugned order; that Vidyawati and Shakuntla Devi, the two women, never participated in the conduct of the business; that the complaint was required to specifically allege and show as to how “all the partners of the firm” were liable for prosecution; that after the omission of Section 276-E, the intention of the Legislature became clear that it never wanted to initiate criminal proceedings of penal nature after 1.4.1989; that the alleged omission occurred in the year 1986 when the amount in question was paid in case instead of paying through a cheque or bank draft.
4. No reply was filed by the respondent though opportunity for this purpose was specifically given as is evident from the proceedings held on 23.1.1991
5. The learned counsel for the petitioners has argued that though Section 276-(E) of the Income Tax Act, 1961 was deleted with effect from 1.4.1989 yet it required retrospective application because it also mollifies the rigour of a criminal law and in this regard Rattan Lal Alias Ram Rattan v. State Of Punjab, AIR 1965 SC 444, has been referred to wherein a case under Section 354 of the Indian Penal Code the accused a boy aged 16 was given the benefit of Probation of Offenders Act with effect from 1.9.1962 though the occurrence related to 31.5.62 The circumstances are distinguishable inasmuch as here the quantum of punishment is not under consideration. It is only to be seen whether the allegations made in the complaint did constitute the violation of Section 269(I) of the Income Tax Act, 1961 or not when the assessing authority examined the return for the year 1986-1987.
6. It has next been argued that the complainant has not taken into consideration the fact that Vidya Wati petitioner No. 3, Shakuntla Devi petitioner No. 4 and Surinder Kumar son of Om Parkash, had nothing to do directly with the filing of the return which was signed and verified by Om Parkash of M/s. Mehar Chand Om Parkash, Barnala. The fact that Om Parkash partner of the firm verified the return also finds mention in para No. 2 of the complaint. The learned counsel for the respondent has pointed out that these three petitioners were also members of the partnership firm and were liable as detailed in the complaint. However, on the contrary the learned counsel for the petitioners has referred to Sat Pal v. State of Punjab, 1993 (2) Recent C.R 21, where in similar circumstances it was observed that in case of an alleged erroneous return a partner against whom there was no specific allegation, could not be held liable. The conclusion is that the present petition is partly accepted and the complaint (Annexure P-1) and the summoning order (Annexure P-2) are hereby quashed qua petitioners No. 3, 4 and 5 only. As regards petitioners No. 1 and 2, the present petition is dismissed.
7. This also disposes of Crl. Misc. No. 4217-M of 1992 where also the complaint qua Promila Devi a partner who has not verified the return is hereby quashed. As regards the co-accused Satpal, the trial Court shall proceed, provided there is sufficient evidence, in accordance with law.