LexM.R. PRATAP versus V.M. MUTHUKRISHNAN, INCOME-TAX OFFICER, CENTRAL - III, MADRAS
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~ -- A M.R. PRATAP v. V.M. MUTHUKRISHNAN, INCOME-TAX OFFICER, CENTRAL CIRCLE-III, MADRAS APRIL 29, 1992 [KULDIP SINGH AND YOGESHW AR DAY AL, JJ .] Income-tax Act, 1961: Sections 2(7)(20)(31)(35), 139, 140(c) (As amended by Taxation Laws (Amendment) Act, 1975 and 276, 277, 278B and A B 278C). C Income-tax-Return-Prosecution for false verification-Private Com- pany--M anaging Director filing Return of Company-Return found false-Prosecution of Managing Director-Validity of-'Managing Director' held covered by the word 'person' under section 277 and held liable for prosecution-Effect of amendment of Section 140(c) and introduction of D Section 278B explained. The appellant was the Managing Director of a Private Limited Company. As a Principle Officer of the Company, he filed a return of the Income of the company for the assessment year 1965-66 which was verified E and signed by him. Subsequently it was discovered that the return was false. He was charged for making wilfully and knowingly false verification of the Company's return and was thus prosecuted under section 277 of the .Income-tax Act, 1961. He filed a petition challening the maintainability of the complaint F against him as the Managing Director which was dismissed. The High Court also upheld his prosecution and dismissed his Revision Petition and the petition filed under section 482 of the Code of Criminal procedure for quashing the complaint. In appeal to this Court it was contended on behalf of the appellant G that: (t) the word 'person' in section 277 refers only to an assessee and does not include the person who made the verification on behalf of the assessee; (ii) the substitution of the word 'Managing Director' for the term 'Prinicpal Officer' in section 140(c) of the Act by the Taxation Laws (Amendment) Act, 1975 shows that the expression 'Principal Officer' will H 949 950 SUPREME COURT REPORTS (1992) 2 S.C.R. A not relate to Managing Director. Dismissing the appeals, this Court, HELD : 1. The appellant cannot escape on the plea that the word 'person' used in Section 277 of the Income-tax Aet refers only to an B assessee but not the person who has made the verification on behalf of the said assessee. In view of Section 139 read with Section 140(c) of the Act the return has to be signed by the principal officer of the company. A statutory obligation is cast on the principal officer to sign the tax returns. The appellant admittedly was the Managing Director of the Company and C he was thus the principal officer thereof. [955 B, G-H] 2. The substitution of the words 'Managing Director' for the term 'Principal Officer' in section 140(c) by the Taxation Laws (Amendment) Act, 1975 will not in any way alter the position with regard to the operation of the provisions· of the Income-tax Act as against a managing director of D a company when he has signed the return of the company in such capacity. The effect of the amended section 140 (c) of the Act is that the company's return of income should be signed only by the managing director or by any director, when there is no managing director, and not by the Secretary or the treasurer, who are however included within the meaning of 'Principal E Officer' under section 2(35) of the Act. The effect of introduction of Section 2788 by the Taxation Laws (Amendment) Act of 1975, with effect from lst October, 1975 is to make every person connected with the affairs of the -y- company, apart from the managing director who has signed the return, liable to be proceeded against and punished. [955 H, 956 A-DJ F Kapurchand Shrimal v. Tax Recovery Officer, Hyderabad and Ors., G (1969) 72 ITR 623, relied on. ~ Inspecting Assistant Commissioner of Income·tox v. Chotabhai Javerl:Jha~ (1941] 8 ITR 604 (Mad.), approved. CRIMINAL APPELLATE JURISDICTION Criminal Appeal Nos. 383-384 of 1979. From the Judgment and Order dated 4.2.1977 of the Madras High Court in Criminal Misc. Petition No. 4813176 and Crjminal Revision Case ~· H No. 44 of 1974. M. R. PRATAP v. I. T. 0. (YOGESHWAR DAYAL, J.] 951 A.T.M. Sam.path for the Appellant. Dr. V. Gauri Shankar, S. Rajappa for Ms. A. Subhashini and Raju Rama Chandran for the Respondent. • The Judgment of the Court was delivered by YOGESHWAR DAYAL, J. These appeals are directed against the judgment of the learned Single Judge of the Madras High Court dated 4th February, 1977 and arise in the following cir<:Umstance
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