A company cannot be prosecuted for an offence under Section 277 of the Income Tax Act, 1961, which requires mens rea and prescribes compulsory imprisonment.

( 1 ) THE petitioner, M/s. Kusum Products Ltd. (hereinafter "the company "), has its registered office at 9, Brabourne Road, Calcutta. It carries on business in the manufacture and sale of vanaspati and other products. On July 30, 1974, the company filed a return of income for the assessment year 1974-75, under the signature of one Kundanmal Lakhotia, who at the material time was the accountant and also the constituted attorney of the company.

( 2 ) ON March 27, 1979, the opposite party, Sri S. K. Sinha, ITO, Central Circle-X, Calcutta, filed a petition of complaint in the court of the Chief Metropolitan Magistrate, Calcutta, against the company and Kundanmal Lakhotia alleging the commission of an offence punishable under Section 277 of the I. T. Act, 1961 (hereinafter "the Act" ). It was alleged, inter alia, that in the aforesaid return the company had shown a total profit in its business amounting to Rs. 66,62,114 from which a total amount of deduction amounting to Rs. 12,89/107 was claimed. The deduction included a sum of Rs. 1,14,212 which was received by the company as interest on advance income-tax paid for the assessment year 1967-68. It was further alleged that in claiming the said amount as deduction it was stated in page 6 of the return that it had been assessed in an earlier year, although no such assessment had taken place, and the company also could not produce any evidence to show that the said amount had been assessed to tax in any previous year. In the draft assessment order deduction was disallowed in respect of Rs. 1,14,212 and it was added to the assessable income. The company also did not prefer any objection to the inclusion of the said amount as income for the relevant year. Thereafter, the final assessment order was passed, but the company neither preferred any appeal nor raised any dispute in respect of the said sum. Under the circumstances, it was alleged that the accused persons had made a false verification in the return of income for the assessment year 1974-75, knowing or believing it to be false or not believing it to be true.

( 3 ) THE learned Magistrate by an order dated March 27, 1979, took cognizance and directed issue of summons against the company and Kundanmal Lakhotia. Pursuant to the said summons the company appeared before the learned Magistrate through its representative, one Sri Manoranjan Sengupta, an accounts assistant under its employment. In this application, it is prayed that the proceeding pending against the company in the court of the learned Magistrate be quashed.

( 4 ) DR. Debiprosad Pal, appearing on behalf of the petitioner, has submitted that as the allegations in the complaint do not disclose a prima facie case against the company nor disclose the essential ingredients of the offence under Section 277 of the Act, the continuance of further proceedings against the company would tantamount to an abuse of the process of law. Dr. Pal further submitted that the petitioner being a company and a juristic person no prosecution can be initiated against it for an alleged offence under Section 277 of the Act as mens rea is an essential ingredient of the offence and the company cannot be charged for verification of a statement with the knowledge or belief that the said statement is false. Dr. Pal's further submission in this respect was that as imprisonment has been made compulsory for violation of Section 277 of the Act, it would clearly go to show that it was not the intention of the Legislature to punish a juristic person but an actual person who made the false statement in the verification. Dr. Pal also argued that in any event the company cannot be deemed to have committed any offence under Section 277 of the Act inasmuch as the return of income for the assessment year 1974-75 gives a true picture of the profit and loss of the company and even if the company had claimed the sum of Rs. 1,14,212 as a deduction, it would not necessarily go to show that there w