A criminal complaint based on evidence collected during assessment proceedings cannot be quashed merely because the re-assessment order on which it was based has become invalid. A company can be held guilty of offences involving mens rea, as the state of mind of the persons controlling the company is imputed to the company.

( 1 ) ONLY a short legal question was involved in this petition and I have heard arguments to finally dispose of the petition.

( 2 ) THIS petition has been brought under Section 482 of the Code of Criminal Procedure (for short cr. P C j praying that the criminal proceedings pending against the petitioners before the court of Smt. Manju Goel, Additional Chief Metropolitan Magistrate, Delhi, be quashed.

( 3 ) THE facts leading to the present petition, in brief, are that petitioner No. I, which is a duly registered society (stated to be a obaritable society) had filed income tax return of the assessment year 1981-82 showing a loss of Rs. 2. 9,73,820. 00. The Inspecting Assistant Commissioner vide order dated March 30, 1984, however, found the return to be wrong and she determined the income of the Society to the tune of Rs. 90,00,000. 00. The Society preferred TO an appeal before the Commissioner of Income-Tax who vide order dated February 27, 1985, bad set aside the assessment order and remanded the case for de-novo assessment. The petitioner- Society filed an appeal before the Income-Tax Appellate Tribunal and before the Tribunal could decide the appeal, the Inspecting Assistant Commissioner on the basis of the remand order made an assessment order on March 24, 1987, determining the income of the petitioner-Society to the tune of Ks. 1,34,65,810. 00. A criminal complaint was instituted in March 1987 after obtaining the necessary authorisation under Section 279 (1) of the Income- Tax Act. I would refer to the contents of the complaint a bit later. In order to complete the happenings, I may mention that the Appellate Tribunal vide its order dated June 18, 1987, held that the Commissioner of Income-Tax was not right in remanding the case and it directed the Commissioner of Income-Tax to decide the appeal against the first assessment order afresh. A finding was given that the Commissioner of Income-Tax had not cared to examine the reasons on the basis of which the appeal was filed against the assessment order and had raised certain suspicions regarding the sources of income of the petitioner-Society which were not the basis of original assessment order and no show cause having been given to the petitioner Society as to why the assessment be not enhanced and thus, it had acted with an error in jurisdiction in not deciding the appeal on merits and in remanding the case back to the Inspecting Assistant Commissioner for reassessment. It is now evident that the original assessment order is still intact and appeal filed against that order is yet to be decided by the Commissioner of Income-Tax.

( 4 ) THE short question which has been raised by the petitioners in seeking quashment of the criminal proceedings is that as soon as the re- assessment order had become redundant due to appellate order being set aside by the Tribunal which has resulted in reviving of the appeal against the first assessment order, the criminal complaint which has been filed on the basis of the re-assessement order is no longer tenable as that re-assessment order stands automatically set aside. There is a fallacy in this contention of the petitioners because the criminal complaint is not based on assessment orders.

( 5 ) IT has been mentioned in the criminal complaint that in the incometax return filed by the petitioner-Society showing a deficit of huge amount, the petitioner-Society had claimed Rs. 75,00,000. 00 as hotel expenses Rs. 10,00,000. 00 as mess expenses and Rs. 5,00,ouo. 00 as payments made for tents. During the course of the assessment proceedings, documents filed by the petitioners were examined and evidence was collected which revealed that the alleged payments of Rs. 5,18,845/15p and another amount of Rs. 15. 210/35p were not made to Ashoka Hotel as claimed in expenditure account and the said amounts had been included just to inflate the expenses. Similarly, certain amounts claimed as expenditure as payments made to Lodi Hotel were also f