JUDGMENT Amar Saran, J.
1. Heard learned Counsel for the applicants Sri Raghuraj Kishore and Sri Ashok Kumar, learned Counsel for Income Tax Department.
2. The allegations in this case were that the applicants are said to have taken three loans in cash and not by cheques or bank drafts in the assessment year 1986-98 totaling Rs. 21,000/-. In this manner they are said to have violated the provisions of Section 269SS of the Income Tax Act, 1961 punishable under Section 276DE of the Income Tax Act, 1961 read with Section 278B. Now this complaint was dated 24/25.5.1989. I find that Section 276DD has been omitted with effect from 14.1989. There is a decision of Hon'ble Supreme Court in the case of General Finance Co. and Anr. v. Assistant Commissioner of Income Tax, Punjab , wherein it has been held that there can be no prosecution for a breach of Section 269S, if the prosecution has been launched after deletion of Section 276DD, even if, the loans amounts were taken by cash, prior to that date i.e. 1.4.1989. This decision has been followed by a learned Single Judge of this Court in Criminal Misc. Application No. 7508 of 1990, Sudihir Chandra Sunil Kumar and Ors. v. State of UP and Ors. Learned Counsel for the Income fax Department fairly concedes that this is the correct legal position. So far as the other charge relating to Section 278B is concerned, that imposes liability on parties, who are in charge of a company. However, that liability would only arise, provided that an offence has been committed in the first place If there has been no commission of any offence, then there can be no question of making a complaint against the Managing Director.
3. In this view of the matter, the application succeeds and criminal proceedings in case No. 265 of 1989 (Union of India v. Neera Chemicals Private Limited and Anr.) pending in the Court of C.J.M. Kanpur and others are quashed.