M.V. JAVALI vs MAHAJAN BOREWELL & CO

The Supreme Court addressed the issue of whether a partnership firm can be prosecuted under Section 276B and Section 278B of the Income Tax Act, 1961, for failing to pay tax deducted at source. The Court upheld the High Court's decision that the prosecution against the firm was not maintainable as it could not impose a substantive sentence on a juristic person. The Court clarified that while individuals responsible for the firm's conduct could be prosecuted, the firm itself could not face imprisonment under the Act, leading to the dismissal of the appeal.