ORDER OF ACQUITTAL–Interference –Long lapse of time since occurrence and order of acquittal–No interference called for.
HELD :
The delay is of 17 years from the date of occurrence and
more than 9 years from the date of judgment of acquittal.
Termination of criminal proceedings ordered by the trial
court was, therefore, the safest order in terms of the Supreme
Court guidelines and there is no reason to disturb it.-S. Guin &
Ors. v. Grindlays Bank Ltd. AIR 1986 SC 289 relied on.
Prosecution–OFFENCE UNDER S. 277–Maintainability of prosecution–Mens rea to be established therefor .
HELD :
Sec. 277 says that if a person makes a statement which is
false, he may be punished with the penalties as prescribed in the
said section. However, the section contains some crucial words in
regard to the mens rea of the assessee, these words being “and
which he either knows or believes to be false, or does not
believe to be true”, the intention of the legislature in
incorporating these words is quite obvious that a prosecution
would not follow in every case where a wrong statement is made
and it will have to be judged as to whether the assessee
harboured the required mens rea or not.” That mens rea is an
essential ingredient of an offence under s. 277 of the Act is
clear from the section itself.Parekash Chand v. ITO (1982) 134
ITR 8 (P&H) followed.-Not to current assessment years as mens rea
is not a pre-requisite for launching prosecutions w.e.f.
10-9-1986.
Income Tax Act 1961 s.277
JUDGMENT
S. D. BAJAJ, J. :
Relying upon the difference in the stock of till oil and mustered oil pledged/hypothecated with the banker and shown in the books of the assessee, ITO held in the assessment order made On 25th May, 1977 that the income had accrued to the assessee from undisclosed sources. The appeal filed by the assessee was dismissed by the CIT on 15th February, 1978. Tribunal, however, deleted the additions made by ITO and maintained by the Commissioner.
2. For the same lapse, Criminal complaint No. 214/1 was filed before the learned trail Court on 31st March,1979. Learned trail Court, however, discharged the accused vide its impugned judgment dt. 23rd December, 1982. Feeling aggrieved therefrom, ITO, Company Ward, Rohtak, has filed Criminal Appeal No. 423/DBA of 1983 in this Court.
3. We have heard Shri A. K. Mittal, Advocate with Shri G. S. Sandhawalia, Advocate for the appellant, nemo for the respondents in spite of due service and have carefully perused the relevant record.
4. Referring to the observations made in P. Jayappan vs. S. K. Perumal, first ITO (1984) 149 ITR 696 (SC) and Sant Parkash & Ors. vs. CIT & Ors. (1991) 188 ITR 732 (P&H) learned counsel for the appellant urged that the learned trial Court ought to have judged the case independently on the evidence adduced before it. The argument is wholly without merit and the authorities cited do not support it. The matter arising for consideration before that the Honble High Court in both the cases cited on behalf of the appellant pertains to quashing of the complaint filed earlier to the decision of the IT Department and the orders summoning the respondents arrayed as accused in the complaint had been passed by the learned trial Court before it. It was under these circumstances that the Honble High Court held that giving relief by the IT Department thereafter did not render the complaint as an abuse of the process of the Criminal Court. Otherwise Honble High Court in both the cases aforesaid observed : “In a criminal case, all the ingredients of the offence in question have to be established in order to secure the conviction of the accused. The criminal Court no doubt has to give due regard to the result of any proceedings under the Act having a bearing on the question on the question in issue and, in an appropriate case, it may drop the proceedings in the light of an order passed under the Act”.
Relevant ss. 277 and 278 of the IT Act 1961 read :
“277. False Statement in verification, etc. – If a person make a statement in any verification under this Act or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable, –
(i) in a case where the amount of tax, which would have been evaded if the statement or account had been accepted as true, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extent to seven years and with fine;
(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine.”
“278. Abatment of false return, etc. – If a person abets or induces in any manner another person to make and deliver an account or a statement or declaration relating to any income chargeable to tax which is false and which he either knows to be false or does not believe to be true or to commit an offence under sub-s. (1) of s. 276C, he shall be punishable, –
(i) in a case where the amount of tax, penalty or interest which would have been evaded, if the declaration, account or statement had been accepted as true, or which is wilfully attempted to be evaded, exceeded one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less that six months but which may extend to seven years and with fine;
(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine.”
It is argued that the signing and verification of the return containing false figures by itself should be enough to raise a presumption of dishonesty. For appreciating this argument, reference will have to be made to s. 277 of the Act which says that if a person makes a statement which is false, he may be punished with the penalties as prescribed in the said section. However, the section contains some crucial words in regard to the mens rea of the assessee, these words being “and which he either knows or believes to be false, or does not believe to be true”, the intention of the legislature in incorporating these words is quite obvious that a prosecution would not follow in every case where a wrong statement is made and it will have to be judged as to whether the assessee harboured the required mens rea or not.”
That means rea is an essential ingredient of an offence under s. 277 of the Act is clear from the section itself.
Even otherwise, it has been held by this Court in Parkash Chand vs. ITO (1982) 134 ITR 8 (P&H), “Prosecution was launched against the assessee for offences under s. 277 of the IT Act, 1961, and ss. 193 and 471 of the IPC on the basis of false returns, false accounts and inflated items of purchases, Pending the criminal proceedings, in penalty proceedings for concealment of income, the Tribunal examined the material and arrived at the findings that none of income-tax authorities established clearly that particular items of purchases were inflated and as such there was no proof that the assessee had concealed income or furnished inaccurate particulars and concealed the penalty. Thereupon, the assessee filed a writ petition to quash the criminal proceedings.
Held, that, “in view of the finding of the Tribunal that there was no concealment and no inaccurate account were filed by the petitioner, the criminal proceedings against the assessee could not continue and were liable to be quashed”.
5. Another aspect of the matter is that the occurrence is of the year 1974-75. Acquittal judgment was rendered by the learned trial Court on 23rd December, 1982. Criminal Appeal No. 423-DBA of 1983 against it was filed on 9th May, 1983. Leave to appeal was granted therein on 23rd May, 1983. In S. Guin & Ors. vs. Grindlays Bank Ltd. AIR 1986 SC 286 their Lordships of the Supreme Court observed that inordinate delay of nearly 6 years that had ensued after the judgment of acquittal would justify the termination of the criminal proceedings. In the present case the delay is of 17 years from the date of occurrence and more than 9 years from the date of judgment of acquittal. Termination of criminal proceedings ordered by the learned trial Court was, therefore, the safest order in terms of the Supreme Court guidelines aforesaid and we see no reason to disturb it in the present appeal. Dismissed.