JUDGMENT
Surinder Singh, J.
1. A complaint under Section 277 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”), was filed by the appellant, Income-tax Officer, Jullundur, against Sohan Singh Dhirnan, respondent in the court of the Judicial Magistrate, First Class, Jullundur, on March 25, 1970, the main allegation being that the respondent who was an assessee of Jullundur City was having a business office at Solan in the year 1964-65, and in his return of income for the accounting period April 1, 1964, to March 31, 1965, filed before the Income-tax Officer, D. Ward, Jullundur, on March 29, 1966, he had indicated a net loss of Rs. 2,9996.70, in respect of his Solan branch. The respondent had also verified the aforesaid return as required under the law. The Income-tax Officer, Jullundur, passed the
assessment order in the case of the respondent on October 28, 1967. The respondent, however, preferred an appeal before the Appellate Assistant Commissioner of Income-tax, Jullundur, and at the time of hearing of the appeal, he produced some books of account including those pertaining to the Solan branch. When these books were scanned by the Appellate Assistant Commissioner, he found that a net profit of Rs. 3,113.83 was shown therein instead of loss. The Appellate Assistant Commissioner called upon the respondent to show cause as to why his assessed income, as determined by the Income-tax Officer, be not enhanced in view of the above circumstances. The respondent readily admitted his mistake and stated that he had no objection to the aforesaid enhancement. The assessed income was accordingly enhanced.
2. The matter, however, did not end there. The Appellate Assistant Commissioner, in exercise of the powers vested in him under Section 274/271 of the Act, called upon the respondent to show cause as to why a penalty be not imposed upon him for the concealment of his income relating to the Solan branch. The respondent submitted his reply to the show-cause notice, on December 9, 1968, in which he stated that he had no mala fide intention in filing wrong figures regarding his income and the mistake was unintentional. He also pleaded that if the wrong figures had been intentionally given or these were within his knowledge, he would not have pressed the matter in appeal. The respondent further explained that the return was filed according to the papers received by him from his clerk of the Solan branch and the discrepancy in this behalf was noticed by the respondent and the authorities only on the table of the Appellate Assistant Commissioner during the hearing of the appeal. Thus, no inference of dishonesty could be drawn from these circumstances. The respondent, therefore, prayed that no penalty be imposed upon him in this matter. The Appellate Assistant Commissioner, however, passed an order on December 18, 1968, that the appellant had concealed the particulars of his income and had furnished inaccurate particulars thereof. He, therefore, imposed a penalty of Rs. 150 upon the respondent in this matter.
3. Misfortunes always come in by the door that has been left open for them. Even after the imposition of the penalty aforementioned, the respondent was visited with the present complaint under Section 277 of the Act for his prosecution in connection with the same matter. The burden of the charge against the respondent, as can be gathered from the circumstances put to him in his examination under Section 342, Code of Criminal Procedure, is that he filed his return of income, pertaining to the Solan branch, showing a net loss of Rs. 2,996.37 which return he had verified to be correct and complete and truly stated. In reply to this allegation, the respondent stated that he did file the return but the same had been filled
in by his clerk and he had merely signed it. In reply to another question put to him that during the course of the appeal before the Appellate Assistant Commissioner he had produced his books of account relating to the Solan branch which indicated a net profit of Rs. 3,113.83, the respondent admitted that he did produce these books of account, though he did not remember about the exact figures. He also contended that he had produced the same books before the Appellate Assistant Commissioner as before the Income-tax Officer. In regard to the discrepancy in the figures, he stated that the figures of Solan branch which he had mentioned in the return had been supplied to him by his clerk working at Solan branch. The respondent also produced Sohan Lal Sharma (D.W. 1) in defence who corroborated the above assertions of the respondent. After giving due consideration to the’entire material on the record, the trial court acquitted the respondent of the charge levelled against him. The present appeal is now directed against the said order of acquittal.
4. Mr. D.N. Awasthy, learned counsel appearing on behalf of the appellant, with his usual tenacity has taken us through the relevant material on the record including the depositions of the witnesses. The contention of Mr. Awasthy is that the trial court was not justified in coming to a conclusion that there was no dishonest intention on the part of the respondent in mentioning wrong figures in his return. 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 Section 277 of the Act which says that if a person makes a statement in any verification under the Act, or delivers an account or 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 wither the assessee harboured the required mens rea or not. In the present case, the respondent gave a satisfactory explanation of the discrepancy not only in his own statement under Section 342, Code of Criminal Procedure (old), but also by the production of an employee of his factory, who explained in detail the circumstances leading to the mention of wrong figures in the return. The intention of the respondent can be gathered from two significant circumstances, which were pleaded by him in his reply to the notice for imposition of penalty. Firstly, if the respondent had knowingly taken an advantage by showing a loss, he would not have filed the appeal. Secondly, if the respondent was personally aware
of the figures pertaining to the Solan branch as contained in the account books produced before the Appellate Assistant Commissioner, he would have never exposed himself by producing the very account books. Considered from whichever angle, it appears to be merely a case of negligence on the part of the respondent to have accepted the figures supplied to him by his clerical staff at Solan, which figures were incorporated in the return and which the respondent perhaps signed and verified in routine. After a penalty had been imposed upon the respondent in this matter, his further prosecution was not called for. This apart, an appeal against acquittal stands on a different footing and this court is not called upon to reassess the credibility of the evidence, when the view taken by the trial court is not shown to be so patently erroneous as to cause miscarriage of justice. The appeal is, therefore, dismissed.
Bhopinder Singh Dhillon, J.
5. I agree.