JUDGMENT
David Annoussamy, J.
1. The revision petition is by the complainant, namely, the Income-tax Officer, City Circle I(1), Tiruchirapalli, against an order of discharge passed by the Chief Judicial Magistrate, Tiruchirapalli, on November 19, 1984.
2. A complaint under sections 120B, 193 and 196, Indian Penal Code, and sections 276C(1) and 277 of the Income-tax Act, 1961, was filed by the Income-tax Officer, City Circle I(1), Tiruchirapalli, on January 19, 1984, under the following circumstances against the six respondents, the first respondent being a partnership firm and the other respondents being the partners thereof. The firm came into existence on April, 1, 1973, and has been carrying on the business of manufacture and sale of indigenous medicinal preparations. After the income-tax assessments of the first accused firm for the assessment years 1975-76, and 1976-77 were completed on September 29, 1976, and February 3, 1977, respectively, it came to light that the first accused firm had a current account and a fixed deposit account for Rs. 90,000 with the State Bank of Mysore, Abhiramapuram Branch, Madras. Neither the fixed deposit account of Rs. 90,000 nor the current account balance of Rs. 352.52 was disclosed by the first accused firm in the balance sheet filed by the accused along with its return of income for the year ended March 31, 1975, nor was the interest received from the abovesaid deposits disclosed in the return of income for the year ended March 31, 1976. The original current account opening form obtained from the bank clearly shows that the application was for opening an account in the name of the first accused firm and that it was signed by all the five partners, namely, respondents No. 2 to 6 and they were to operate the account jointly and severally. The current account and the fixed deposits and the interest received in respect of the fixed deposits have been completely kept out of the books of account of the first accused firm maintained for income-tax purposes. When respondent No. 2 was examined on oath by the Income-tax Officer on February 15, 1983, about the aforesaid current account and fixed deposit account, he deposed that the money did not belong to the first accused firm. When he was questioned further, he made admissions to the contrary regarding the current and fixed deposit accounts and the fact of those accounts having not been recorded in the books of the firm. Accordingly, a complaint was filed against all the respondents under the sections aforementioned.
3. The Magistrate examined the complainant as well as the other members of the Department. Thereafter, the respondents raised a plea that, in the circumstances of the case, they deserved to be discharged. Their plea was accepted by the Magistrate and it is that decision arrived at by the Magistrate which is challenged in the present revision. Three main points are raised before me by counsel for the respondents and they will be considered seriatim. Those points are :
1. There is no valid complaint filed before the Magistrate.
2. From the records, it is shown that only the second accused has submitted the return; and all statements alleged to be false have been made solely by him and, therefore, no charge can lie against the other respondents.
3. When the reassessment order made by the Income-tax Officer on the basis that the return was false has itself been set aside by the Commissioner of Income-tax (Appeals), the complaint is lacking legal basis.
4. Point No. 1 : The Magistrate has discharged the accused placing full reliance on the decision of this court in Associated Industries v. First ITO (1982) 134 ITR 565 (Mad), in which it was held that as per section 195(3), Criminal Procedure Code, the Income-tax Officer was not a court since he was not declared to be so in the Income-tax Act and that, therefore a complaint could not be filed for offences under sections 193 to 196, Indian Penal Code, in the teeth of the provisions of section 195, Criminal Procedure Code. It is represented by learned counsel appearing on behalf of the Income-tax Department that in a recent judgment of this court in Union of India v. Gopal Engineering Works (1988) 173 ITR 206 (Mad), this court has observed that, inasmuch as under section 136 of the Income-tax Act, a proceeding before the income-tax authority was a judicial proceeding within the meaning of sections 193 and 228, Indian Penal Code, for the purpose of section 195, Criminal Procedure Code, also, the Income-tax Officer should be deemed to be a court.
5. I shall now consider the provisions of section 195, Criminal Procedure Code. They have the purpose of making an exception to the general law. The essence of the provision is that no court shall take cognizance of any offence alleged to have been committed in, or in relation to, any proceeding in any court except on the complaint in writing of that court or of some other court to which that court is subordinate. The purpose of the provision is that when any offence mentioned in this section has been committed in a court, a third party is not entitled to bring the matter before any court by way of a complaint. The right and privilege of bringing those offences for trial belong exclusively to the court before which the offences have been committed. It is clearly to be borne in mind that the definition of the term “court” in section 195(3), Criminal Procedure Code, is to be applied to all the provisions of the section and not only to the portion of the section which reads as “except from the complaint in writing from the court”. In the bar embodied in the opening portion, i.e., that “no court shall take cognizance”, the term “court” has also to be understood as defined in section 195(3).
6. Consequently, either an authority is a court, when both the privilege and the restriction apply or, if it is not, then section 195 does not come into play at all. If the Income-tax Officer is not a court within the meaning of section 195(3), none of the provisions of section 195 would apply and there will be no restriction whatsoever as contemplated under section 195. The Income-tax Officer can, therefore, freely bring offences under sections 193, 196, Indian Penal Code, for trial without section 195 coming into operation at all. He would have only to show that the offences are such as are to be taken on file and are punishable under law. Therefore, the ratio in Associated Industries v. First ITO [1982] 134 ITR 565 (Mad), to the effect that if the Income-tax Act has not declared any officer to be a court, he will not be a court under section 195(3), will not stand in the way of the Income-tax Officer filling a complaint, not as a court, but as an ordinary citizen.
7. The second part of the argument of learned counsel for the revision petitioner (sic) is that as per the Finance Act, 1985 the Income-tax officer, among others. has been declared to be a court. Section 136 of the Income-tax Act, 1961, has been amended and every income-tax authority has been declared to be a civil court for the purpose of section 195 of the Criminal Procedure Code, 1973, with retrospective effect from April 1, 1974. No doubt, if the provision is only procedural in nature, it could have retrospective effect. If on the contrary, the provision is to brand as an offence an act which was not an offence before, or to permit prosecution which was not permitted before, or to change the rule of evidence to the detriment of the accused, such provision, having the effect of aggravating the situation of the accused, could not have retrospective effect. If, as per the existing laws, the Income-tax Officer did not have the power to file a complaint, such power cannot be given after eleven years. but, as has been seen earlier, the power of the Income-tax Officer has been always present to file a complaint for offences under section 193 and 196, Indian Penal code, but he could not act as a court in filling the complaint. The fact of the Income-tax Officer acting as a court under section 195, Criminal Procedure Code, does not, in any manner, aggravate the situation of the accused. Therefore, the amendment of section 136 of the Income-tax Act, 1961, by the Finance Act, 1985, with retrospective effect is proper and valid. On the facts in this case, the reading of the complaint would show that the Income-tax Officer did not act as a court, nor did he purport to act as a court. The complainant’s name reads as follows : “Thiru S. Vaidyanathan, Income-tax Officer City Circle I(1), Tiruchirapalli”. The concluding sentence reads as follows : “The complainant, therefore, prays that this honourable court may graciously be pleased to take this complaint on file, issue processes to the accused and deal with them according to law”. Therefore, even without the amendment, the complaint is perfectly in order and after the amendment also, it will be in order since the amendment was found to be legally susceptible of having retrospective effect. In conclusion, the plea of the revision-petitioner (sic) is rejected.
8. Point No. 2 : The accused who were arrayed, as stated earlier, are : the first accused no. 1, the managing partner (accused No. 2) and the other partners (accused Nos. 3 to 6). It is clear from the evidence on record that the person who field the returns and made statements before the Income-tax Officer is only accused No. 2 The other accused have not field or signed in the returns nor made any statements before the Income-tax Officer. The only allegation is that they have signed in the opening form of the current account. The fact that they have signed in the opening form of the current account would not in any manner render them liable for statements contained in the returns of income and for the oral and personal statements made by accused No. 2 before the Income-tax Officer. It has not been shown at any place that each one of them knew the contents of the returns of income filed by accused No. 2. It has not been the case of the Income-tax Officer that all the partners of the firm have been responsible therefor. Therefore, the plea for the discharge of accused Nos. 3 to 6 is perfectly justified and the order of the Magistrate concerning them does not warrant any interference on that point.
9. Point No. 3 : The third ground of attack is that the reassessment order based on the discovery of new facts which, according to the Income-tax Officer, would constitute the ingredients of the offence having been itself set aside by the Commissioner of Income-tax (Appeals), the complaint also should be held to be objectless and unjustified. It is factually correct that the reassessment order was set aside and the matter remanded to the income-tax authority and that the Department has taken up the matter before the Income-tax Appellate Tribunal which has confirmed the order. Therefore, the matter is settled neither in favour of the Department nor in favour of the accused. It cannot be, therefore, said that the complaint has become objectless and without any basis. However, since the matter is still at large before the Department itself to make up its mind in respect of the acts alleged to have been committed by the accused, it will not the proper for the trial court to proceed with the trial at this juncture. It would be open to the Department to withdrawn the complaint with permission to file it again, if circumstances so warrant. If such a course is not resorted to the court shall stay the proceedings and start them again, once a fresh assessment order is passed and an applications is made before the court to take up the trial.
10. The revision petition is allowed only in respect of accused Nos. 1 and accused No. 2 and dismissed in respect of others. The discharge of accused No. 1 and accused No. 2 is set aside.