Delhi District Court
Jai Singh vs Income Tax Office on 3 December, 2018
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IN THE COURT OF SH. SANJAY KUMAR AGGARWAL
SPECIAL JUDGE03: CBI (PC ACT): DELHI.
Criminal Appeal No.: 125/2018
Jai Singh
60/20, FF, Ramjas Road
Karol Bagh, New Delhi ... Appellant
Versus
Income Tax office
through Sh.Gautam Deb, DCIT
Central Circle25, Income Tax Department
Jhandewalan, New Delhi ... Respondent
J U D G M E N T : Vide this common judgment I shall dispose off two applications u/S 391 Cr.P.C moved by the appellant. The first application was filed alongwith the appeal in this case and the second one was filed during the pendency of the appeal.
Briefly stated the facts relevant for the disposal of present applications are that the appellant was convicted by the Trial Court for the offences u/S 276 CC of Income Tax Act and was sentenced to undergo SI for 6 months alongwith fine of Rs.25000/ for the said offence. The appellant preferred this appeal before this Court. The CR No.125/18 1 of 20 2 appellant had also moved an application u/S 391 Cr.P.C at the time of filing of appeal (hereinafter called the first application) in which he had sought to lead evidence either by this Court or by the trial court for proving and considering two documents i.e. the assessment order dated 30.03.2016 as well as the Commissioner of Income Tax Appeals29 order dated 21.04.2017 (hereinafter called CIT Appeals order).
In the another application u/S 391 Cr.P.C moved by the appellant on 22.09.2018 (hereinafter called the second application) during the pendency of this appeal, the appellant has sought to lead evidence for proving and considering certain documents as mentioned in the list of documents / Index which is referred to as 'Mark A' attached with second application. The said documents refers to the notices u/S 153A Income Tax Act, 142(1) Income Tax Act (hereinafter called IT Act), copies of replies given by the appellant on different occasions etc. It has been mentioned in both the applications moved by the appellant that the respondent had preferred a complaint against the appellant for "willfully" not filing the returns of the income for the assessment year in this case within the stipulated time as per the notice issued CR No.125/18 2 of 20 3 u/S 153A of IT Act. On 11.01.2012 the appellant had filed return of his income declaring the income to be as Rs.6,87,545/. Subsequently on 15.10.2013 a search and seizure u/S 132 of IT Act was conducted at the premises of the appellant for which six notices for different assessment years including the notice for the assessment year of this case were served upon the appellant on 17.06.2014 requiring the appellant to file returns within 15 days of the receipt of the 153A of IT Act notice. On 29.12.2014 in compliance of the notice u/S 153A the appellant again filed his income tax return for the assessment year of this case declaring the same income of Rs.6,87,545/.
It has also been asserted that delay in filing the income tax return after issuance of notice u/S 153A IT Act was not "willful" and it was due to the voluminous record running into approximately 40000 pages that was seized by the Income Tax Department during the search and seizure conducted on 15.10.2013, and also due to the fact that appellant had to file the revised return of income for the assessment years each of which require scrutinizing the seized record of approximately 40000 pages.
On 21.08.2015 the income tax department initiated CR No.125/18 3 of 20 4 Assessment Proceedings u/S 153A of IT Act against the appellant for the assessment year of this case and was issued with notice as mentioned in Annexure A1 of the index attached with the second application. Thereafter, the appellant has sent several replies as mentioned in the index from Annexure A2 to A6 on different occasions. On 22.03.16, the respondent again issued a notice u/S 153A to the appellant asking for further details in respect of assessment proceedings which is mentioned as Annexure A7 in the list of documents attached with the notice. Annexure A8 as mentioned in the application is not being referred to as the Ld. Counsel for the appellant has made a statement in this Court that he is not pressing for the notice mentioned as Annexure A8 in the second application.
On 29.03.16 the appellant had sent another reply to the respondent which is mentioned as Annexure A9 in the second application.
It has also been pleaded in the application that on 30.03.2016 the income tax department passed an Assessment Order u/S 153A of IT Act assessing the income of the appellant for the assessment year of this case at Rs.19,21,388/. However, on 21.04.17 the CIT CR No.125/18 4 of 20 5 (Appeals) passed an oder vide which the appeal against the order of the Assessing Officer was allowed and the CIT (Appeals) upheld the declared income of the appellant to be as Rs.6,87,550/. He also observed that nothing incriminating has been found or seized during the course of search while referring to the search and seizure carried out by the income tax department on the premises of the appellant on 15.10.2013. The tax on the said amount is already stated to have been paid by the appellant.
The Ld. Counsel for the appellant during the course of argument on both the first and second applications vehemently argued that due to inadvertence on the part of the earlier counsel and due to certain overlooking, the documents as contained in the Index "Mark A" attached with the second application as well as documents attached with the first application could not be filed before the Ld. Trial Court for its consideration. It has been urged that Ld. Trial Court could not have arrived at a conclusion to convict the appellant had the appellant produced the said documents proposed to be filed vide both the applications. It was also explained that injustice shall be caused in case the proposed documents sought to CR No.125/18 5 of 20 6 be produced by virtue of both the first and second applications are not allowed to be entertained as the same are relevant for the purpose of appreciating the word 'willful' within the meaning of Section 276 CC of IT Act i.e. the offence under which the appellant had been convicted and sentenced by the Trial Court.
The Ld. Counsel elaborated that by producing the documents as mentioned hereinabove, the appellant wants to establish his innocence either before this Court during the appeal or the Trial Court as the case may be by showing that default on the part of the appellant for not filing the income tax return on time stipulated by virtue of Section 153A of IT Act was neither intentional nor deliberate. It was also urged that the appellant has to surf 40000 documents before filing the return of income tax which he was called upon to file u/S 153A of IT Act. As per Ld. Counsel it was humanly impossible for the appellant to file income tax return in such a short span of time given the fact that not only he was required to file income tax return for the assessment year of this case but he was also required to file income tax return for other years also and this fact can be established only by filing the documents proposed to be filed vide both the CR No.125/18 6 of 20 7 applications.
It was also submitted by Ld. Counsel for the appellant that the orders of the Assessing Officer as well as the orders of the CIT (Appeals) are of utmost importance for the decision of this case as the CIT (Appeals) had reversed the orders of the Assessing Officer by assessing the income of the appellant to be same as that which was filed by the appellant after issuance of notice u/S 153A of IT Act. It was also submitted that since there was no evasion of income tax as upheld by the CIT (Appeals) and since there are sufficient reasons for not filing the income tax return within the period prescribed in the notice u/S 153A of the IT Act, the appellant does not deserve to be convicted and sentenced and he should get atleast a chance to present his case with the support of the documents proposed to be relied upon by the appellant either before this Court or before the Trial court as the case may be, hence he has moved both the first and second applications. It was also explained that sanction to prosecute in this case was granted on 08.04.2016 whereas all the documents proposed to be relied upon are dated prior to the date of sanction.
CR No.125/18 7 of 20
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The Ld. Counsel for the appellant has relied upon the judgment of Hon'ble Supreme Court of India in Sudevanand Vs State through CBI (2012) 3 SCC 387, Govind Chauhan Vs Sriram Sonboir 2014 CriLJ2411 and Globe Trotters International Vs Joseph Fernandes MANU/MH/2111/2010.
Reply to both the applications u/S 391 Cr.P.C was filed by the respondent/Income tax department wherein it has been mentioned that the notices issued by the respondent u/S 153A of the IT Act or replies filed by the appellant or the assessment order passed by CIT (Appeals) will have no bearing on the merits of this case as it is the admitted case of the appellant that appellant had not filed the income tax return within the stipulated period which was granted vide the notice u/S 153A IT Act. It was urged that the nature of assessment proceedings before Assessing Officer or before CIT (Appeals) are different than the prosecution proceedings and that the pendency and even culmination of the same on technical ground does not have any bearing on the criminal proceedings. Referring to Section 276 CC of IT Act, the Ld. Counsel for the respondent argued that the filing of the proposed documents by the appellant in no CR No.125/18 8 of 20 9 way is going to help the appellant or assist the court for reaching out to a particular decision. It was also urged that the appellant has been rightly convicted and sentenced by the trial court and the appellant is trying to dilly delay the matter by moving such applications. The Ld. Counsel further argued that no questions were put to the witnesses during cross examination with respect to the documents proposed to be produced in evidence and there is no reference of such documents in the statement of the appellant recorded u/S 313 Cr.P.C before the Trial Court. It was also urged that number of documents filed by the appellant would amount to de novo trial and the appellant should not be allowed to take the court for a ride and bring the documents as per his whims and conveniences. The respondent requested for rejection of both the first and second applications moved u/S 391 Cr.P.C with heavy cost.
During the course of arguments on both these applications, when the issue of de novo trial was raised by the Ld. Counsel for the respondent as he had apprehension of the same in case the applications are allowed, this court vide its order dated 29.10.2018 had asked the Ld. Counsel for the respondent as to whether he CR No.125/18 9 of 20 10 would verify the documents or the issuance of directions by the respondent with respect to the documents proposed to be filed and considered in evidence, the Ld. Counsel has sought time for the next date. On the next date of hearing on the applications, the Ld. Counsel for the respondent made a statement in writing before this Court that all the documents proposed to be considered in evidence are not denied by the respondent except the document as mentioned as Annexure A8 in the Index "Mark A" attached with the second application filed by the appellant. The Ld. Counsel for the appellant also made a statement simultaneously in writing that he won't agitate for the consideration of the document A8 as contained in Index Mark 'A' attached with the second application.
The statement of rival counsels for the parties were recorded on 12.11.2018 to this effect.
I have heard the Ld. Counsel for the appellant as well as the Ld. Counsel for the respondent on both these applications and have perused the record.
Before proceeding further it would be appropriate to refer to Section 276 CC of the IT Act which runs as under: CR No.125/18 10 of 20 11 "276CC. If a person wilfully fails to furnish in due time [the return of fringe benefits which he is required to furnish under subsection (1) of Section 115WD or by notice under subsection (2) of the said section or section 115 WH or] the return of income which he is required to furnish under subsection (1) of Section 139 or by notice given under [clause (i) of subsection (1) of Section 142] or section 148[or section 153A], he shall be punishable:
(i) in a case where the amount of tax, which would have been evaded if the failure had not been discovered, exceeds [twentyfive] hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine;
(ii) in any other case, with imprisonment for a term which shall not be less than three months but which may extend to [two] years and with fine:
CR No.125/18 11 of 20
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Provided that a person shall not be
proceeded against under this section for failure to furnish in due time the [return of fringe benefits under subsection (1) of Section 115WD or] return of income under subsection (1) of Section 139
(i) for any assessment year commencing prior to the 1st day of April, 1975; or
(ii) for any assessment year commencing on or after the 1st day of April, 1975, if
(a) the return is furnished by him before the expiry of the assessment year; or
(b) the tax payable by him on the total income determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source, does not exceed three thousand rupees.] The appellant has been convicted by the trial court for the aforementioned offence u/S 276 CC. This Section CR No.125/18 12 of 20 13 reflects that it is mandatory on the part of the prosecuting agency i.e. the respondent that he was required to prove that the appellant had "willfully" failed to furnish the income tax return within due time as contained in the notice u/S 153A of the IT Act. After hearing the rival parties, it appears to this Court that the plea of the Ld. Counsel for the appellant cannot be rejected straightway simply on the premise that since the income tax return was not filed by the appellant within the stipulated time granted to him by virtue of notice u/S 153A of IT Act and that it was filed only after expiry of the considered period granted by the said notice. This is because of the fact that the legality has to be balanced with propriety by the Courts. Though, Section 153A IT Act prescribes the punishment for not filing the income tax returns within time after issuance of notice, but the plea of the Ld. Counsel that the appellant had to surf around 40000 pages recovered by the respondent during search and seizure before filing of the return in response to Section 153A IT Act cannot be ignored. Though all the documents proposed to be led in evidence by the appellant as mentioned in both the applications are post expiry of the period granted for filing the IT return CR No.125/18 13 of 20 14 pursuant to notice u/S 153A IT Act, but no harm is going to be caused in case the accused /appellant gets a chance for production of the documents for consideration of either this Court or the Trial court in order to falsify the claim of the respondent that there was a 'willful' default on the part of the appellant for not filing the return within the period granted vide notice u/S 153A of IT Act. It is cardinal principle of Indian Criminal Law jurisprudence that justice should not only be done but it should appear to have been done. It appears to this Court after considering of the said legal jurisprudential principle that there should not remain any doubt in the mind of the appellant that had he produced the documents proposed to be filed and considered, he would not have been convicted.
To substantiate the views of this Court, this Court would like to refer to the judgment of Hon'ble Supreme Court of India in case of Zahira Habibulla H.Sheikh and another v. State of Gujarat and others MANU/SC/0322/2004: (2004) 4 SCC 158: (AIR 2004 SC 3114), wherein it has been held as under:
"47. Section 391 of the Code is another salutary provision which clothes the courts CR No.125/18 14 of 20 15 with the power to effectively decide an appeal. Though Section 386 envisages the normal and ordinary manner and method of disposal of an appeal, yet it does not and cannot be said to exhaustively enumerate the modes by which alone the court can deal with an appeal. Section 391 is one such exception to the ordinary rule and if the appellate Court considers additional evidence to be necessary, the provisions in Section 386 and Section 391 have to be harmoniously considered to enable the appeal to be considered and disposed of also in the light of the additional evidence as well. For this purpose it is open to the appellate court to call for further evidence before the appeal is disposed of. The appellate court can direct the taking up of further evidence in support of the prosecution; a fortiori it is open to the court to direct that the accused persons may also be given a chance of adducing further evidence. Section 391 is in the nature of an exception to the general rule and the powers under it must also be exercised with great care, specially on behalf of the CR No.125/18 15 of 20 16 prosecution lest the admission of additional evidence for the prosecution operates in a manner prejudicial to the defence of the accused. The primary object of Section 391 is the prevention of guilty man's escape through some careless or ignorant proceedings before a Court or vindication of an innocent person wrongfully accused. Where the court through some carelessness or ignorance has omitted to record the circumstances essential to elucidation of truth, the exercise of powers under Section 391 is desirable."
This court has also taken guidance from the judgment of Hon'ble Supreme Court in case of Rambhau and another v. State of Maharashtra MANU/SC/0309/2001: (2001) 4 SCC 759 : (AIR 2001 SC 2120), wherein it has been laid down as under:
"4. Incidentally, Section 391 forms an exception to the general rule that an appeal must be decided on the evidence which was before the trial court and the powers being an exception shall always have to be exercised with caution and circumspection so as to meet CR No.125/18 16 of 20 17 the ends of justice. Be it noted further that the doctrine of finality of judicial proceedings does not stand annulled or affected in any way by reason of exercise of power under Section 391 since the same avoids a de novo trial. It is not to fill up the lacuna but to subsserve the ends of justice. Needless to record that on an analysis of the Civil Procedure Code, Section 391 is thus akin to Order 41 Rule 27 of the Civil Procedure Code."
In both the aforementioned judgments it has been categorically laid down that the primary object of Section 391 Cr.P.C is the prevention of guilty man's escape through some careless or ignorant proceedings before a court or vindication of an innocent person wrongfully accused. It has also been elaborated that when a court through some carelessness or ignorance has omitted to record the circumstances to elucidation of truth, the exercise of powers u/S 391 Cr.P.C is desirable.
As already discussed, in order to give weight to the submissions of Ld. Counsel for the respondent that in case the applications are allowed, it would lead to a de novo trial, this court during the arguments on both these CR No.125/18 17 of 20 18 applications had recorded the statements of the Ld. Counsels for the rival parties. The respondent has not denied the documents proposed to be relied upon by the appellant as mentioned in both the applications except the document A8 as contained in the Index Mark 'A' and the said documents has not been agitated by the Ld. Counsel for consideration u/S 391 Cr.P.C. as is clear from his statement in writing made before this Court. Therefore, all the documents proposed to be relied upon by the Ld. Counsel for the appellant i.e. the documents A 1 to A7 and A9 filed vide second application and the documents i.e. the assessment order dated 30.03.2016 as well as the Commissioner of Income Tax Appeals29 order dated 21.04.2017 filed vide first application does not require any proof in terms of Section 58 of Indian Evidence Act which states that admitted documents need not be proved as they are not denied by the respondent. The document A8 filed vide second application has not been agitated for consideration in evidence by the Ld. Counsel for the respondent.
Accordingly, it is clear that there is no requirement for leading or calling any evidence for the aforementioned documents A1 to A7 and A9 as mentioned in the Index CR No.125/18 18 of 20 19 Mark 'A' attached with second application as well as the documents i.e. the assessment order dated 30.03.2016 as well as the Commissioner of Income Tax Appeals29 order dated 21.04.2017 as mentioned in the first application. Therefore, the apprehension of Ld. Counsel that it would lead to de novo trial also stands eliminated.
With this discussion this court orders that the trial court shall take into consideration the aforementioned documents attached with second application i.e. A1 to A 7 and A9 as mentioned in the Index "Mark A" and also documents mentioned in first application viz the assessment order dated 30.03.2016 as well as the Commissioner of Income Tax Appeals29 order dated 21.04.2017. It is only after consideration of the documents the Trial Court shall pass fresh judgment in this case. It is made clear that the Trial Court shall not call or summon any witness for whatsoever purpose on the application of either party and is not required to grant opportunity to either party to lead evidence. The Trial Court shall mark the aforementioned documents as contained in this para as proved upon being tendered by appellant and would hear final arguments afresh before passing the judgment. The Ld. Counsel for both the CR No.125/18 19 of 20 20 parties have also assured that they will not call for any witness or move any other application before the ld. Trial Court.
Accordingly, both the first and second applications are allowed. Resultantly, the impugned judgment and impugned order on sentence are set aside. No order as to cost. Copy of statements made by the Ld. Counsels for the parties dated 12.11.2018 be sent to Ld. Trial court. Copy of the Index 'Mark A' as well as copy of first application in which the documents proposed to be relied by the appellant besides copy of 'Mark B' be sent to the Ld.ACMM. The documents which are proposed to be relied upon vide first and second applications shall be tendered by the appellant himself before the Ld. Trial Court within 15 days of this order.
The parties are directed to appear before the Court of Ld. ACMM on 10.12.2018. TCR be sent back alongwith copy of this judgment. Appeal file be consigned to record room.
ANNOUNCED IN THE OPEN COURT SANJAY Digitally signed by SANJAY
KUMAR AGGARWAL
rd KUMAR
ON 3 December, 2018 AGGARWAL
Date: 2018.12.04 10:38:38
+0530
(SANJAY KUMAR AGGARWAL)
Special Judge, CBI03(PC Act)
Delhi/03.12.2018
CR No.125/18 20 of 20