Delhi District Court
Ndps Act:(Central District):Tis ... vs Sandeep Singhania on 24 November, 2018
1
IN THE COURT OF SH.NARINDER KUMAR:SPECIAL JUDGE2
NDPS ACT:(CENTRAL DISTRICT):TIS HAZARI COURT:DELHI
Crl. Rev. No. 731/2018
Date of institution: 11.10.2018 Decided on:24.11.2018
Pr. Director of Investigation 1
Through
Sh. Vikas Choudhary, DDIT
Unit 3(2), Civic Centre,
New Delhi. .....Petitioner
Versus
Sandeep Singhania
S/o Late Sh. "Vishwanath Singhania,
R/o Flat No.10, Sukhdam Apartments,
Sector9, Rohini,
New Delhi110085. ....Respondent
JUDGMENT
Petitioner herein was complainant in Complaint Case No.533865/2016, in which respondent herein was 2 arrayed and summoned as accused but ultimately discharged by Learned Addl. Chief Metropolitan Magistrate (Special Courts), vide order dated 11.07.2018, of the offences u/s 276C (1) and 277 of Income Tax Act, 1961 (hereinafter referred to as the Act).
2. Feeling aggrieved by the order of discharge, complainant has challenged the same by way of present petition.
3. In brief, as per case of complainant in the criminal complaint, the first allegation is that the respondent made a wilful attempt to evade tax penalty or interest imposable under the provisions of the Act for the year 20122013, relevant to the assessment year 20132014 and thereby made himself liable for an offence u/s 276C (1) of the Act.
The other allegation levelled against him is that the respondent during investigation, respondent made a false statement on oath on 07.12.2015 knowing or having 3 reason to believe the same to be false. He also made a false statement in verification of the return of the income pertaining to the aforesaid financial year and assessment year and thereby made himself liable for an offence u/s 277 of Income Tax Act.
As to the false statements, the allegation is that the respondent, while furnishing the return of income tax for the aforesaid financial year relevant to the assessment year 20132014 did not declare any foreign income/foreign investment and income from foreign assets whereas actually, as per the document received from the competent authorities of British Virgin Islands under 'Exchange of Information' Article of IndoBVI Tax Information Exchange Agreement (TIEA) and competent authority of Singapore under 'Exchange of Information' Article of IndiSingapore DTAA, he is a Director and also a shareholder of M/s Hessview Strading Pte Ltd.ever since 23.04.2008, a BVI company, holding 1 share purchased @ 1 Dollar per share 4 in F.Y 200809 I.e. relevant to the assessment year 200910. He is also an Authorized Representative and beneficial owner of UBS AG, Singapore bank account no.143624 having substantial deposits there in of 5341.82 USD or Rs.290643.62 [as per exchange rate/conversion rate of USD in terms of Rupees prescribed by the RBI for F.Y.201213] during Financial Years 201213 i.e. relevant to the Assessment Years 201314.
But, the copy of passport submitted to the UBS AG, Singapore, as forwarded by the Singapore authorities, is one of the documents collected during investigation, which goes to show that the accusedrespondent is the beneficial owner of the said account.
4. In para no.7 of the impugned order Learned ACMM has referred to the factors which are taken into consideration for the purpose of framing of charge. In this regard, reference has been made to the following cases:
1. "Union of India vs Prafulla Kumar", AIR 1979 5 Supreme Court 366;
2. "State of Maharashtra and others vs Som Nath Thapa and other," JT 1996 (4) SC 615;
3."State of Bihar vs Ramesh Singh", AIR 1997 SC 2018: (1997 CRI LJ 1606),
4. "Umar Abdula Sakoor Sorathia vs. Intelligence Officer Narcotic Control Bureau", JT 1999 (5) SC 394,
5. "Kalu Mal Gupta vs. State", 2000 I AD Delhi
107.
5. Learned ACMM has passed order of discharge while observing:
(a) That the bank statement of M/s Hessview Trading Pte. Ltd, continuation showed negative balance and the complainant / petitioner did not file any document to show any deposit made by the accused - respondent in the said account of the 6 said company;
(b) That in the show cause notices Ex. CW 1/14 & 1/16, the complainant - petitioner did not mention any thing to suggest that after the statement of the accused u/s 131 (1A) of the Act, the complainant made any enquiry to verify the claims of the accused;
(c) That the complainant petitioner nowhere mentioned that the details of the passport, as available with UBS AG, Singapore, were verified from the passport office;
(d) That the complainant - petitioner did not obtain any opinion of handwriting expert for the purpose of verification of the signature of the accused - respondent on the account opening form for their comparison;
(e) that the complainant - petitioner did not examine any officer from M/s Goodwill 7 Hospital and Research Centre Ltd to verify the claim of the accused - respondent about delivery of his passport details and their availability on the server of the said company and no handwriting expert was examined, in view of the denial by the accused regarding signatures available on the bank records.
6. Before this court, learned counsel for the complainant - petitioner has contented that the impugned order deserves to be set aside as there are sufficient grounds to presume that the accused - respondent committed the two offences i.e. u/s 276 C (1) & 277 of the Act. In support of his contention learned counsel has referred to the averments put forth in the complaint and the documents annexed thereto and also decisions in Amit Kapoor Vs. Ramesh Chander & Anr. (2012) 9 Supreme Court Cases 460; Onkar Nath Mishra & Ors. Vs. State ( NCT of Delhi) and Anr (2008) 2 Supreme Court cases 561; State 8 of Tamil Nadu Vs. N. Suresh Rajan and Others (2014)11 Supreme Court cases 709.
7. On going through the above cited decisions, court finds that Hon'ble Apex Court has clearly outlined the factors which are to be taken into consideration at the time court is to find out if charge is or not required to be framed against an accused. There cannot be any dispute over the well settled law as to the factors to be considered at the given stage.
8. So far as the offence u/s 276 C (1) of the Act is concerned, learned counsel for the accused - respondent has contended that as per the documents relied upon by the complainant, the amount of $5341.82 (Rs. 2,90,643.62) shown as credit entries, during the assessment year 2013 14, are actually the reversal entries in respect of the charges initially debited by the bank during the period from May 2008 to July 2012.
9. Having gone through the debit entries, initially 9 made by the concerned bank during the aforesaid period, coupled with the reversal of the said debit entries, court has put specific query to learned counsel for the petitioner as to how, such reversal entries can be termed to be income. Learned counsel for the petitioner has categorically submitted that he cannot make any comment in this regard.
10. In view of the ultimate effect of the reversal entries made by the bank in respect of the entries. which were earlier shown as debit entries, in respect of certain charges debited by the bank during the period from May 2008 to July 2012, it cannot be said that these entries were actually credit entries depicting any income. Therefore, provisions of Section 276 C (1) of the Act are not attracted in respect of these entries.
11. So far as credit entry dated 26.09.2008 of 200 dollars available in the statement of account for the period from 01.09.2008 to 30.09.2008, learned counsel for the accused respondent has pointed out that sanction dated 10 11.04.2016 was accorded for prosecution of the accused for the assessment year 201314 and as such no prosecution could be launched in respect of this credit entry dated 26.09.2008.
Learned counsel for the complainant petitioner does not dispute that the sanction has been accorded for the assessment year 201314.
In this situation, for want of sanction for prosecution in respect of the credit entry of 200 dollar, no charge could be framed against the accused for his trial for the offence u/s 276 C (1) of the Act.
12. So far as the other offence u/s 277 of the Act is concerned, learned counsel for the complainant - petitioner has referred to the documents collected by the complainant from different agencies as specified in the complaint, to the return file by the accused and to the statement made by him on oath u/s 131 (1A) of the Act, and the two show causes notices served upon the accused, and submitted that 11 the accused made a false verification in the return for the financial year 201213, by not declaring that he was having aforesaid foreign company and foreign bank account.
Further it has been submitted that the accused also made false statement on oath on 07.12.2015 before ADIT, knowing and having reasons to believe the same to be false and which he did not believe to be true, when he stated therein that
(a) he was neither a director, nor share holder or beneficial owner in the aforesaid foreign entity from 01.04.199 till date i.e. 07.12.2015;
(b) that he did not hold any foreign
bank account in his name or in the
name of his family members or any
company from 01.04.199 till date
i.e. 07.12.2015;
(c) that he was not having any financial
12
interest in any foreign entity during the said period;
(d) that he was never a signatory to any foreign bank account during the said period.
13. On the other hand learned counsel for the accused - respondent has submitted that the allegation about making of a false statement by the accused as respondent in the return for the assessment year 201314 is without any basis, as actually the aforesaid company I.e. M/s Hessview Trading Pte. Ltd, incorporated on 19.03.2008 was subsequently struck off from the register of corporate affairs on 01.11.2009 and no such company was in existence at the time of filing of aforesaid return.
14. Another argument raised by learned for the accused - respondent is that the complainant has considered the accused to be an authorized representative of the said company without any basis.
1315. As regards signatures available on the bank account opening form and other documents relied on by the complainant, learned counsel has submitted that the same do not tally with the signatures of the accused respondent as appearing in his passport, and complainant did not verify or cross check his signatures.
16. Reference has been made to the statement dated 07.12.2015 made by the respondent before ADIT ( investigation), wherein the accused stated that his particulars such as passport copy were misused, to contend that the complainant did not inquire into this matter.
17. Learned counsel has also submitted that the documents relied on by the complainant are only photocopies of documents and no reliance can be placed thereon.
Learned counsel for the accused - respondent has also submitted that for the purpose of section 277 of the Act making of false verification in income tax return 14 requires mens rea ,but this is case where mens rea cannot be attributed to the accused respondent. In support of his contentions, learned counsel for the accused - respondent has relied on following decisions:
(1) Moosa S.Madha & Azam S.Madha v.
Commissioner of IncomeTax, West Bengal, Calcutta, 1973 SCC (4) 128;
(2) K.A.Khaja v. Sixth Incometax Officer, Criminal Miscellaneous Petition No.4845 of 1987 decided by Hon'ble High Court of Madras on October 11, 1990;
(3) Nuchem Limited v. Deputy Commissioner of Incometax, Criminal Misc. No.5476 of 1994, decided by Hon'ble High Court of Punjab and Haryana on July 3, 1995;
(4) Patna Guinea House v.
Commissioner of Incometax, [2002] 15 Taxman 883 (PAT.) (5) Satya Narain Dalmia v. State of Bihar, [2000] 110 Taxman 28 (PAT.);
(6) Commissioner of Incometax v. Ram Rup Kishan, [1992] 63 TAXMAN 410 (Punj. & Har.);
(7) Kuldip Rai Chopra, Incometax Officer v. Sohan Singh Dhiman, [1977] 110 ITR 521 (Punj. & Har.);
(8) Income tax Officer v. Rulia Ram Dewan Chand Thanesar [1992] 194 ITR 562 (Punj. & Har.);
(9) Incometax Officer v.
T.V.Rajamanickam, [1998] 232 ITR 293 (MAD.);
(10) Kapurchand Shrimal v. Tax Recovery Officer, [1969] 72 ITR 623 (SC); 16
(11) PNB Finance & Industries Ltd. v.
Incometax Officer, [1985] 22 Taxman 561 (Delhi);
(12) Vijaya Commercial Credit Ltd. v. Sixth Incometax Officer, [1987] 34 Taxman 235 (KAR.)
18. Undisputedly the accused - respondent has a passport. Copy of the passport of the accusedrespondent was one of the documents collected by the complainant from BVI (British Virgin Islands) during investigation. The documents so collected reveal that the accused - respondent was Director of M/s Hessview Trading Pte. Ltd since 23.04.2008, and also the only share holder of the said company, holding one share of the face value of USD 1, having bought the said share during the financial year 200809. Record reveals that the said company had bank account number 143624, opened on 02.05.2008 with UBS AG of Singapore and the accused 17 was shown as authorized representative, as per the bank records.
Copy of the passport of the accused was submitted at the time of opening of the said bank account.
19. It is not case of the accused respondent has filed any complaint with the aforesaid bank regarding misuse of his passport by anyone else or got a case registered against anyone in this regard.
On having gone through the documents collected by the complainant from the aforesaid foreign agency, when the complainant examined the accused respondent, the contention that the documents are only photocopies, does not come to the aid of the accused respondent, keeping in view the stage of the litigation and the factors to be taken into consideration at the stage of charge.
20. In view of the material relied on by the complainant, at this stage, it cannot be said that the 18 allegation regarding the false verification of the concerned return and making of false statement on oath, are without any basis.
21. As regards the mens rea, learned counsel for the respondent has himself put forth the argument that this aspect has to be judged.
It can be so judged only after the trial and not at the stage. The decisions cited by the learned counsel for the respondent, in which the accused persons were acquitted, after full trial, do not come to the aid of the accused respondent on the point of framing of charge.
Even otherwise in K.A. Khaja Vs. sixth Income Tax Officer ( 1992) 196 ITR 627 ( Madras), relied on by learned counsel for the accused respondent, it was observed, as rightly pointed out by learned counsel for the petitioner, that if the petitioner therein claimed bonafide and lack of mens rea, it was also always open to him to bring out such facts in the course of trial.
1922. Learned Counsel for the petitioner has relied on decision in SASI Enterprises v. CIT, (2014) 5 Supreme Court Cases 139 and P.R.Metrani v. Commissioner of Income Tax, Bangalore, (2007) 1 Supreme Court Cases 789 on the point of nature and applicability of the presumption to be drawn Kapurchand's case ( supra), relates to recovery of tax. Similarly PNB Finance and Industries Ltd.'s Case (supra) also pertains to recovery of tax. As such, these decisions, are not applicable to the present case as rightly pointed out by learned counsel for the petitioner.
Vijaya commercial credit limited's case (supra) pertains to sentence in case of a company and is not applicable to the present case.
Even if no prima facie case for an offence u/s 276 C (1) is made out against the accused, court finds it to be a case based on sufficient material for the offence u/s 277 of the Act.
2023. In view of the above discussion, court finds that the impugned order of discharge of the accused - respondent deserves to be set aside, when on the basis of the material available on record, prima facie case for an offenceu/s 277 of Income Tax Act is made out against the accused - respondent.
24. As a result, the revision petition is partly allowed, the impugned order is set aside so far as discharge of the accused for the offence u/s 277 of Income Tax is concerned. Learned ACMM to frame charge against the accused for the offence u/s 277 of Income Tax Act, record plea of the accused and then proceed in accordance with law.
Trial Court Record be returned with copy of Judgment. File of revision petition be consigned to record Digitally signed room. by NARINDER NARINDER KUMAR Announced in the open Court KUMAR Date:
2018.11.29 th on this 24 day of November 2018 10:18:28 +0530 (Narinder Kumar) Special Judge NDPS - 02 (Central) Tis Hazari Courts, Delhi.