Bangalore District Court
Central Bureau Of vs Sri.U.A.Chandramouli on 30 July, 2016
IN THE COURT OF THE XLVII ADDITIONAL CITY CIVIL
& SESSIONS JUDGE & SPECIAL JUDGE FOR C.B.I.
CASES (CCH-48), BENGALURU
Dated this the 30th day of July 2016
Present: SRI.ASWATHA NARAYANA, B.Sc., LL.M.,
XLVII Additional City Civil & Sessions Judge
& Special Judge for CBI Cases, Bengaluru.
SPECIAL CRIMINAL CASE No.155/2010
COMPLAINANT: Central Bureau of
Investigation,
Represented by the
Inspector of Police,
Anti Corruption Branch,
Ganganagara,
Bengaluru.
(By Smt.K.S.Hema, Public
Prosecutor.)
-Vs-
ACCUSED-1: Sri.U.A.Chandramouli,
S/o.Late Sri.U.Aswathanarayanaiah,
The then Deputy Commissioner
of Income Tax,
Central Circle (1)(3), Income Tax
Department, Bengaluru.
R/o.No.10, MHB Colony,
Parvathi Nagara,
Bellary District, Karnataka.
(By Sri.M.V.Seshachala, Advocate.)
ACCUSED-2: Sri.S.Narasaraju,
S/o.Sri.S.N.Seshamaraj, Chairman,
M/s.Children's Educational Society,
1st Phase, J.P.Nagar,
Bengaluru. ........... Abated.
2 [Spl.C.C.155/2010-J]
ACCUSED-3: Sri.Dhirender Kumar Jha,
S/o.Sri.Upender Prasad Jha,
The then Additional Commissioner
of Income Tax, Central Range-1,
Income Tax Department,
Bengaluru.
R/o.Mallikarjun Nilaya, 3rd Cross,
Pampa Nagar, Sagar Road,
Shimoga District.
(By Sri.C.G.Sundar, Advocate.)
1. Nature of Offence: Offence punishable under
Sections 120-B r/w. 218 & 420
of the Indian Penal Code, 1860
and Sections 13(2) r/w. 13(1)(d)
of the Prevention of Corruption
Act, 1988.
2. Date of Commission of
Offence: During 2006-2007.
3. Date of First Information
Report: 26.09.2008.
4. Date of Arrest of
the Accused-1 to 3: Not arrested.
5. Date of Commencement
of Evidence: 07.04.2014.
6. Date of Closure of
Evidence: 13.04.2016.
7. Date of Pronouncement
30.07.2016.
of Judgment:
8. Result of the Case : Convicted.
(ASWATHA NARAYANA)
XLVII Additional City Civil and Sessions Judge
and Special Judge for CBI Cases,
Bengaluru.
3 [Spl.C.C.155/2010-J]
JUDGMENT
This case is filed by the Complainant alleging that during 2006-2007, the Accused-1, who was working as Deputy Commissioner of Income Tax, Central Circle-I(3), Bengaluru, and the Accused-3, who was working as Additional Commissioner of Income Tax, Central Range-I, Bengaluru, entered into Criminal Conspiracy with the Accused-2, who was the Chairman of M/s.Children's Education Society (for short, 'the CES'), to Cheat the Income Tax Department in the matter of assessment of Income Tax of the CES; in furtherance of the said Conspiracy, the Accused-1 and 3 deliberately and fraudulently returned a key document reflecting the financial transactions of the CES with M/s.Binco Constructions Private Limited, Bengaluru, to the Accused-2 without retaining the Copies on record; the Accused-1 had carried out the assessment of the CES for the Assessment Year 2004-2005 ignoring the said financial transactions by reducing the tax liability and that thereby causing loss to the Income Tax Department and corresponding gain to the CES and that thus, the Accused-1 to 3 have committed the offence punishable under Sections 120-B r/w. 218 and 420 of the Indian Penal Code, 1860 (for short, 'the IPC') and Sections 13(2) r/w. 13(1)(d) of the Prevention of Corruption Act, 1988 (for short, 'the PC Act').
2. After taking cognizance, on 31.05.2010, the then Presiding Officer of this Court issued summons to the 4 [Spl.C.C.155/2010-J] Accused-1 to 3. After appearance of the Accused-1 to 3, Copies of documents were furnished to them. After hearing both the sides before framing Charge, on 17.12.2013, the then Presiding Officer of this Court framed Charge against the Accused-1 to 3 for the offence punishable under Sections 120-B and 420 of the IPC and against the Accused-1 and 3 for the offence punishable under Section 218 of the IPC and Sections 13(2) r/w. 13(1)(d) of the PC Act. When the said Charge was read over and explained to the Accused-1 to 3, they pleaded not guilty to the same and claimed to be tried.
3. During trial, the Complainant got examined 16 Witnesses as P.W.1 to P.W.16 and got marked 47 Documents as Ex.P.1 to Ex.P.47 and 1 Material Object as M.O.1 on his behalf. With that evidence, the Complainant closed his side.
4. During examination of the Accused-1 to 3 under Section 313 of the Cr.P.C., they were permitted to file their Written Statement under Section 313(5) of the Cr.P.C., in respect of the incriminating evidence available against them. Accordingly, the Accused-1 to 3 filed Written Statement denying the case of the Complainant. But, they did not choose to produce any oral evidence on their behalf. However, they got marked 15 documents as Ex.D.1 to Ex.D.15 through P.W.1, P.W.2, P.W.4, P.W.7 and P.W.10 while Cross-examining them. With that evidence, they also closed their side.
5 [Spl.C.C.155/2010-J]
5. When the case was posted for arguments, the Accused-2 died. Hence, on 09.06.2016, case against the Accused-2 was ordered to be abated.
6. Heard arguments of both the sides. Perused records, including the Written Arguments filed on behalf of both the parties.
7. On considering the rival contentions of both the parties, the Points that arise for determination in this case are as follows:-
1. Whether there is a valid Sanction for prosecuting the Accused-1 and 3?
2. Whether the Accused-1 and 3 entered into an Agreement with the Accused-2 to Cheat the Income Tax Department and thereby committed an offence of Criminal Conspiracy punishable under Section 120-B r/w.
Section 420 of the IPC, as alleged?
3. Whether the Accused-1 and 3 fraudulently and dishonestly returned a key document without retaining its Copy in order to save the Accused-2 from tax liability and punitive action and thereby committed an offence punishable under Section 218 of the IPC, as alleged?
4. Whether the Accused-1 and 3 cheated the Income Tax Department and dishonestly induced the Income Tax Department to deliver the key document to the Accused-2 and thereby committed an offence punishable under Section 420 of the IPC, as alleged?
6 [Spl.C.C.155/2010-J]
5. Whether the Accused-1 and 3 abused their position as Public Servants to obtain pecuniary advantage and thereby committed an offence of Criminal Misconduct punishable under Sections 13(2) r/w.13(1)(d) of the PC Act, as alleged?
6. What Order?
8. Findings of this Court on the above Points are as follows:-
Point-1: Affirmative;
Point-2: Affirmative;
Point-3: Affirmative;
Point-4: Affirmative;
Point-5: Affirmative;
Point-6: See final portion of this Judgment.
REASONS UNDISPUTED FACTS
9. The Accused-1 was working as the Deputy Commissioner of Income Tax (for short, 'the DCIT'), Central Circle-1(3), Bengaluru, during 2006-2007 under the Director General of Income Tax (Investigation) (for short, 'the DGIT'). The Accused-3 was working as the Additional Commissioner of Income Tax (for short, 'the ACIT'), Central Range-1, Bengaluru, from June 2006 to 7 [Spl.C.C.155/2010-J] July 2007. P.W.1-Sathyamurthy succeeded the Accused-1 and took charge of that office on 11.06.2007 as DCIT, Central Circle-1(3), Bengaluru and worked in that office till June 2008. P.W.4-Sri.Narendra Kumar was working as ACIT, Central Range-2, Bengaluru, from 2003 to January 2007. P.W.6-Sri.S.N.Sethuram was working as DCIT, Central Circle-2, Bengaluru, during May 2003 to February 2007. P.W.10-Sri.Anil Kumar Agarwal was working as the Commissioner of Income Tax (for short, 'the CIT'), Central Circle, Bengaluru. P.W.12-Sri.T.N.C.Sridhara was working as DCIT, Central Circle-1(1), Bengaluru. Ex.D.11 is the document showing the hierarchy in the Income Tax Department.
10. The CES is running number of Educational Institutions. The Accused-2 is the Chairman of the CES. The CES is an Income Tax Assessee. In the year 2003, as a Chairman of the CES, the Accused-2 filed Income Tax Return as per Ex.D.1 on behalf of the CES for the Assessment Year 2003-2004. The Accused-1 examined the Income Tax Return filed as per Ex.D.1 and passed Assessment Order as per Ex.D.2 on 24.03.2006. In that Order, exemption claimed by the CES under Section 10(23)(C)(iiiad) of the Income Tax Act (for short, 'the IT Act') was rejected by the Accused-1.
11. In the year 2005, the Accused-2 filed Income Tax Return as per Ex.D.3 on behalf of the CES for the Assessment Year 2004-2005. The Accused-1 examined the said Income Tax Return filed as per Ex.D.3. In the said 8 [Spl.C.C.155/2010-J] Return also, the CES had claimed exemption under Section 10(23)(C)(iiiad) of the IT Act. Not being satisfied with the claim made by the CES, the Accused-1 decided to conduct survey under Section 133(A) of the IT Act in the premises of the CES. By taking approval from the Accused-3, the Accused-1 conducted survey in the premises of the CES on 29.08.2006. As directed by the Accused-1, P.W.12 conducted survey at Oxford Engineering College, Hosur Road, Bengaluru, which is also an Institution run by the CES. P.W.2-Smt.Padma was working as Stenographer in the Office of the Accused-3 at that time. P.W.3- Smt.Alamelu was working as Senior Tax Assistant in the Office of the Accused-1 at that time. These P.W.2 and P.W.3 assisted the Accused-1 and P.W.12 in that survey. Ex.P.16 is the File in respect of the said Survey Proceedings.
12. During the said survey, documents shown in Annexure-I were seized from the locker placed in Chambers of the Accused-2, documents shown in Annexure-II were seized from the Admission Office and Accounts Section and the documents shown in Annexure- III were seized from the Admission Office of the CES. Pages-33 to 38 of Ex.P.16 show the list of those seized documents. The Accused-1 impounded all those documents as per the Order dated 29.08.2006, which is at Page-9 of Ex.P.16. Ex.P.2 to Ex.P.15 are some of those documents impounded by the Accused-1 under the said Order. The Accused-1 submitted Interim Survey Report dated 06.09.2006 as per Ex.P.16(d) to the CIT.
9 [Spl.C.C.155/2010-J]
13. As per Section 133(A)(3) of the IT Act, for keeping impounded documents with the Assessing Officer beyond 10 days, it is mandatory to take approval of the DGIT. For retention of the documents impounded on 29.08.2006 by the Accused-1, he made correspondence through the Accused-3 and P.W.10 and obtained permission from the DGIT on 07.09.2006 to retain those documents up to 31.03.2007. Ex.P.1 is the File relating to retention of the impounded documents. Ex.P.1(a) to Ex.P.1(d) are the Letters regarding permission sought by the Accused-1 and given to him for retention of the impounded documents.
14. In the meantime, the proceedings were going on before the Accused-1 relating to the said Assessment and Survey. Ex.P.17 is the File relating to Monthly Report of Surveys. The Accused-1 submitted Final Survey Report as per Ex.P.17(b) on 12.11.2007 to the Accused-3. As there was delay in submitting the Final Survey Report, the Accused-3 had called for an Explanation from the Accused-
1. The Accused-1 submitted his Explanation as per Ex.P.17(c) on 12.11.2007. The Accused-3 forwarded that Explanation and Final Survey Report to the CIT on 13.11.2007 as per Letter-Ex.P.17(d). On 22.12.2006, the Accused-1 passed Assessment Order as per Ex.D.9 in respect of the Income Tax Return filed by the CES for the Assessment Year 2004-2005.
10 [Spl.C.C.155/2010-J]
15. The Accused-1 was on leave in the month of October 2006. P.W.5-Sri.L.R.Govinda Rao was holding the additional charge of the post of the Accused-1. On 13.10.2006, he returned the impounded documents mentioned in Annexures-2 and 3 to the Assessee by obtaining Xerox Copies of the same as per Pages-17 to 67 of File-Ex.P.23 and also Acknowledgment of the Assessee and reported the same to the DGIT through Letter- Ex.P.1(e).
16. On 26.03.2007, the Accused-1 wrote a Letter as per Ex.P.1(e) to the DGIT seeking permission to retain the impounded documents shown in Annexure-I till 31.12.2007 on the ground that Assessee had not produced Books of Accounts and not furnished details with regard to those documents and that nature of transactions of those documents have to be examined in the course of pending Assessment Proceedings pertaining to the Assessment Years 2005-2006 to 2007-2008. The Accused-3 also recommended for such retention by forwarding Ex.P.1(e) to the DGIT through his Letter-Ex.P.1(f). P.W.10 forwarded Ex.P.1(e) and Ex.P.1(f) through his Letter-Ex.P.1(g) to the DGIT. In turn, the DGIT accorded permission as per Ex.P.1(h) on 29.03.2007 to the Accused-1 to retain those impounded documents up to 31.12.2007.
17. In the meanwhile, after transfer of the Accused-1 and after P.W.1 took charge of the office of the Accused-1, he also sought permission on 27.12.2007 through Letter-
11 [Spl.C.C.155/2010-J] Ex.P.1(i) to retain the documents impounded by the Accused-1 shown in Annexure-I, except the Document shown as Sl.No.13, from the DGIT. By that time, the Accused-3 was transferred and Sri.Ajit Korde had succeeded him. He sent recommendation Letter as per Ex.P.1(j) to the DGIT. P.W.10 forwarded Ex.P.1(i) and Ex.P.1(j) to the DGIT through Letter-Ex.P.1(k). On 31.12.2007, the DGIT granted permission as per Ex.P.1(l) to P.W.1 to retain the documents till 31.12.2008.
18. Among the documents seized as per Annexure-I and impounded by the Accused-1, Document at Sl.No.13 is shown at Page-37 of Ex.P.16 as "One bunch of sheets showing interest calculation". On 29.03.2007, the Accused- 1 returned that document to the Assessee. Ex.P.16(b) is the Note and Ex.P.16(b)(1) is the Signature made by the Accused-1 in this regard. In the Letter-Ex.P.1(i) also, P.W.1 has mentioned about return of the said Document at Sl.No.13 by the Accused-1 to the Assessee. On 23.07.2007, P.W.1 wrote a confidential D.O. Letter as per Ex.P.17(a) to the ACIT about the Assessment Proceedings relating to the CES. In that Letter also, he has mentioned about return of the said Document at Sl.No.13 by the Accused-1 to the Assessee.
19. After according permission to retain the documents up to 31.12.2008 as per Ex.P.1(l), the DGIT wrote a Letter on 04.01.2008 as per Ex.P.1(m) calling explanation from P.W.10 as to why the impounded 12 [Spl.C.C.155/2010-J] documents were returned though Assessment Proceedings were pending for the Assessment Years 2006-2007 and 2007-2008 and also as to on what ground recommendation was made to retain the documents till 31.12.2008. He also sent a Reminder as per Ex.P.1(n) on 21.01.2008. Those Letters were sent to P.W.1. P.W.1 submitted his Explanation as per Ex.P.1(o). The ACIT i.e., Sri.Ajit Korde also submitted his Explanation as per Ex.P.1(p) along with Ex.P.1(o) to P.W.10. In turn, P.W.10 wrote a Letter as per Ex.P.1(q) on 31.01.2008 to the DGIT. The DGIT wrote a Letter as per Ex.P.1(r) on 10.03.2008 to P.W.10 to enquire into the facts and to submit a Report. P.W.10 through his Letter-Ex.P.1(s) asked the ACIT for a specific Report in the same matter. In turn, the ACIT called explanation as per Ex.P.1(t) on 17.03.2008 from the Accused-1. The Accused-1 gave his Explanation as per Ex.P.1(u). The said Explanation was forwarded to P.W.10 by the ACIT along with his Remarks as per Ex.P.1(v). P.W.10 submitted his Report to the DGIT as per Ex.P.1(w). On 29.04.2008, P.W.10 called for explanation from the Accused-3 as per Letter-Ex.P.26. The Accused-3 gave his Explanation as per Ex.P.1(x), which was forwarded to the DGIT by P.W.10 through Letter-Ex.P.1(y).
20. P.W.1 passed Assessment Order as per Ex.D.4 on 31.12.2007 in respect of the Income Tax Return filed by the CES for the Assessment Year 2005-2006.
13 [Spl.C.C.155/2010-J]
21. The Accused-3 worked as ACIT from June 2006 to July 2007 under P.W.10. During that period, P.W.10 found that performance of the Accused-3 was outstanding so far as conduct, integrity and devotion to duty are concerned. Accordingly, P.W.10 has mentioned in the Confidential Reports of the Accused-3 for the years 2006- 2007 and 2007-2008. Ex.D.14 and Ex.D.15 are the Copies of those Confidential Reports.
22. B.N.Group of Companies consists of the proprietary firm of Sri.Bamdev Naik-P.W.11 and also the firm-M/s.Binco Constructions Private Limited. P.W.11 is the Managing Director of M/s.Binco Constructions Private Limited. P.W.16-Sri.Sathish Kumar is the Assistant General Manager (Accounts) of B.N.Group of Companies. The said firms deal with constructions of roads, buildings, canals, dams etc. Those firms supplied labours to the CES for construction of buildings. Those firms are also Income Tax Assessees, coming under DCIT, Central Circle-2(3), Bengaluru. P.W.6-Sri.S.N.Sethuram was the said DCIT during May 2003 to February 2007. He passed Assessment Orders in respect of the said 2 firms. Ex.P.21 and Ex.P.22 are the Assessment Files of those firms for the Assessment Year 2004-2005. Ex.D.12 is the Appraisal Report relating to those 2 firms prepared by Sri.K.V.K.Ravi Ramachandran, Deputy Director of Income Tax (Investigation), Bengaluru.
14 [Spl.C.C.155/2010-J]
23. On the basis of source information alleging that the Accused-1 and 2 have committed the offence punishable under Sections 120-B and 420 of the IPC and Sections 13(2) r/w. 13(1)(d) of the PC Act, on 26.09.2008, Sri.Narasimha Komar, the then Superintendent of Police, CBI, ACB, Bengaluru registered this case and submitted FIR-Ex.P.30 to the Court. He entrusted the investigation of this case to P.W.15-Sri.L.S.Padma Kumar, who was the Deputy Superintendent of Police and the Additional Superintendent of Police, CBI, ACB, Bengaluru.
24. P.W.15 filed Petition as per Ex.P.31 to this Court seeking Search Warrant to search the residence and office premises of the Accused-1 and 2. This Court issued Search Warrants as per Ex.P.32 to Ex.P.34. On 01.10.2008, P.W.15 conducted Search Proceedings in the office and residential premises of the Accused-1 and the office premises of the Accused-2. He also made search under Section 165(1) of the Cr.P.C., in the residential premises of the Accused-1 at Ballari by making a record as per Ex.P.35. Ex.P.36 to Ex.P.39 are the Search Lists prepared while conducting those Search Proceedings.
25. P.W.9-Sri.Khaleemulla Khan was working as DCIT at Head Quarters (Administration & Vigilance) at Bengaluru in the year 2008. He handed over Files and a Hard Disc-M.O.1, totally 14 items, relating to the CES to P.W.15. P.W.15 seized the same under a Seizure Memo- Ex.P.25 during investigation.
15 [Spl.C.C.155/2010-J]
26. On 18.12.2008, P.W.15 handed over M.O.1 with a Letter-Ex.P.40 to the Government Examiner for Questioned Documents (for short, 'the GEQD'), Hyderabad, seeking Expert Opinion. On 30.03.2009, P.W.15 received GEQD Report as per Ex.P.41.
27. On 13.02.2009, P.W.15 received a File-Ex.P.21 relating to M/s.Binco Constructions Private Limited from the Income Tax Department. On 23.06.2009, he also received 5 Files-Ex.P.43 to Ex.P.47 from Sri.Ramanan, the then Vigilance Officer of Income Tax Department and he seized the same under a Seizure Memo-Ex.P.42.
28. After completing investigation and after obtaining Sanction Order as per Ex.P.29, P.W.15 filed Charge Sheet on 22.04.2010 against the Accused-1 to 3.
POINT-1
29. The learned Advocates appearing on behalf of the Accused-1 and 3 have contended that as the offences alleged against the Accused are punishable under the provisions of the PC Act as well as the IPC, valid Sanction of the Competent Authority under Section 19 of the PC Act to prosecute the Accused-1 and 3 for the offence punishable under Sections 13(2) r/w. 13(1)(d) of the PC Act and also valid Sanction under Section 197 of the Cr.P.C., to prosecute the Accused-1 and 3 for the offence punishable under Sections 120-B, 218 and 420 of the IPC 16 [Spl.C.C.155/2010-J] are necessary and that as the Complainant has not established such a Sanction to prosecute the Accused-1 and 3, the prosecution of the Accused-1 and 3 is illegal and that on this ground alone, the Accused-1 and 3 are entitled for acquittal. In support of his Arguments, the learned Advocate appearing on behalf of the Accused-1 has relied upon the following citations:
1. Amal Kumar Jha -Vs- State of Chhatisgarh & Another [Crl. Appeal No.396/2016 dated 26.04.2015];
2. N.K.Ganguly -Vs- CBI, New Delhi [(2016) Crl.L.J. 371];
3. Mohd. Iqbal Ahmed -Vs- State of Andhra Pradesh [(1979) 4 SCC 172];
4. Madan Mohan Singh -Vs- State of U.P. [1954 Crl.L.J. 1656];
5. Md.Sabir Hussain -Vs- State of Orissa [(1983) 56 CLT 288].
In support of his arguments, the learned Advocate appearing on behalf of the Accused-3 has relied upon the following citation:
Prof.N.K.Ganguli -Vs- CBI, New Delhi, Order dated 19.11.2015 [2016 Crl.L.J. 371].
30. Sum and substance of the principles laid down in the decisions of the above citations are as follows:-
If the act or omission complained of due to which offence is stated to have been committed, is intrinsically connected with the
17 [Spl.C.C.155/2010-J] discharge of official duty of the Accused, protection under Section 197 of the Cr.P.C., from prosecution without Sanction of the Competent Authority, is available to the Accused and he cannot be prosecuted without such Sanction;
For the purpose of obtaining previous Sanction from appropriate Government under Section 197 of the Cr.P.C., it is imperative that alleged offence is committed in discharge of official duty by the Accused;
It is incumbent on the Prosecution to prove that a valid Sanction has been granted by the Sanctioning Authority after it was satisfied that a case for sanction has been made out constituting the offence. This should be done in 2 ways: either
1. by producing the original Sanction which itself contains the facts constituting the offence and the grounds of satisfaction, or
2. by adducing evidence aliunde to show that the facts were placed before the Sanctioning Authority and the satisfaction arrived at by it.
Any case instituted without a proper sanction must fail because this being a manifest difficulty in the prosecution, the entire proceedings are rendered void ab initio.
What the Court has to see is, whether or not the Sanctioning Authority at the time of giving sanction was aware of the facts constituting the offence and applied its mind to the same, and any subsequent fact, which may come into existence after the resolution granting Sanction has been passed, is wholly irrelevant;
The burden of proving that the requisite Sanction has been obtained rests on the Prosecution, and such burden includes proof that the Sanctioning Authority had given the Sanction in reference to the facts on which, the proposed prosecution was to be based and these facts might appear on the face of the Sanction or might be proved by extraneous evidence.
18 [Spl.C.C.155/2010-J]
31. On the other hand, the learned Public Prosecutor has contended that as the IPC offences alleged against the Accused-1 and 3 have no nexus with the discharge of public duty by them, there is no necessity of obtaining Sanction under Section 197 of the Cr.P.C. She has also contended that, however, the evidence of P.W.14- Sri.Jitmal and contents of Ex.P.27 to Ex.P.29 show that there is a valid Sanction to prosecute the Accused-1 and 3 for the offences alleged against them, the Competent Authority has issued Sanction as required under law by applying its mind on all the materials placed before it and that the said Sanction is a valid Sanction. In support of her Arguments, the learned Public Prosecutor has relied upon the following citations:
1. Sambhoo Nath Misra -Vs- State of Utthara Pradesh & Others [Judgment in Criminal Appeal No.318/1997 passed by Hon'ble Supreme Court of India];
2. Prakash Singh Badal & Another -Vs-
State of Punjab & Others [Judgment in Civil Appeal No.5636/2006 passed by Hon'ble Supreme Court of India];
3. Punjab State Warehousing Corporation
-Vs- Bhushan Chander & Another [Judgment in Criminal Appeal No. 159/2016 passed by Hon'ble Supreme Court of India].
32. Sum and substance of the principles laid down in the decisions of the above citations are as follows:
The essential requirement postulated for sanction to prosecute the Public Servant is that the offence alleged against the Public Servant 19 [Spl.C.C.155/2010-J] must have been done while acting or purporting to act in the discharge of his official duties. In such a situation, it postulates that the Public Servant's act is in furtherance of the performance of his official duties. If the act/omission is integral to performance of public duty, the Public Servant is entitled to the protection under Section 197(1) of the Cr.P.C., and without previous sanction, the Complaint/Charge against him for the alleged offence cannot be proceeded with in the trial.
Sanction of the appropriate Government or competent authority would be necessary to protect a Public Servant from needless harassment or prosecution. However, performance of Official duty under color of public authority cannot be camouflaged to commit crime. Public duty may provide him an opportunity to commit crime. The Court to proceed further in the trial or the enquiry, as the case may be, applies it mind and records finding that the crime and the official duty are not integrally connected;
It is not the official duty of the Public Servant to fabricate the fake record and misappropriate the public funds etc., in furtherance of or in the discharge of his official duties. The official capacity only enables him to fabricate the record or misappropriate the public fund etc. It does not mean that it is integrally connected or inseparably inter linked with the crime committed in the course of same transaction;
The protection given under Section 197 is to protect responsible public servants against the institution of possibly vexatious criminal proceedings for offences alleged to have been committed by them while they are acting or purporting to act as public servants. The policy of the legislature is to afford adequate protection to public servants to ensure that they are not prosecuted for anything done by them in the discharge of their official duties without reasonable cause, and if sanction is granted, to confer on the Government, if they choose to exercise it, complete control of the prosecution. This protection has certain limits and is available only when the alleged act done by the public servant is reasonably connected with the discharge of his official duty and is not merely a cloak for doing the objectionable act. If in doing his official duty, he acted in excess 20 [Spl.C.C.155/2010-J] of his duty, but there is a reasonable connection between the act and the performance of the official duty, the excess will not be a sufficient ground to deprive the public servant from the protection. The question is not as to the nature of the offence such as whether the alleged offence contained an element necessarily dependent upon the offender being a public servant, but whether it was committed by a public servant acting or purporting to act as such in the discharge of his official capacity. Before Section 197 can be invoked, it must be shown that the official concerned was accused of an offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duties. It is not the duty which requires examination so much as the act, because the act can be performed both in the discharge of the official duty as well as in dereliction of it. The act must fall within the scope and range of the official duties of the public servant concerned. It is the quality of the act which is important and the protection of this section is available if the act falls within the scope and range of his official duty. There cannot be any universal rule to determine whether there is a reasonable connection between the act done and the official duty, nor is it possible to lay down any such rule. This aspect makes it clear that the concept of Section 197 does not immediately get attracted on institution of the complaint case;
There has to be reasonable connection between the omission or commission and the discharge of official duty or the act committed was under
the colour of the office held by the official. If the acts, omission or commission, are totally align to the discharge of the official duty, question of invoking Section 197 Cr.P.C., does not arise.
33. This Court also noticed the following 2 decisions, which are relevant on the Point:
1. C.S.Krishnamurthy -Vs- State of Karnataka [Judgment of Supreme Court
21 [Spl.C.C.155/2010-J] of India, dated 29.03.2005 passed in Appeal (CRL.) 462/2005];
2. State through Inspector of Police, Andhra Pradesh -Vs- K.Narasimhachary [Judgment of Supreme Court of India passed on 07.10.2005 in Appeal (CRL.) 82/2004].
34. Sum and substance of the principles laid down in the decisions of the above citations are as follows:-
Ratio is Sanction Order should speak for itself and in case, the facts do not so appear, it should be proved by leading evidence that all the particulars were placed before the Sanctioning Authority for due application of mind. In case, the Sanction speaks for itself, then the satisfaction of the Sanctioning Authority is apparent by reading the Order;
Sanction Order issued by the State in discharge of its statutory functions in terms of Section 19 of the Act and authenticated in the manner specified in the Rules of Executive Business, is a Public Document within the meaning of Section 74 of the Indians Evidence Act, 1872;
A public document can be proved in terms of Sections 76 to 78 of the Indian Evidence Act, 1872. Thus, an Order of Valid Sanction can be proved by the Sanctioning Authority in 2 ways: either (1) by producing the original Sanction Order, which itself contains the facts constituting the offence and the grounds of satisfaction; or (2) by adducing evidence aliunde to show that the facts were placed before the Sanctioning Authority and the satisfaction arrived at by it.
22 [Spl.C.C.155/2010-J]
35. Keeping in view the above principles of law and the submissions made by both the parties, this Point is dealt with.
36. As per Section 19 of the PC Act, without previous Sanction of the Competent Authority, the Court shall not take cognizance of the offence punishable under Section 13 of the PC Act alleged to have been committed by a Public Servant. It is not in dispute that the Accused-1 and 3 are Public Servants working in the Central Government in the Income Tax Department, which comes under Department of Revenue, Government of India. As such, as per Section 19(a) of the PC Act, previous Sanction of the Central Government is necessary for prosecuting the Accused-1 and 3.
37. According to the Complainant, the President of India is the Competent Authority to remove the Accused-1 and 3 from service and as such, the President of India is the Competent Authority to accord Sanction to prosecute the Accused-1 and 3. P.W.14, who was working as Under Secretary, Central Board of Direct Taxes, Department of Revenue, Government of India, New Delhi, has also deposed that the President of India is the Competent Authority to remove the Accused-1 and 3 from the service and that under the Government of India (Allocation of Business) Rules, Ministry of Revenue is the Competent Authority to issue Sanction. Ex.P.27 is the Copy of the said Rules (by oversight, marked as Ex.P.28). Contents of Ex.P.27 show that the Department of Revenue comes 23 [Spl.C.C.155/2010-J] under the Ministry of Finance of the Government of India and that the President of India has empowered the said Ministry to do the business of Government of India by virtue of Article-77(3) of the Constitution of India. As such, contents of Ex.P.27 fortify the evidence of P.W.14. The Accused-1 and 3 have not disputed the said evidence of P.W.14. There is no reason to disbelieve the said evidence of P.W.14, which is well supported by the contents of Ex.P.27. As such, it is clear that the Ministry of Finance of the Government of India, which includes Department of Revenue also, is the Competent Authority to issue Sanction to prosecute the Accused-1 and 3.
38. P.W.14 has further deposed that his office received Copies of FIR, Statements of witnesses and documents collected during the investigation from the DGIT (Investigation) seeking Sanction to prosecute the Accused-1 and 3 and that his office sent the File with the entire documents to the Ministry of Revenue and that those records were placed before the Finance Minister, Finance Minister perused records, applied his mind with due diligence and ordered to issue Sanction to prosecute the Accused-1 and 3. He has further deposed that after receiving that Order, he authenticated the said Order on behalf of the President of India and issued Sanction Order as per the Notification Dated 03.11.1958 issued by the Ministry of Home Affairs as per Ex.P.28 (by oversight, marked as Ex.P.27). He has identified Ex.P.29 as the said Sanction Order and Ex.P.29(a) as his Signature on that 24 [Spl.C.C.155/2010-J] document. Ex.P.28 is the Notification issued by the Ministry of Home Affairs, which authorizes the Under Secretary to the Government of India to authenticate the Orders and Instruments made and executed in the name of the President of India by the signature of the Under Secretary to the Government of India. Ex.P.29, being the original Sanction Order issued and authenticated by the Competent Authority in accordance with the Rules, is a public document within the meaning of Section 74 of the Indian Evidence Act, 1872. As such, by virtue of Section 76 to 78 of the Indian Evidence Act, 1872, this document may be proved by production of the said document itself. Accordingly, it is proved by production through Competent Authority. Contents of Ex.P.29 show that after fully and carefully examining the Copies of FIR, Statement of witnesses and the documents collected during investigation, the Ministry of Finance, which is the Competent Authority to issue Sanction Order, has passed Sanction Order in the name of the President of India to prosecute the Accused-1 and 3 for the offence punishable under Sections 120-B, 218 and 420 of the IPC and also Sections 13(2) r/w. 13(1)(d) of the PC Act and that the said Order has been authenticated by P.W.14, who was the Under Secretary to the Government of India at that time. The said Order further shows that the Sanctioning Authority has applied its mind on all the materials placed before it and that, with a well reasoned and detailed Speaking Order, has formed an Opinion that it is a fit case to prosecute the Accused-1 and 3 for the offence 25 [Spl.C.C.155/2010-J] punishable under Sections 120-B, 218 and 420 of the IPC and also Sections 13(2) r/w. 13(1)(d) of the PC Act. As such, contents of Ex.P.29, which is the original Sanction Order, corroborate the evidence of P.W.14, which fully supports the contention of the Complainant that the Competent Authority has issued a valid Sanction Order to prosecute the Accused-1 and 3 in accordance with law.
39. In the Cross-examination, P.W.14 has stated that I.O. did not record his Statement, Ministry of Finance drafted the Sanction Order, he was not present personally when the said draft was prepared, Ministry of Finance sent the final Sanction Order to him through DGIT and that he does not remember the facts of the case now. He has denied that he has no authority to authenticate the Sanction Order and that it is not issued by the Competent Authority. He has also denied that file was not sent to his office from DGIT and that he does not know that the person, who prepared the draft, is not familiar with Income Tax Law. As P.W.14 has just authenticated the Sanction Order, which was passed by the Ministry of Finance on behalf of the President of India as per Notification-Ex.P.28 in his official capacity, the said answers given by him do not in any way destroy the sanctity of the Sanction Order, which is in accordance with law. P.W.14 has stood well in the test of Cross-Examination and there is no reason to disbelieve his evidence, which is well fortified by Ex.P.27 to Ex.P.29. The said evidence clearly shows that the Competent Authority has applied its mind on all the facts 26 [Spl.C.C.155/2010-J] and materials collected during investigation and that after satisfying about prima facie case against the Accused-1 and 3, it has issued Sanction Order in accordance with law to prosecute the Accused-1 and 3 for the offence punishable under Sections 13(2) r/w. 13(1)(d) of the PC Act as well as Sections 120-B, 218 and 420 of the IPC.
40. As per Section 197(1) of the Cr.P.C., without previous Sanction of the Competent Authority, the Court shall not take cognizance of any offence alleged to have been committed by a Public Servant while acting or purporting to act in the discharge of his official duty. The offences alleged to have been committed by the Accused-1 and 3 are punishable under Section 120-B, 218 and 420 of the IPC. Acts of commission or omission alleged to have been done by the Accused-1 and 3 relating to the offence punishable under Sections 120-B, 218 and 420 of the IPC have no connection with the discharge of official duties by the Accused-1 and 3 and those acts are totally alien to discharge of their official duties. As such, Sanction under Section 197 of the Cr.P.C., is not necessary to prosecute the Accused-1 and 3 for those offences.
41. However, Ex.P.29 shows Sanction to prosecute the Accused-1 and 3 for the offence punishable under Sections 120-B, 218 and 420 of the IPC, which indicates grant of Sanction within the meaning of Section 197(1) of the Cr.P.C., also. Though it is not specifically mentioned in Ex.P.29 about issue of Sanction Order as per Section 27 [Spl.C.C.155/2010-J] 197(1) of the Cr.P.C., it is specifically mentioned in that Order that the said Sanction is for the offence punishable under Sections 120-B, 218 and 420 of the IPC also. As the Sanctioning Authority in respect of the offences relating to the PC Act as well as the IPC is one and the same and as the Sanction Order shows issue of Sanction to the IPC offences also, merely because of non-mentioning of Section 197(1) of the Cr.P.C., in the said Order, it cannot be said that the said Sanction is not in respect of the IPC offences as required under Section 197(1) of the Cr.P.C.
42. On considering all the above facts, evidence and position of law, coupled with contents of Ex.P.27 to Ex.P.29, it is clear that the Competent Authority has issued Sanction Order in accordance with Law, by considering all the relevant materials and applying its mind on those materials, to prosecute the Accused-1 and 3 for the offence punishable under Sections 120-B, 218 and 420 of the IPC and also Sections 13(2) r/w. Section 13(1)(d) of the PC Act. For all these reasons, Point-1 is answered in the Affirmative.
POINTS-2 TO 5
43. As all these Points are interlinked to each other, in order to avoid repetition of facts and evidence, it is just, proper and convenient to determine all these Points by considering together.
28 [Spl.C.C.155/2010-J]
44. The learned Public Prosecutor has argued that under a Criminal Conspiracy between the Accused-1 to 3 to Cheat the Income Tax Department, by returning a key document i.e., the document shown at Sl.No.13 of Annexure-I by abusing their official position, fraudulently, dishonestly and that without considering that document for assessment of tax liability, the Accused-1 and 3 have caused huge financial loss to the Income Tax Department and corresponding gain to the Accused-2 and that thereby, they are guilty of the offences charged against them. On the other hand, the learned Advocates appearing on behalf of the Accused-1 and 3 have argued denying the contention of the Complainant and contended that the Complainant has failed to prove his case. On considering the rival contentions of both the parties, it appears just, proper and convenient to determine these Points under the following Heads:
1. Key Document;
2. Return of Disputed Document;
3. Fraud & Dishonesty in Returning the Disputed Document:
Necessity of Retention;
Violation of Rules, Practice and Procedure; Fraudulent and Dishonest Act:
• Consideration of the Disputed Document for the Assessment Year 2004-2005;
• Consideration of the Disputed Document by the ACIT, Central Range-II or the DCIT, Central Circle-II(3);
29 [Spl.C.C.155/2010-J] • Consideration of the Disputed Document for the Assessment Years 2005-2006 to 2007-
2008.
Loss/Gain due to return of the Disputed Document.
4. Additional Grounds of Law urged by the Accused-1;
5. Additional Grounds of Law urged by the Accused-3;
6. Conclusion.
1. Key Document
45. 'Key document' of this dispute is the document shown at Sl.No.13 of Annexure-I. As observed above, the said document was seized from the Locker placed in the Chamber of the Accused-2 during Survey Proceedings conducted by the Accused-1 under Section 133-A of the IT Act on 29.08.2006. However, the Complainant could not secure that document during investigation or trial as it was not available.
46. At Page-37 of Ex.P.16, the document at Sl.No.13 of Annexure-I is shown as "13-one bunch of Sheets showing Interest Calculation".
47. During Assessment Proceedings, on 05.09.2006, the Accused-2 appeared before the Accused-1 and sought Copies of the documents impounded during Search for the purpose of explaining the nature of transactions recorded 30 [Spl.C.C.155/2010-J] in those documents and Copies of the said documents were given to him by the Accused-1 on that day. These proceedings are recorded by the Accused-1 in Ex.P.16 as per Ex.P.16(c). The said document referred to therein is none other than the document at Sl.No.13 of Annexure-I. In the said Proceedings, the said document is referred to as 'Fax Sheet'. It is also not in dispute that on 29.03.2007, the Accused-1 returned that document to the Assessee. The Accused-1 has recorded the said fact in his Proceedings at Ex.P.16(b) as per Ex.P.16(b)(1). In this Proceedings also, the said document is referred to as 'Fax Copies'.
48. In the Cross-Examination of P.W.10 made on behalf of the Accused-1, P.W.10 admitted that the Accused-1 submitted Interim Survey Report dated 06.09.2006 as per Ex.P.16(d). The Accused-1 got marked this document on his behalf through P.W.10. In the last but one Para of the said Report i.e., at Page-45 of Ex.P.16, the Accused-1 has stated as follows:
"In the course of survey, certain documents were found in the safe placed in the Chamber of the Chairman reflecting the Statement of Account as on 30.09.2003. This document is a fax sheet received by the assessee from M/s.Binco Constructions showing opening outstanding amount of Rs.10,20,00,000/- and closing balance of Rs.9,24,83,086/- during August and September 2003. Sri.S.Narasaraju 31 [Spl.C.C.155/2010-J] was questioned on this matter for which he stated that he does not remember the exact transactions and stated that he would explain the details of the transactions on 11.09.2006. A copy of the fax sheets was given to the Assessee for his comments. Further investigation in this matter is in progress."
(Underlined by this Court.) Contents of the above Paragraph in Ex.P.16(d) corroborate the entries in Ex.P.16(b), Ex.P.16(b)(1) and Ex.P.16(c), referred to above.
49. Ex.P.17(b) is the Final Survey Report submitted by the Accused-1 to the Accused-3 on 12.11.2007. Ex.P.17(c) is the Covering Letter sent to the Accused-3 along with Ex.P.17(b) by the Accused-1. In the last but one Para of that document, the Accused-1 has referred to about the impounded documents shown in Annexures-I, II & III and return of those documents to the Assessee. In that Para, relevant portion mentioned by the Accused-1 is as under:
"Out of annexure 1 loose sheet containing one fax note at Sl.No.11 was also released after verifications."
As per Annexure-I, the document at Sl.No.11 is not fax sheet, but, it is a Long Note Book Register containing details of payments made. It appears that in Ex.P.17(c), the Accused-1 has mentioned the said document as 32 [Spl.C.C.155/2010-J] 'Sl.No.11' instead of 'Sl.No.13' by oversight or due to typographical error. It is not disputed by the Accused-1 and 3 that the document referred to in Ex.P.17(c) as 'Sl.No.11' is nothing but Sl.No.13. In the last but one Para of Ex.P.17(b) i.e., at Page-28 of Ex.P.17, the Accused-1 has stated as follows:
"In the course of survey, certain documents were found in the Chamber of Chairman reflecting the statement of account as on 30.09.2003. This document is a fax sheet showing some opening balance of Rs.10.20 Crores and closing balance of Rs.9.24 Crores. Enquiries revealed that these represented transactions between M/s.Binco Constructions, who are building contractors for M/s.Children Education Society and the Assessee."
(Underlined by this Court.) It is not in dispute that the said 'Fax Sheet' referred to in the said Paragraph is the document at Sl.No.13 of Annexure-I.
50. Ex.P.1(u) is the Explanation given by the Accused-1 to the ACIT-Sri.Ajit Korde on 04.04.2008. In this Explanation, the Accused-1 has referred to about the said document at Sl.No.13 of Annexure-I as under:
"In the course of survey conducted in the above case on 29.08.2006, in addition to other 33 [Spl.C.C.155/2010-J] documents, one bunch containing 5-6 Pages was found. In this bunch, one fax message was also attached".
(Underlined by this Court.)
51. P.W.8-Smt.Shakunthala is the daughter of the Accused-2 and she was looking after the Accounts and Admissions relating to the CES, when the survey was conducted. However, when she gave evidence before this Court on 8.10.2015, she has stated that she is the Administrator of the CES. During Survey Proceedings, the Accused-1 recorded her Sworn Statement after administering the oath. While Cross-Examining P.W.1, the Accused-1 got marked that Statement as per Ex.D.6 on his behalf. P.W.8 has also admitted that her Statement was recorded as per Ex.D.6 during Survey Proceedings, which bears her signatures also as Ex.D.6(a), Ex.D.6(a-1) to Ex.D.6(a-10). She has also identified Ex.P.18 as her Statement recorded by the Income Tax Authorities while taking Books and Accounts from her office during Search. At Page-7 of Ex.D.6, the questions put by the Accused-1 to P.W.8 and the answers given by P.W.8 to those questions relating to the document at Sl.No.13 of Annexure-I are as follows:
"Question-11: I am showing you bunch of loose papers found from the locker of your father where some calculation of interest and loan is mentioned. Kindly go through the loose 34 [Spl.C.C.155/2010-J] sheets and offer your comments about the nature and source of receipt/payment.
Answer: It is true that these papers are showing the principal amount and calculation of interest at different rates at different period. But, I do not know whether it is loan taken or given. My father will be in a better position to answer your query.
Question-12: I am showing loose bunch of papers which contains fax received from Binco Constructions at Page No.2 of this bundle. The net receivable principal as on 30.09.2003 is shown as Rs.9 Crores and interest receivable is Rs.24,83,086/-. Kindly go through this paper and comment on the contents.
Answer: This Page shows opening balance as on 31.08.2003 of Rs.10,20,00,000/-. The interest is payable at 2.5%. There is a receipt mentioned on this paper on different dates during the month of September 2003. The net receivable under the head 'Interest and Principal' has been mentioned by you in the question. There are two receipts dated 7th and 8th October 2003 of Rs.5,00,000/- each.
Question-13: I am showing other Pages of this bundle showing receipt, payment and 35 [Spl.C.C.155/2010-J] interest calculation along with the principal for various months. Kindly explain the nature of these entries and sources of the same.
Answer: It is true that these papers have been found in the locker available in my father's Chamber and hence he will be in a better position to explain the nature and sources of the same."
(Underlined by this Court.)
52. From the above evidence, it is clear that the said document at Sl.No.13 of Annexure-I was Fax Message Sheets received by the Assessee i.e., the CES from M/s.Binco Constructions and that the said Message was showing Statement of Account as on 30.09.2003. It is also clear from the above evidence that the said Statement was showing opening outstanding balance of Rs.10,20,00,000/- as on 31.08.2003, Interest payable at 2.5%, Receipt on different dates in the month of September 2003 including Receipt of Rs.5 Lakhs each on 07.10.2003 and 08.10.2003, the net Principal amount receivable as on 30.09.2003 was Rs.9,00,00,000/-, Interest receivable as on that day was Rs.24,83,086/- and that net receivable amount under the Head-'Interest and Principal' i.e., closing balance was Rs.9,24,83,086/-.
53. But, P.W.11, who is the Managing Director of M/s.Binco Constructions, has deposed that he has no Money Lending Business and that the Accused-2 had not 36 [Spl.C.C.155/2010-J] borrowed any money from him. He has also deposed that he does not know about the Survey conducted by the Income Tax Department in respect of the CES, Income Tax Authorities did not enquire him and that they did not record his Statement. He has also stated that no Fax Message was sent from his Company to the CES, the Accused-2 was used to sit in his office regularly and that he might have sent that Fax Message. As this witness turned hostile, the learned Public Prosecutor Cross- examined him by taking permission from the Court. In the Cross-Examination, he has stated that he does not remember now that the Income Tax Authorities enquired him and that they recorded his Statement. He has stated that he does not remember now that Ex.D.5 is his Statement. But, he did not deny the fact that Ex.D.5 is his Sworn Statement recorded by the Accused-1. However, by relying upon Ex.D.5, the Accused-1 got marked that document on his behalf through P.W.1 during Cross- Examination. This document was retrieved by the GEQD as per his Report-Ex.P.41 from the Hard Disc-M.O.1, which was in the Computer used by the Accused-1 for his official purpose. As such, there is no impediment to rely upon Ex.D.5.
54. Relevant portion of Ex.D.5, which contains the questions put by the Accused-1 to P.W.11 and the answers given by P.W.11 to those questions, is as under:
"Question-4: I am showing you a fax Letter found in the premises of M/s.Children 37 [Spl.C.C.155/2010-J] Education Society. It is seen from the fax that the fax has been sent from M/s.Binco Constructions during October 2003 to telefax No.6548858. Please go through the fax sheet and explain the contents of the sheet.
Answer: I admit that the fax has been sent from M/s.Binco Constructions during October 2003. The phone number mentioned is 3303186. This phone number belongs to our old office at Rajajinagar. After that we have shifted the office to Rajaram Mohan Roy Road. The fax is sent to M/s.Children Education Society Ph.No.6548858. I do not know who has sent this fax. The transactions shown in the sheet does not belong to me.
Question-5: The fax is sent from your office. Therefore, it is obvious that you or your staff or some other person known to you might have sent this fax. Please explain who has sent this fax.
Answer: Mr.Narasaraju is my personal friend for the last 20 years and I have done some building work for his educational trust. In that connection, he himself and his staff were coming to my office and sitting always in my office. Either Mr.Narasaraju or his staff might have done some calculation and sent to their 38 [Spl.C.C.155/2010-J] office, which I cannot say. It is true fact that the transactions do not belong to me. The fax is not sent by me.
Question-6: From your answer above, it is clear that either you or any person from your office has not sent this fax. Please state whether it is possible for any other person other than Narasaraju and his office people to send fax from your office.
Answer: Our office people have not sent this fax. It is only Narasaraju or his office people might have sent the fax. No other person would have sent this fax.
Question-7: Please state whether you have given any loan to Sri.Narasaraju at any time.
Answer: No. I have not given any loan to Sri.Narasaraju except the following items: The exact details shall be furnished shortly. However, I will be furnishing account copy for the period from 01.04.2002 to 31.03.2006 of Sri.Narasaraju, Children Education Society and Oxford Group of Institutions in the books of M/s.Binco Constructions Pvt. Ltd., Bamdev Nayak and Neeladri Enterprises which are assessed to tax wherein I have substantial 39 [Spl.C.C.155/2010-J] interest. I had given approximately Rs.2 Crores.
Sl. Date Amount Remarks
No.
1. March, 2004 Around Rs.1.2 Repaid during
Crores. July-August,
2004.
2. 20.12.2004 Rs.2.5 Crores Repaid on
10.03.2005.
3. 10.01.2005 Rs.0.5 Crores Repaid on
10.03.2005.
4. 30.03.2005 Rs.0.6 Crores Repaid - date
will be
furnished
later.
Question-8: Have you received any loan or money from Sri.Narasaraju, Children Education Society, Oxford Group of Institutions?
Answer: I have not received any loan from Sri.Narasaraju or their Group but I have received Rs.1.0 Crores on 23.8.2006 and Rs.50 Lakhs on 26.08.2006 from Sri.Narasaraju for selling my property at Nandidurga Road, Jayamahal Extension, Bengaluru.
Question-9: Please verify from your accounts what is the total amount of loan given to Sri.Narasaraju both in cash and in cheque and give the details of loans advanced and interest collected for the period from 1.4.2002 to 31.3.2006 and furnish the details.
40 [Spl.C.C.155/2010-J] Answer: I will go through my accounts and furnish the details. However, I am very sure I have not given any loan by way of cash. I request you to give time up to 11.9.2006 to furnish all the details."
As per the above answers given by P.W.11, though the disputed Fax Message was sent from the Office of M/s.Binco Constructions to the CES, P.W.11 has claimed that the said Fax Message was not sent by him or any of his staff, the transactions shown in that Fax Message do not belong to him and that the Accused-2 or his staff might have sent that Fax Message from his (P.W.11) Office to the CES. Though P.W.11 has stated in his evidence that he is not doing any Money Lending Business and that the Accused-2 had not borrowed any money from him, his own Statement in Ex.D.5 shows that from March 2004 onwards, he had lent money to the Accused-2. This inconsistent and contradictory stand of P.W.11, showing ignorance by him about the Survey conducted in respect of the CES and contents of his Statement recorded by the Accused-1 during Survey Proceedings, show that P.W.11 is suppressing real state of affairs and as such, it is not safe to rely upon his evidence.
55. Though the disputed Fax Message was seized from the Locker in the Chamber of the Accused-2, the Accused-2 did not come forward to give any explanation about it. However, during the course of Cross-Examination 41 [Spl.C.C.155/2010-J] of P.W.1, the Accused-1 got marked Ex.D.7 and Ex.D.8, which are the Sworn Statements of the Accused-2 recorded by the Accused-1 during Survey Proceedings. As the Accused-1 got marked these documents on his behalf by relying upon those documents, there is no impediment to consider those documents. Among Ex.D.7 and Ex.D.8, relevant portion in Ex.D.8, consisting of questions put by the Accused-1 to the Accused-2 and the answers given by the Accused-2 to those questions, is as under:
"Question-1: I am showing you a fax letter found in the safe in your chamber. Please go through this letter and explain the contents and nature of transactions recorded in this sheet.
Answer: This paper belongs to Sri.Bamdev Nayak of Binco Constructions, who is a very good friend of mine for the past 20 years, who sometimes in need of hour provided me funds and also has undertaken construction of several building by providing labor contract.
He practically is in touch with me and whenever he is in Bangalore and not away on his works scattered in Karnataka, he will be visiting my office, spends time with me and also conducts business from my premises. This statement of account which is identified by my daughter at the time of survey by putting the seal and initial, I admit, was found
42 [Spl.C.C.155/2010-J] in my premises as suggested by you in the question. I have to verify the detail whether the accounting transactions which is shown in this paper relate to me i.e., Sri.Bamdev Nayak had with me or with others. Please give me the Photostat copies of the documents identified by my daughter numbered from 1 to 12 for me to peruse my records whether any of these transactions relate to me at all. I will also contact Sri.Bamdev Nayak to throw light on the notings in these papers belonging to him found in my premises.
Question-2: Please go this sheet and state whether the transaction shown in this sheet belongs to you or not.
Answer: I have to verify and tell you."
As per the above answers also, the disputed Fax Message being a Statement of Account was sent by P.W.11 on behalf of M/s.Binco Constructions. However, as per the above Statement, the Accused-2 has claimed that the said Statement of Account belongs to P.W.11 and that he wanted time to verify the details of the transactions mentioned therein. But, as per the said Statement, the Accused-2 has admitted that P.W.11 was providing funds to him in need of hour. This Statement of the Accused-2 also shows that P.W.11 has suppressed the real state of affairs.
43 [Spl.C.C.155/2010-J]
56. From the above evidence, though it is clear that the said Fax Message was seized from the Locker kept in the Chamber of the Accused-2 during Survey Proceedings, P.W.11 has claimed that it belonged to the Accused-2 and whereas, the Accused-2 has claimed that it belonged to P.W.11. But, relevant portion of Section 292C of the IT Act, which was amended through the Finance Act, 2008 with retrospective effect from 01.06.2002, reads as under:
"292C. Presumption as to assets, books of account, etc.:-Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search under Section 132 [or Survey under Section 133A], it may, in any proceeding under this Act, be presumed-
1. that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person;
2. that the contents of such books of account and other documents are true."
As such, by virtue of the above provision, as the said Fax Message Sheet containing Statement of Account was found in the possession of the Accused-2, it has to be presumed that the said document belongs to the Accused-2 and that 44 [Spl.C.C.155/2010-J] the contents of that document are also true. There is nothing to rebut the said presumption available to the Complainant by virtue of Section 292C of the IT Act.
57. The learned Advocate appearing on behalf of the Accused-1 has contended that as none of the witnesses examined on behalf of the Complainant have spoken to about the contents of the documents relied upon by the Complainant, contents of those documents are not proved and that as such, placing reliance on those documents does not arise. In support of his Arguments, the learned Counsel appearing on behalf of the Accused-1 has relied upon a decision in the case of N.A.Suryanarayana @ Suri -Vs- State of Inspector of Police, CBI/SPE/Bengaluru, reported in 2015(1) KCCR 898. The relevant portion relied upon by the learned Counsel is at Para-81, which reads as under:
"81. In criminal cases, statements of material witnesses have to be recorded without undue delay. The author of Ex.P.10-Krishnakumar is not examined. Mere production of a document and getting it marked is not sufficient and the same will have to be proved to corroborate the contents of the same. Who identified the second floor and the trap laying table and other two tables in order to enable Krishnakumar to prepare the Sketch is not forthcoming. Either Ramnath or Balachandran or the Inspector himself should have been 45 [Spl.C.C.155/2010-J] present at the time of the alleged visit of Krishnakumar to the hotel to draft the Sketch."
In that case, Ex.P.10 was a Sketch said to have been prepared by the Assistant Engineer showing the location of trap laid by the CBI Officers on the Accused of that case. In that case, Author of Ex.P.10 was not examined. Contents of Ex.P.10 were glaringly contradicted to the evidence given by P.W.1 and P.W.2, who are the eyewitnesses to the trap. By ignoring those contradictions, the Trial Court has relied upon Ex.P.10 in the absence of any other evidence to ascertain the location of the trap. Under such circumstances, the Hon'ble High Court of Karnataka has observed that much credence cannot be attached to Ex.P.10 in the absence of the evidence of its Author.
58. As per Section 59 of the Indian Evidence Act, 1872, oral evidence is prohibited regarding proof of contents of documents. As per Section 61 of the said Act, contents of the documents may be proved either by primary or by secondary evidence. As per Section 62 of the said Act, primary evidence means the document itself produced for the inspection of the Court.
59. In the case on hand, the documents referred to under this Point are Ex.P.1, Ex.P.1(u), Ex.P.16, Ex.P.16(b), Ex.P.16(b)(1), Ex.P.16(c), Ex.P.16(d), Ex.P.17, Ex.P.17(b), Ex.P.17(c), Ex.D.5, Ex.D.6, Ex.D.6(a), Ex.D.7 and Ex.D.8. As observed above, Ex.P.1 is the File relating to retention 46 [Spl.C.C.155/2010-J] of impounded documents by the Accused-1. Ex.P.1(u) is the Explanation given by the Accused-1 to the ACIT. Ex.P.16 is the File relating to Survey Proceedings conducted by the Accused-1. Ex.P.16(b), Ex.P.16(b)(1) and Ex.P.16(c) are the Proceedings noted by the Accused- 1 in Ex.P.16. Ex.P.16(d) is the Interim Survey Report submitted by the Accused-1 to his Higher Authorities. Ex.P.17 is the File containing Monthly Report on Surveys maintained in the Office of the ACIT. Ex.P.17(b) is the Final Survey Report submitted by the Accused-1 through Covering Letter-Ex.P.17(c). The Accused-1 has not disputed the Survey Proceedings, impounding of documents, return of the disputed document and also submission of Interim and Final Survey Reports as well as Explanation given by him to the ACIT. P.W.1 is the Successor-in-Office to the Accused-1. He has dealt with the Files-Ex.P.1, Ex.P.16 and Ex.P.17. P.W.10 being the CIT was the Higher Officer to P.W.1 as well as the Accused-1. P.W.1 and P.W.10 as well as the Accused-1 have made official correspondences referred to in Ex.P.1. In his evidence, P.W.1 has spoken to about the correspondences made in Ex.P.1 including Ex.P.1(u), Ex.P.16, Ex.P.16(b), Ex.P.16(b)(1), Ex.P.16(c), Ex.P.16(d), Ex.P.17, Ex.P.17(b), Ex.P.17(c). So also, P.W.10 has spoken to about Ex.P.1(u) and other correspondences referred to in Ex.P.1. The Accused-1 and 3 have not disputed the genuineness of all those documents. Thus, by producing and speaking through all those documents, P.W.1 and P.W.10 have produced primary evidence to 47 [Spl.C.C.155/2010-J] prove the contents of all those documents. The Accused-1 himself has got marked Ex.D.5 to Ex.D.8 on his behalf to rely upon the contents of those documents. As such, there is no impediment to rely upon the contents of those documents also. Thus, the facts and circumstances of the case on hand are entirely different from those of the decision relied upon by the Accused-1. Hence, the said decision is of no assistance to the Accused-1 and as such, it is not fit to accept the argument of the learned Advocate appearing on behalf of the Accused-1 that reliance cannot be placed on those documents.
60. On considering all the facts, circumstances and the evidence available on record and also the unrebutted presumption available on behalf of the Complainant, as observed above, it is clear that the document at Sl.No.13 of Annexure-I (for short, 'the Disputed Document') was Fax Message Sheets received by the CES from M/s.Binco Constructions showing:
Statement of Account as on 30.09.2003, consisting of Receipts, Payments, Rate of Interest, Interest Calculation along with the Principal for various months;
Opening Outstanding Balance of Rs.10,20,00,000/- as on 31.08.2003, Interest payable at 2.5%, Receipt on different dates in the month of September 2003 including Receipt of Rs.5,00,000/- each on 07.10.2003 and 08.10.2003;
Net Principal amount of Rs.9,00,00,000/-, Interest of Rs.24,83,086/- and net 48 [Spl.C.C.155/2010-J] receivable amount under the Head-
'Principal and Interest' i.e., Closing Balance of Rs.9,24,83,086/- receivable as on 30.09.2003.
2. Return Of Disputed Document
61. As observed above, it is not in dispute that the Accused-1 returned the Disputed Document to the Assessee on 29.03.2007. It is alleged by the Complainant in the Charge Sheet that the Accused-1 and 3 returned the Disputed Document to the Assessee. In the Charge framed in this case also, it is alleged that the Accused-1 and 3 returned the Disputed Document. As such, now it has to be seen as to whether the Accused-3 also returned the Disputed Document as alleged or his role, if any, in returning of the said document.
62. None of the witnesses examined on behalf of the Complainant has stated that the Accused-3 also returned the Disputed Document along with the Accused-1 to the Assessee. Those witnesses have also not whispered the role of the Accused-3 in returning the Disputed Document on 29.03.2007. There is no document or other evidence to show that the Accused-3 also returned the Disputed Document to the Assessee. On the other hand, the Accused-1 has admitted that he returned the Disputed Document on 29.03.2007. As such, it is clear that the Accused-1 alone returned the Disputed Document.
49 [Spl.C.C.155/2010-J]
63. However, it is not in dispute that the ACIT called explanation on 17.03.2008 as per Ex.P.1(t) from the Accused-1 about returning of the Disputed Document and that the Accused-1 submitted his Reply as per Ex.P.1(u). So also, it is not in dispute that P.W.10 called for explanation from the Accused-3 as per Ex.P.26 about returning of said document and that the Accused-3 submitted his Reply as per Ex.P.1(x). P.W.1 as well as P.W.10 have spoken to about Ex.P.1(t), Ex.P.1(u), Ex.P.26 and Ex.P.1(x). In Ex.P.1(u), the Accused-1 has stated as follows:
"......Later on detailed scrutiny of the papers were undertaken. The Assessee and his representatives were heard. It was found that the notings in the papers had no relevance to the activities of the Assessee as no names were written except some figures which could not be linked to the Assessee's business activities. The papers were taken to the immediate superior Authority, the Addl. Commissioner of Income Tax, Central Range-1, Bangalore. The Assessee and his representatives also appeared before the Addl. Commissioner of Income Tax and was heard. Thereafter to take further precautions, the Addl. Commissioner of Income Tax directed to hand over the papers to Addl. Commissioner of Income Tax, Central Range-2 as to whether or not the papers were relevant to the 50 [Spl.C.C.155/2010-J] Assessment of M/s.Binco Construction Group assessed in that Range. After 2 days, the DCIT, Central Circle-2(3) returned the papers implying thereby that the said papers were not relevant to the groups of cases assessed in their Range also. In view of sequence of these facts, it was decided to release the bunch of papers and the matter was again discussed with the Addl. Commissioner of Income-tax, Central Range-I. After getting his approval, the same was released to the assessee."
As per the said Letter, according to the Accused-1, he returned the Disputed Document, after discussing with the Accused-3 by taking the Assessee and his representatives also to the Accused-3 and after getting his approval. But, there is nothing in Ex.P.1, Ex.P.16 and Ex.P.17 about getting of such approval in writing.
64. In Ex.P.1(x), though the Accused-3 has admitted about the discussion made by the Accused-1 with him relating to the Disputed Document, he has stated that no official approval was given by him for return of the document. In that document, the Accused-3 has stated as follows:
"There was no approval given by me officially before the release of the document to the then DCIT, CC-1(3), Bengaluru as mentioned by him in his reply dated 4.4.2008. It is a fact 51 [Spl.C.C.155/2010-J] that he discussed the issue with me and informed me that the notings in the paper had no relevance to the activities of the assessee. The entries pertain to M/s.Binco Construction Co. which was then assessed in CC2(3), Bengaluru and since assessee is pressing hard for release of that particular document for some urgent business need, so it can be released. I suggested him to take action as per law after verifying the contents of the papers. I also suggested him to keep the certified copy of the document, to be in the safer side. It should be released only after completion of the assessment proceeding."
(Underlined by this Court.) In this Letter, the Accused-3 has not denied the contention of the Accused-1 that Assessee and his representatives had come to the Accused-3 for discussion. As per the above Letter, the Accused-1 discussed with the Accused-3 about returning of the Disputed Document to the Assessee and that the Accused-3 suggested the Accused-1 to take action as per law after verifying the contents of the document, to return the document after completion of Assessment Proceedings and also to keep Copy of the Disputed Document to be on safer side.
65. From the above evidence, it is clear that though the Accused-3 did not return the Disputed Document 52 [Spl.C.C.155/2010-J] personally to the Assessee on 29.03.2007 as alleged by the Complainant, before returning the document, he discussed about that document with the Accused-1, the Assessee and his representatives, he suggested the Accused-1 to take action as per law after verifying the contents of the Disputed Document and to return that document after completion of the Assessment Proceedings by keeping a Copy of it.
3. Fraud & Dishonesty In Returning The Disputed Document
a) Necessity of Retention:
66. As observed above, the Disputed Document was relating to the transactions of the Financial Year 2003-
2004 i.e., for the Assessment Year 2004-2005. As such, the said Document was necessary to the Accused-1 to assess the Income Tax of the CES for the Assessment Year 2004-2005. As observed above, it is not in dispute that for retaining the Disputed Document and other impounded documents shown in Annexures-I to III beyond 10 days, the Accused-1 took permission under Section 133(A)(3) of the IT Act from his Superiors through the Accused-3. While seeking such permission through Ex.P.1(a) on 31.08.2006, the Accused-1 has contended that the said documents were required for further examination as the Assessee had not maintained proper Books of Accounts for the period from 01.04.2006 onwards. The Accused-3 also made recommendation for permission to retention on the same 53 [Spl.C.C.155/2010-J] ground. By accepting the said ground and recommendation, permission was granted to the Accused- 1 to retain those documents up to 31.03.2007.
67. As observed above, on 13.10.2006, when the Accused-1 was on leave, P.W.5 returned the impounded documents shown in Annexures-II and III to the Assessee by obtaining Xerox Copies of the same along with Acknowledgement from the Assessee. As observed above, it is not in dispute that the Accused-1 passed Assessment Order as per Ex.D.9 on 22.12.2006 in respect of the Income Tax Return filed by the CES for the Assessment Year 2004-2005.
68. Even after passing of that Assessment Order, on 26.03.2007, the Accused-1 sought permission to retain the impounded documents shown in Annexure-I including the Disputed Document up to 31.12.2007 through Letter- Ex.P.1(e). In Ex.P.1(e), the Accused-1 has shown reason for such retention as under:
"The documents as per Annexure 2 and 3 were returned to the assessee on 13.10.2006 after obtaining Xerox Copies of the documents. The assessee in the course of post survey was requested to produce books of accounts for the F.Y. 2005-06 and 2006-07. So for, the assessee has not produced the required books of accounts. The assessee was also required to explain the nature of transactions recorded 54 [Spl.C.C.155/2010-J] in certain documents found at the time of survey. The assessee has not furnished any details with regard to these documents. The nature of transactions will have to be examined in the course of assessment proceedings pending for the Asst. Years 2005-06 to 2006- 07 and also for the Asst. Year 2007-08. It is therefore requested that approval may be granted to retain the impounded documents as per annexure 1 for a further period up to 31.12.2007."
In Ex.P.1(f), the Accused-3 also recommended for permission to retain the Disputed Document by agreeing with the reason given by the Accused-1. By accepting the said recommendation of the Accused-3 and reason shown by the Accused-1, permission was granted to the Accused- 1 to retain those documents up to 31.12.2007. Thus, the Accused-1 was in need of the Disputed Document for examination relating to the Assessment Proceedings of the CES pending for the Assessment Years 2005-2006 to 2007-2008 also.
69. As observed above, in the Disputed Document, there was reference about the Statement of Account relating to M/s.Binco Constructions. While giving his Explanation as per Ex.P.1(u), the Accused-1 has stated that the Accused-3 directed him to hand over the Disputed Document to the ACIT, Central Range-II to ascertain as to whether or not the said document was relevant to the 55 [Spl.C.C.155/2010-J] assessment of Income Tax of M/s.Binco Constructions. In his Explanation given as per Ex.P.1(x), the Accused-3 has also admitted about the necessity of the Disputed Document to assess the Income Tax of M/s.Binco Constructions Company, which was then assessed by the ACIT, Central Range-II. As such, the Disputed Document was also necessary or had relevance to the ACIT, Central Range-II for assessment of Income Tax relating to M/s.Binco Constructions.
70. Thus, from the above evidence, it is clear that the Disputed Document was necessary for the Assessment Proceedings relating to the CES for the Assessment Years 2004-2005 to 2007-2008 and also for the Assessment Proceedings relating to M/s.Binco Constructions, even after passing Assessment Order for the Assessment Year 2004- 2005 relating to the CES.
b) Violation of Rules, Practice and Procedure:
71. According to the Complainant, while returning the impounded document, it is the practice and procedure to keep Copy of the same and to obtain Acknowledgement from the person, who receives back the impounded document. Though Section 133(A)(3) of the IT Act deals with the power of impounding documents during survey and retaining those documents by the Assessment Officer, it does not say anything about the procedure for returning the impounded documents. In his Cross-Examination, 56 [Spl.C.C.155/2010-J] P.W.1 has stated that Section 133(1)(A) of the IT Act and Office Manual of the Income Tax Act do not state that when the impounded documents are released, Copies should be retained. In his Cross-examination, P.W.4 has stated that there is no provision in the IT Act for taking Acknowledgement while returning impounded documents. However, P.W.4 has stated that as a matter of practice, the documents, which are retained with the approval of the Superior Authority, are not released without informing the Superior Officer and that while handing over impounded documents to the party, Acknowledgement will be taken from him. When P.W.5, by holding additional charge of the Office of the Accused-1 during his leave, returned Annexures-II and III, which were also the documents impounded by the Accused-1, he has retained Xerox Copies of those documents and obtained Acknowledgement, which is available in Ex.P.23. In fact, in Ex.P.1(e), the Accused-1 has also admitted about return of documents shown in Annexures-II and III to the Assessee after obtaining Xerox Copies of those documents. In Ex.P.1(x), the Accused-3 has specifically directed the Accused-1 to keep Copy of the Disputed Document. As such, it is clear that though there is no specific provision or rule to keep Copy of impounded document while returning that document and to obtain Acknowledgement from the person, who receives that document, there is a practice and procedure to keep Copy of the impounded document and obtain Acknowledgement, when an impounded document is returned. Apart from it, there was a direction 57 [Spl.C.C.155/2010-J] from the Accused-3 to the Accused-1 to keep Copy of the Disputed Document. Furthermore, the Disputed Document was also necessary relating to pending Assessment Proceedings for the Assessment Years 2005-2006 to 2007- 2008 and also for the Assessment Proceedings relating to M/s.Binco Constructions.
72. The learned Advocate appearing on behalf of the Accused-1 has contended that if the Accused-1 had retained the Disputed Document even after passing of Assessment Order, the Assessee would be entitled for damages and that as such, retention of the Disputed Document will be illegal and unlawful. In support of his contention, the learned Advocate appearing on behalf of the Accused-1 has relied upon a Judgment in the case of M/s.Subha & Prabha Builders Private Limited -Vs- ITO and Another in W.P.No.6564/2009 passed by the Hon'ble High Court of Karnataka on 24.04.2009. The legal position held in that decision that the Assessee is entitled for damages for illegal and unlawful retention of document is not in dispute.
73. But, in the case on hand, though the Assessment Order was passed on 22.12.2006 for the Assessment Year 2004-2005 by the Accused-1, the Disputed Document was required for examination relating to the Assessment Years 2005-2006 to 2007-2008 and also for the Assessment of Income Tax relating to M/s.Binco Constructions. Hence, retention of the Disputed Document by the Accused-1, 58 [Spl.C.C.155/2010-J] even after passing of Assessment Order for the Assessment Year 2004-2005, would not have been illegal or unlawful. On the other hand, it would have been legal and lawful. As such, the Accused-1 should not have returned the Disputed Document, though he passed Assessment Order for the Financial Year 2004-2005 or if he wanted to return that document, he should have kept a Copy of that document for further action. But, the Accused-1 has returned the Disputed Document on 29.03.2007 itself without keeping a Copy of the same and even without obtaining any Acknowledgement from the person, who received that document, inspite of specific direction by the Accused-3 to keep Copy of the said document. In Ex.P.16(b), though the Accused-1 has stated that Fax Copies were returned to the Assessee, he has not mentioned the name of the person to whom the said document was returned. In fact, the Accused-1 has not even taken the signature of the person, who received that document. Thus, it is clear that there is violation of practice, procedure and direction given by the Accused-3 to the Accused-1 in returning the Disputed Document, though the document was required for further examination.
c) Fraudulent and Dishonest Act:
74. The learned Public Prosecutor has argued that though the Accused-1 had knowledge about the Disputed Document, which was reflecting financial transactions worth Rs.10.20 Crores between the CES and M/s.Binco 59 [Spl.C.C.155/2010-J] Constructions during the Assessment Year 2004-2005, he did not consider those transactions for arriving at the tax liability, which shows his fraudulent and dishonest intention. She has further argued that knowing fully well that the Disputed Document was required for examination relating to the assessment of Income Tax for the Assessment Years 2005-2006 to 2007-2008 relating to the CES, he has fraudulently and dishonestly returned that document, without even keeping Copy of it. She has further argued that though the Accused-1 and 3 were aware that the Disputed Document was required to examine the Income Tax liability of M/s.Binco Constructions, the said document was not sent to the concerned Assessing Officer and that on the other hand, the Accused-1 and 3 have made a false report fraudulently and dishonestly that the Disputed Document was sent to the concerned Assessing Officer. She has further argued that the said fraudulent and dishonest acts of the Accused- 1 and 3 have resulted in undue loss of Tax Revenue to the Income Tax Department and corresponding pecuniary gain to the Accused-2 as well as M/s.Binco Constructions. On the other hand, the learned Advocates appearing on behalf of the Accused-1 and 3 have argued that the Accused-1 has considered the Disputed Document, investigated about the contents of that document based on oral as well as documentary evidence and that as the amount shown in the Disputed Document was found to be spent towards constructions made by M/s.Binco Constructions for the CES and that as such, the Accused-1 arrived at a conclusion 60 [Spl.C.C.155/2010-J] that the said amount shown in the Fax Sheet being a Capital Account cannot be treated as revenue for the purpose of tax liability. They have also further contended that the Disputed Document was not required for any other purpose and that there was neither fraudulent nor dishonest intention or act on the part of the Accused-1 and 3 in returning the Disputed Document to the Accused-2 and that there is no financial loss to the Income Tax Department or gain to the CES or M/s. Binco Constructions as contended by the Complainant.
Consideration of the Disputed Document for the Assessment Year 2004-2005:
75. In Ex.P.17(b), which is the Final Survey Report submitted by the Accused-1 on 12.11.2007, the Accused-1 has stated in respect of the Disputed Document at Page- 28 of Ex.P.17 as under:
"In the course of survey, certain documents were found in the Chamber of Chairman reflecting the statement of account as on
30.09.2003. This document is a fax sheet showing some opening balance of Rs.10.20 Crores and closing balance of Rs.9.24 Crores. Enquires revealed that these represented transactions between M/s.Binco Constructions, who are building contractors for M/s.Children Education Society and the Assessee.
M/s.Children Education Society has made 61 [Spl.C.C.155/2010-J] additions to building to the extent of Rs.25 to 30 Crores during the year 2003, which has been reflected in the regular Balance Sheet."
(Underlined by this Court.) As per the above report of the Accused-1, the said transaction worth Rs.10.20 Crores shown in the Disputed Document was in respect of the transactions between M/s.Binco Constructions and the CES and the additions to the building made by the CES to an extent of Rs.25 to 30 Crores during the year 2003 has been shown in the regular Balance Sheet. According to the learned Advocates appearing on behalf of the Accused-1 and 3, this Rs.25 to 30 Crores includes the said transaction in the Disputed Document and thus, the Accused-1 has considered and appreciated the Disputed Document while assessing the Income Tax relating to the CES for the Assessment Year 2004-2005.
76. But, in Ex.P.1(u), which is the Explanation given by the Accused-1 on 04.04.2008, the Accused-1 has stated about the Disputed Document at Page-44 of Ex.P.1 as under:
"In the course of survey conducted in the above case on 29.8.2006 in addition to other documents one bunch containing 5 to 6 pages was found. In this bunch, one fax message was also attached. In all these papers some figures were typed without reference to any 62 [Spl.C.C.155/2010-J] names or even to any project or business venture of the assessee group. Initially it was thought that it will be of some relevance to the determination of the assessee's total income and therefore these papers were impounded u/s.133A. Later on detailed scrutiny of the papers were undertaken. The assessee and his representatives were heard. It was found that the notings in the papers had no relevance to the activities of the assessee as no names were written except some figures which could not be linked to the assessee's business activities."
(Underlined by this Court.) In Page-43 of that document, the Accused-1 has stated as follows:
"a)The documents were returned to the assessee as no action was possible in the case of the assessee or in the case of M/s.Binco Construction group which could be linked to the activities. As the papers on verification were found to be of no relevance to the determination of the assessee's income, it was decided to release these papers.
b) In view of the sequence of events explained earlier, there is no question of apprehension 63 [Spl.C.C.155/2010-J] that the release of paper had caused any revenue loss".
(Underlined by this Court.) As per the above Explanation, according to the Accused-1, there was no reference to any names or even to any project or business venture of the Assessee i.e., the CES or to the activities of M/s.Binco Constructions Private Limited in respect of the figures found in the Disputed Document and as such, the said document had no relevance to the activities of the CES and M/s.Binco Constructions Private Limited and figures in that document could not be linked to the business of the CES or M/s.Binco Constructions Private Limited and thus, no action was possible in the case of the Assessee i.e., the CES or M/s.Binco Constructions Private Limited, as that document was of no relevance to the determination of the Assessee's income. This Explanation of the Accused-1 is totally inconsistent with and contrary to his Report given in Ex.P.17(b), as observed above, as it is stated in that Report that the figures in the Disputed Document relate to the transactions between the CES and M/s.Binco Constructions Private Limited. This inconsistent and contradictory stand creates a serious doubt in the attitude and acts of the Accused-1 relating to the Disputed Document, which makes it impossible to believe his contention that he considered and appreciated the Disputed Document in its true perspective.
64 [Spl.C.C.155/2010-J]
77. As observed above, in Ex.P.17(b), the Accused-1 has stated that the CES has made additions to building to an extent of Rs.25 to 30 Crores during the year 2003, which is reflected in the regular Balance Sheet. According to the Accused-1, M/s.Binco Constructions Private Limited, who are the building contractors for the CES, have made that addition work to the building and the transactions shown in the Disputed Document to an extent of Rs.10.20 Crores etc., relate to the payments made to M/s.Binco Constructions Private Limited in respect of that addition work and as such, the said amount is covered in the amount of Rs.25 to 30 Crores shown in the Balance Sheet under the Head of Additions to Building. Ex.D.3 is the Income Tax Return filed by the CES for the Assessment Year 2004-2005 i.e., for the Financial Year 2003-2004. This document contains the Balance Sheet also. As per that Balance Sheet, particulars of addition to building are shown as under:
Sl. Amount spent for
Page Exhibit
No. Particulars Additions during
No. No. the year.
1. 41 D.3(b) Building at
Bommanahalli. Rs.8,29,49,720.00
2. 120 D.3(g) Building at
Bommanahalli-
Ground & 8th
Floor. Rs. 23,53,272.00
3. 179 D.3(h) Ground to 7th
Floor-WIP. Rs.1,04,42,738.22
Total: Rs.9,57,45,730.22
65 [Spl.C.C.155/2010-J]
Ex.D.9 is the Assessment Order passed by the Accused-1 in respect of the said Income Tax Return filed by the CES. At Pages-28 to 33 of that document, the Accused-1 has considered those additions. Thus, as per the particulars shown in Ex.D.3 by the CES and the Assessment Order passed by the Accused-1 as per Ex.D.9, total amount spent during the Assessment Year 2004-2005 towards additional construction of the building by the CES is Rs.9,57,45,730.22 only and not Rs.25 to 30 Crores as stated by the Accused-1 in Ex.P.17(b). This circumstance shows that the Accused-1 has made false report about the Survey as well as in respect of the Disputed Document.
78. As observed above, from the evidence available on record, it is clear that the Disputed Document consisting of Fax Message Sheets received by the CES from M/s.Binco Constructions Private Limited was showing Statement of Account as on 30.09.2003, consisting of Principal amount payable, Rate of Interest payable, Interest Calculation, Payments and Receipts for various months, Outstanding Balance as on 31.08.2003 and Closing Balance as on 30.09.2003. Said contents of the Disputed Document do not indicate that the transaction was relating to construction work done or supply of labour by M/s.Binco Constructions to the CES. On the other hand, those contents of the Disputed Document clearly indicate that the transactions mentioned in that document relate to a loan transaction.
66 [Spl.C.C.155/2010-J]
79. However, it was not difficult for the Accused-1 to ascertain from the Accused-2 and P.W.11 about the transactions shown in the Disputed Document. As observed above, Ex.D.7 and Ex.D.8 are said to be the Statements recorded by the Accused-1 on oath during Survey and Assessment Proceedings. Ex.D.7 indicates that it was recorded on 01.09.2006 at 4.30 p.m. Ex.P.16 is the File relating to Survey Proceedings and Ex.P.45 is the File relating to Assessment Proceedings for the Assessment Year 2004-2005 relating to the CES. Ex.P.16 and Ex.P.45 do not show that the Proceedings were held on 01.09.2006 and that the Statement of the Accused-2 was recorded on that day. Order Sheet-Ex.P.16(a) shows that the Proceedings were held on 30.08.2006 and that it was adjourned to 01.09.2006. But, it does not show that there was Proceedings on 01.09.2006. However, Order Sheet dated 05.09.2006-Ex.P.16(c) shows that the Accused-2 appeared on that day before the Accused-1 and that his Statement was recorded on that day by the Accused-1 as per Ex.D.8. Ex.P.16(c) and Ex.D.8 indicate that when the Accused-1 asked the Accused-2 about the Disputed Document, he took time to verify the transactions shown in that Disputed Document and that for that purpose, he took Photocopy of the Disputed Document on that day from the Accused-1. Ex.P.16(c) shows that the case was further adjourned to 11.09.2006. But, there is nothing to show that Proceedings were held on 11.09.2006 or subsequent to 05.09.2006 on any day till 29.03.2007 on which date, the Accused-1 returned the Disputed 67 [Spl.C.C.155/2010-J] Document to the Assessee. There is also nothing in Ex.P.16 and Ex.P.45 to show that after 05.09.2006 and before passing the Assessment Order, the Accused-1 took explanation from the Accused-2 about the transactions of the Disputed Document. There is also nothing in Ex.P.16 and Ex.P.45 to show that the Accused-1 came to know from the Accused-2 that the transaction of the Disputed Document was relating to construction work done or supply of labour by M/s.Binco Constructions for construction of any building belonging to the CES.
80. P.W.7-Sri.S.Venkateshan is a Chartered Accountant working for the CES. He has deposed that, he had accompanied the Accused-2 to the Income Tax Office during Assessment Proceedings conducted by the Accused- 1 in the month of August 2006. He has also deposed that when the Accused-1 questioned the Accused-2 about the Fax Message, the Accused-2 told that the said Fax Message belonged to P.W.11 and that he was unconcerned with that Fax Message. If at all the transactions of the Disputed Document were in respect of building construction or supply of labour as contended by the Accused-1, the Accused-2 would have stated the same before the Accused-1. But, he has not done so. On the other hand, according to P.W.7, the Accused-2 even did not accept that the Disputed Document belonged to his transactions with P.W.11. As such, though the Chartered Accountant of the Accused-2 was present when the Accused-1 examined the Accused-2, the Accused-1 did not get any information to the effect that the transaction 68 [Spl.C.C.155/2010-J] shown in the Disputed Document was relating to construction of building of the CES or supply of labour by M/s.Binco Constructions Private Limited to the CES for such construction.
81. Though the Accused-1 examined P.W.8, who is the daughter of the Accused-2, and recorded her Statement as per Ex.D.6 on 29.08.2006, he did not get any information from her relating to the Disputed Document to the effect that the transactions of the Disputed Document were pertaining to construction work. As such, the said Statement was also of no assistance to the Accused-1 to come to a conclusion that the transactions of the Disputed Document relating to construction work done by M/s.Binco Constructions on behalf of the CES.
82. As observed above, Ex.D.5 is the Statement of P.W.11 said to have been recorded by the Accused-1 on 06.09.2006. Ex.P.16 and Ex.P.45 do not show about recording of such a Statement by the Accused-1. In fact, the said Statement was not available in Ex.P.16 or Ex.P.45 and it was retrieved by the GEQD from the Hard Disc- M.O.1 seized from the Office of the Accused-1. In that Statement, P.W.11 has not stated that the transactions of the Disputed Document relate to construction work done by him or supply of labour by him to the CES. On the other hand, in that Statement, he has gone to the extent of saying that the transactions shown in the Disputed Document do not belong to him. As such, the said 69 [Spl.C.C.155/2010-J] Statement of P.W.11 was also of no assistance to come to a conclusion that the transactions shown in the Disputed Document relating to construction work as contended by the Accused-1 in this case. In his evidence before this Court also, though P.W.11 has stated that in the year 2004-2005, he had supplied labours to the CES for construction of building, it is not his evidence that he supplied labours to the CES in the year 2003-2004 and that the Disputed Document relates to the said transaction of supplying labour to the CES. This circumstance also negatives the contention of the Accused-1.
83. The learned Advocates appearing on behalf of the Accused-1 and 3 have strongly relied upon the evidence of P.W.15 and P.W.16 to substantiate their contention that the transactions shown in the Disputed Document relate to labour supplied by M/s.Binco Constructions to the CES for constructing buildings by the CES during the Assessment Year 2004-2005 and that action taken by the Accused-1 in this regard is justified. As such, it is necessary to scrutinize the evidence of P.W.15 and P.W.16 to ascertain the nature of transactions in the Disputed Document.
84. P.W.16 is the Assistant General Manager (Accounts) of BN Group of Companies. In his evidence, P.W.16 has deposed that his companies provided labour services to the CES since 2001 for construction of Hostel Building for Boys, Hostel Building for Girls, Dental College and Staff Quarters at Bommanahalli. He has identified 70 [Spl.C.C.155/2010-J] Ex.P.16(e) and Ex.P.16(f) as the Ledger Sheets of M/s.Bamdev Naik Company for the Financial Years 2004- 2005 and 2005-2006. However, he has stated that he cannot say as to whether the entries in those documents relate to transactions pertaining to constructions. As Ex.P.16(e) and Ex.P.16(f) are not relating to the Assessment Year 2004-2005, they are of no assistance to ascertain the nature of transaction in the Disputed Document, which relates to the Assessment Year 2004- 2005.
85. P.W.16 has further deposed that there were four running bills amounting to Rs.10.06 Crores raised by M/s.Bamdev Naik Company to the CES and that among those bills, three bills totaling Rs.7.81 Crores relate to the year 2002-2003 and another bill for Rs.2.35 Crores relate to the year 2003-2004. He has identified Ex.P.22(b) as the Balance Sheet and Ex.P.22(c) and also Ex.P.22(d) as Schedules-15 and 15A relating to M/s.Bamdev Naik Company as on 31.03.2004. As per these documents, M/s.Bamdev Naik Company has received Rs.2,35,39,993/- from the CES towards labour charges in the year 2003- 2004. However, this document does not show any reference to the transactions shown in the Disputed Document. As such, the said evidence is also of no assistance to ascertain the nature of the transactions shown in the Disputed Document as contended by the Accused-1 and 3.
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86. P.W.16 has further deposed that CBI Officers enquired him about the Fax Message relating to Rs.10.2 Crores and that he told them that he does not know about that Fax Message and that he cannot say as to whether the said Rs.10.2 Crores is similar to Rs.10.06 Crores referred to by him in his evidence. However, in his Cross- Examination, P.W.16 has stated that he has stated before the CBI Officers as under:
"I have gone through the records of Sri.Bamdev Nayak. It is seen that the following RA (Running A/c) Bills have been raised on different institutions of M/s.Children Education Society for supply of labour to the society for construction work:
1. Vide Letter dated BN/HO/788 dated 11.03.03 labour has been supplied to the tune of Rs.5,63,91,181/- to M/s.Children Education Society;
2. Vide Letter dated BN/HO/832 dated 15.03.03 labour has been supplied to the tune of Rs.53,14,175/- to M/s.Children Education Society;
3. Vide Letter dated BN/HO/831 dated 17.03.03 labour has been supplied to the tune of Rs.1,54,51,283/- to M/s.Children Education Society;
4. Vide Letter dated BN/HO/423 dated 24.02.04 labour has been supplied to the tune of 72 [Spl.C.C.155/2010-J] Rs.2,35,39,993/- to M/s.Children Education Society.
The above amounts add upto Rs.10,06,98,632/-. This is the nearest amount that tallies with the figures stated to be sent to the fax mentioned above. This has been declared in the Income Tax returns for the concerned year."
As per the above statement, according to P.W.16, Rs.10,06,98,632/- relating to 4 running bills raised by M/s.Bhamdev Naik Company to the CES is the nearest amount, which tally with the figures stated in the fax message i.e., the Disputed Document and the said amount has been declared in the Income Tax Returns for the concerned year. In his Cross-Examination, P.W.16 has stated that his evidence is based on record and not from his personal knowledge. As such, it is clear that P.W.16 has no personal knowledge about the running bill transactions and the transactions shown in the Disputed Document.
87. During investigation, P.W.15 has recorded the said Statement of P.W.16. In his Cross-examination, P.W.15 has stated that during the course of examination of P.W.16, he came to know that the figures mentioned in the fax tally with the amount of Rs.10 Lakhs and odd in respect of labour supplied to the CES. As observed above, 73 [Spl.C.C.155/2010-J] the Disputed Document containing fax sheets pertain to Rs.10 Crores and odd and not Rs.10 Lakhs and odd.
88. If the said statement given by P.W.16 before the Investigating Officer is considered along with the answers given by him in his Examination-in-chief in this case, it is clear that among those 4 running bills, 3 bills totaling Rs.7.81 Crores relate to the Assessment Year 2003-2004 and that 1 bill to an extent of Rs.2.35 Crores relates to the Assessment Year 2004-2005. But, as observed above, contents of the Disputed Document indicate transactions worth Rs.10.20 Crores relating to the Assessment Year 2004-2005 and not just Rs.2.35 Crores. Further contents of those fax sheets indicate about payable principal amount, interest, etc., which imply that the transactions relate to a loan transaction. Contents of those fax sheets do not indicate in any manner about labour supplied to the CES by M/s.Binco Constructions or Sri.Bamdev Naik. No doubt, as observed above, Ex.P.22(c) indicates that for the Assessment Year 2004-2005, M/s.Bamdev Naik Company has declared receipt of labour charges of Rs.2,35,39,993/- from the CES. But, there is nothing in Ex.P.22(b) to Ex.P.22(d) about payment or receipt of principal, interest etc., to or from the CES as shown in the Disputed Document. As such, from the said answers given by P.W.15 and P.W.16, it cannot be inferred or even presumed that the transactions referred to in the Disputed Document relate to the labour supplied to the CES by M/s.Binco Constructions or Sri.Bamdev Naik. Further more, as observed above, Sri.Bamdev Naik i.e., P.W.11 himself 74 [Spl.C.C.155/2010-J] has not stated that he supplied labours to the CES during the year 2003-2004, he received amount of Rs.10.20 Crores or atleast Rs.10.6 Crores from the CES towards labour charges. On the other hand, as observed above, he has contended that he did not send fax message to the CES and that the transactions shown in that document do not belong to him. This circumstance also negatives the contention of the Accused-1 and 3.
89. It is pertinent to observe here that, either during Survey Proceedings or Assessment Proceedings, the Accused-1 did not examine P.W.16 or recorded his statement. As such, the alleged evidence that, Rs.10.6 Crores relating to 4 running bills being the nearest amount to Rs.10.20 Crores tally with the figures shown in the Disputed Document, was not available to the Accused-1 to appreciate and to conclude accordingly.
90. In Ex.P.1(u) and Ex.P.1(x), the Accused-1 and 3 have contended that the Disputed Document was scrutinized in detail, Assessee and his representatives were heard and that it was found that the Disputed Document had no relevance to the activities of the CES and that as such, the Disputed Document was returned. Though this contention indicates about scrutiny of the Disputed Document in detail by the Accused-1 and 3 in the presence of the Assessee and his representatives with reference to Assessment Proceedings relating to the CES, there is nothing in Ex.P.1, Ex.P.16, Ex.P.17, Ex.P.23 and Ex.P.45 about such scrutiny. In fact, in Ex.P.1(u) and Ex.P.1(x), it 75 [Spl.C.C.155/2010-J] is not stated as to when actually such scrutiny was made. There is nothing to substantiate the said contention of the Accused-1 and 3. Under these circumstances and on considering the nature of the Disputed Document and other evidence as observed above, it is clear that knowing fully well about the Disputed Document, the Accused-1 and 3 have made a false report and record to the effect that the said Document was scrutinized and that it was found that it had no relevance to the Assessment Proceedings relating to the CES.
91. As observed above, in view of the inconsistent and contradictory stand taken by the Accused-1 himself in Ex.P.1(u) and Ex.P.17(b), it is difficult to believe that he considered and appreciated the Disputed Document, while assessing the tax liability of the CES for the Assessment Year 2004-2005 or while concluding Survey Proceedings. As observed above, the Accused-1 has made a false report about the expenses made by the CES towards addition to building during the Assessment Year 2004-2005. It is pertinent to observe here that total amount spent by the CES for putting additional construction during the Assessment Year 2004-2005 was Rs.9,57,45,730.22 only. The said amount includes not only expenditure towards labour charges paid if any to M/s.Binco Constructions, but also, includes expenses towards building materials, services of Engineers etc. Though Ex.D.3 and Ex.D.9 do not indicate as to what was the actual amount paid by the CES to M/s.Binco Constructions towards labour charges during the Assessment Year 2004-2005, on considering the 76 [Spl.C.C.155/2010-J] answers given by P.W.16 in his Cross-Examination, it can be inferred that the said amount paid was only Rs.2,35,39,993/-, which relates to Bill No.BN/HO/423 dated 24.02.2004. As such, it is impossible to believe at any stretch of imagination that Rs.10.20 Crores referred to in the Disputed Document relates to labour charges paid by the CES to M/s.Binco Constructions during the Assessment Year 2004-2005. As observed above, the Accused-1 did not get any information from the Accused-2, P.W.8 and P.W.11, though he examined and recorded their Statements, to link the contents of the Disputed Document to the labour charges paid by the CES to M/s.Binco Constructions. As observed above, the evidence of P.W.16 was not available to the Accused-2 as he did not examine that person. Though the Accused-1 has taken a bald contention, while Cross-examining P.W.4, that the Accused-1 secured assessment records relating to M/s.Binco Constructions by writing a Letter on 30.08.2006, there is nothing in Ex.P.1, Ex.P.16, Ex.P.17, Ex.P.21, Ex.P.22, Ex.P.23 and Ex.P.45 about writing of such a Letter, securing of those assessment records and verification of those records for the purpose of appreciating the contents of the Disputed Document. As such, there was no material or evidence before the Accused-1 to come to a conclusion that the transactions shown in the Disputed Document relate to additions to building made by the CES through M/s.Binco Constructions. In fact, on careful consideration of the contents of Page-28 of Ex.P.17(b), referred to above, it is clear that even the Accused-1 has 77 [Spl.C.C.155/2010-J] not clearly or specifically stated that the transactions in the Disputed Document relate to construction work done by M/s.Binco Constructions. It is also not stated clearly by the Accused-1 that Rs.25 to 30 Crores referred to by him relate to the transactions of the Disputed Document. By relying upon Ex.P.21(a), the learned Advocate appearing on behalf of the Accused-1 has contended that the Accused-1 returned Income Tax Returns for the Assessment Years 2004-2005 and 2005-2006 relating to M/s.Binco Constructions to the ACIT, Central Circle-II(3), Bengaluru, which indicates that he had received those Income Tax Returns for appreciating the Disputed Document. But, Ex.P.21(a) does not show that the Accused-1 returned Income Tax Returns as contended by the learned Advocate appearing on behalf of the Accused-
1. On the other hand, that document shows that on the point of jurisdiction, the Accused-1 returned Income Tax Returns to the ACIT, Central Circle-II(3) for assessment. Hence, Ex.P.21(a) is of no assistance to the learned Advocate appearing on behalf of the Accused-1 to substantiate his contention. Thus, it is not fit to accept the arguments advanced on behalf of the Accused-1 that the transactions shown in the Disputed Document relate to the building construction transactions between the CES and M/s.Binco Constructions Private Limited. If at all, the Accused-1 had considered and appreciated the contents of the Disputed Document, while assessing the tax liability of the CES, he would have definitely mentioned about the same in Ex.D.9. But, he has not done so.
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92. For all the above reasons, it is crystal clear that the Accused-1 failed to consider and appreciate the contents of the Disputed Document while assessing the tax liability of the CES for the Assessment Year 2004-2005 and that the Accused-1 and 3 have made a false report and record to the effect that the said Document was scrutinized and that it was found that it had no relevance to the Assessment Proceedings relating to the CES. On the other hand, the contradictory stand taken by the Accused-1 in Ex.P.1(u) and Ex.P.17(b), false report made by him about the expenses made by the CES towards additions to buildings and not referring the Disputed Document by him in the Assessment Order, though the Disputed Document showing the loan transactions to the tune of Rs.10.20 Crores clearly show his fraudulent and dishonest intention to keep away the transactions of the Disputed Document from the assessment of Income Tax. It is also clear that the false report made by the Accused-1 and 3 about scrutiny of the Disputed Document in the presence of the Assessee and his representatives also show their fraudulent and dishonest intention to suppress the Disputed Document from the Assessment Proceedings.
Consideration of the Disputed Document by the ACIT, Central Range-II or the DCIT, Central Circle- II(3):
93. As observed above, the Disputed Document was necessary or had relevance to assess the Income Tax of M/s.Binco Constructions Private Limited and the ACIT, 79 [Spl.C.C.155/2010-J] Central Range-II had jurisdiction to assess the Income Tax liability of M/s.Binco Constructions Private Limited. As observed above, in Ex.P.1(u), the Accused-1 has stated that the Accused-3 directed him to hand over the Disputed Document to the ACIT, Central Range-II to ascertain as to whether the said document was relevant or not to the assessment of Income Tax relating to M/s.Binco Constructions Private Limited. In Ex.P.1(u), though the Accused-1 has not clearly stated as to whether he handed over the Disputed Document to the ACIT, Central Range-II as per the directions of the Accused-3, he has stated that after few days, the DCIT, Central Range-II(3) returned the papers implying thereby that the said papers were not relevant to the groups of cases assessed in their Range also. Contents of Ex.P.1(u) indicate that original of the Disputed Document was sent to the ACIT, Central Range-II and that after few days, the DCIT, Central Circle-II(3) returned that document. In Ex.P.1(x), though the Accused- 3 has not stated that he directed the Accused-1 to hand over the Disputed Document to the ACIT, Central Range- II, he has stated that a Copy of the Disputed Document was given by him to the then ACIT, Central Range-II, Bengaluru. He has also stated in that document that a Copy of the Disputed Document was handed over by the ACIT, Central Range-II to the DCIT, Central Circle-II(3) and that he was not aware as to whether those papers were returned by the DCIT, Central Circle-II(3) to the DCIT, Central Circle-I(3). As per this Letter of the Accused- 3, only a Copy of the Disputed Document was given to the 80 [Spl.C.C.155/2010-J] ACIT, Central Range-II. But, as per Ex.P.1(u), Copy of the Disputed Document was not given to the ACIT, Central Range-II. On the other hand, as per that document, the original document itself was given to the ACIT, Central Range-II. However, it is not stated by the Accused-1 and 3 in Ex.P.1(u) and Ex.P.1(x) or anywhere in their records relating to the Assessment Proceedings as to when actually the Disputed Document or its Copy was given to the ACIT, Central Range-II. There is nothing in Ex.P.1, Ex.P.16, Ex.P.17, Ex.P.23 and Ex.P.45 to show that the Disputed Document or its Copy was sent to the ACIT, Central Range-II and that in turn, the ACIT, Central Range-II gave that document to the DCIT, Central Circle-II(3) and that later, the DCIT, Central Circle-II(3) returned that document.
94. P.W.4 was working as the ACIT, Central Range-II from 2003 to January 2007. He has deposed that Assessment Proceedings relating to M/s.Binco Constructions Private Limited and M/s.Bamdev Naik Company were coming under the ACIT, Central Range-II, Bengaluru. He has identified Ex.P.21 and Ex.P.22 as the Assessment Files for the Assessment Year 2004-2005 relating to those 2 Companies. He has specifically stated that, he did not receive the Disputed Document from the Accused-1 and 3 as stated in Ex.P-1(u) and Ex.P.1(x). In the Cross-examination, P.W.4 has stated that the Accused- 1 has conducted Survey on 29.08.2006. But, he has stated that he does not know about submission of Report 81 [Spl.C.C.155/2010-J] by the Accused-1 to the CIT. He has further stated that he does not remember that the Accused-1 informed him about the Survey at the end of the month as per practice. He has further stated that he cannot say without looking into the records that the transactions relating to the CES and M/s.Binco Constructions Private Limited were informed to him at that time. However, the evidence of P.W.4 that the Disputed Document was not sent to him as stated in Ex.P.1(u) and Ex.P.1(x) remained unchallenged and there is no reason to disbelieve that evidence.
95. In the Cross-Examination, P.W.4 has admitted that Ex.P.22(a) is the Letter dated 20.10.2005 written by P.W.6 to him and that in that Letter, there is a reference about sending of Appraisal Report regarding Search conducted in the case of Sri.Bhamadev Naik and M/s.Binco Constructions Private Limited. He has also admitted that Ex.D.12 is the said Appraisal Report and that Ex.D.12(a) is the Note about Reconciliation of Accounts of the CES and M/s.Binco Constructions Private Limited. By relying upon Ex.D.12(a), the learned Advocate appearing on behalf of the Accused-1 has contended that as the Accounts of the CES and M/s.Binco Constructions Private Limited are reconciled, it has to be inferred that the Disputed Document was considered while assessing Income of the CES and M/s.Binco Constructions Private Limited. But, P.W.4 has stated that the said Accounts, which are reconciled, relate to Page-7 of bundle bearing No.A/BNO/3 of Ex.D.12(a). Ex.D.12(a) reads as under:
82 [Spl.C.C.155/2010-J] "Page No.7: These entries are related to amount received/paid against contract work executed to various institutions of Children's Education Society Reg. (Oxford Group). This statement is prepared by the society for reconciliation of accounts during auditing.
Before reconciliation, some payments received from the society wrongly credited to different heads which was rectified and reconciled later. All the transactions appeared in this page are duly accounted in the regular books of accounts."
Contents of Ex.D.12(a) deal with the entries relating to amount received/paid pertaining to the contract work done by M/s.Bamdev Naik Company relating to the CES. As per those contents, the transactions appeared in Page-7 of bundle No.A/BNO/3 are duly accounted in the regular Books of Accounts. In Page-4 of Ex.D.12, details of File bearing No.A/BNO/3 are given. Those details as well as contents of Ex.D.12(a) do not show anything about the contents of the Disputed Document. As per Ex.D.12, the Appraisal Report was prepared in the year 2004 and as per Ex.P.22(a), that Report was sent to P.W.4 on 20.10.2005. As observed above, the Disputed Document was seized on 29.08.2006 during Survey Proceedings. As such, even prior to seizure of the Disputed Document, Ex.D.12 was prepared and therefore, there was no chance at all to refer the Disputed Document while preparing the Appraisal Report and making a Note as per Ex.D.12(a) with 83 [Spl.C.C.155/2010-J] reference to the Disputed Document. Hence, it is not fit to accept the arguments advanced on behalf of the Accused-1 that Ex.D.12(a) shows consideration and appreciation of the entries relating to the Disputed Document.
96. P.W.6-Sri.S.N.Sethuram was working as the DCIT, Central Circle-II(3) from May 2003 to February 2007. He has deposed that assessments relating to M/s.Bamdev Naik and M/s.Binco Constructions Private Limited were under his jurisdiction and that he passed Assessment Orders in respect of those 2 firms. He has identified Ex.P.21 and Ex.P.22 as the Files relating to the said Assessment Orders. He has deposed that impounded documents relating to the CES were not sent to him during his tenure and that there is nothing in Ex.P.21 and Ex.P.22 for having sent such impounded documents to him. He has specifically stated that he did not receive any impounded documents and that he did not return those documents as stated in Ex.P.1(u). He has also deposed that loan amount of Rs.10.20 Crores and Interest said to have been paid on that amount as claimed by M/s.Binco Constructions Private Limited and M/s.Bamdev Nayak Company were not shown in the returns filed by those firms for the year 2004-2005. Thus, from the evidence of P.W.4 and P.W.6, it is clear that the Disputed Document was not sent to the ACIT, Central Range-II by the Accused-1 and 3 and that the DCIT, Central Circle-II(3) did not return that document as stated in Ex.P.1(u) and Ex.P.1(x). This evidence shows that the Accused-1 and 3 84 [Spl.C.C.155/2010-J] have made false report in their explanations, which fortifies the contention of the Complainant about the fraudulent and dishonest intention of the Accused-1 and 3 to keep away the Disputed Document from the Assessment Proceedings relating to M/s.Binco Constructions Private Limited also.
97. P.W.6 has further deposed that as per Ex.P.21, Business Income of M/s.Binco Constructions Private Limited for that year was Rs.30,39,833/- and that other Income was Rs.18,743/-. He has also deposed that as per Ex.P.22, Business Income of M/s.Bamdev Nayak Company for that year was Rs.1,89,85,327/-, Long Term Capital Gain Income was Rs.8,50,750/- and other Income was Rs.9,08,034/-. The said evidence of P.W.6 remained unchallenged.
98. As per the said evidence of P.W.6, the income of M/s.Binco Constructions Private Limited for the Assessment Year was around Rs.40,00,000/- only and that of M/s.Bamdev Naik was around Rs.2,10,00,000/- only. As per the said evidence of P.W.6, the loan transaction to the tune of Rs.10,20,00,000/- shown in the Disputed Document were not shown in the Income Tax Returns filed by M/s.Binco Constructions Private Limited and M/s.Bamdev Naik Company for the Assessment Year 2004- 2005. Contents of Ex.P.21 and Ex.P.22 corroborate the evidence of P.W.6. Thus, it is clear that the transactions shown in the Disputed Document to the tune of Rs.10.20 Crores between the CES and M/s.Binco Constructions 85 [Spl.C.C.155/2010-J] Private Limited were not shown in the Income Tax Return filed by M/s.Binco Constructions Private Limited and M/s.Bamdev Naik and that the said transactions were not assessed to Income Tax for the Assessment Year 2004- 2005.
99. On considering the above facts, circumstances and the evidence, it is clear that the Accused-1 and 3 did not send the Disputed Document to the ACIT, Central Range-II for considering the assessment of Income Tax relating to M/s.Binco Constructions Private Limited and M/s.Bamdev Naik for the Assessment Year 2004-2005 and that the transactions shown in the Disputed Document were not considered and appreciated while assessing the Income Tax relating to M/s.Binco Constructions Private Limited and M/s.Bamdev Naik and that the Accused-1 and 3 have made a false report in this regard with fraudulent and dishonest intention to make it believe that the Disputed Document was considered for the assessment of Income Tax relating to M/s.Binco Constructions Private Limited and M/s.Bamdev Naik Company.
Consideration of the Disputed Document for the Assessment Years 2005-2006 to 2007-2008:
100. As observed above, on the ground that the Accused-1 was in need of the Disputed Document for examination relating to the Assessment Proceedings relating to the CES pending for the Assessment Years 2005-2006 to 2007-2008 also, he obtained permission to 86 [Spl.C.C.155/2010-J] retain the Disputed Document up to 31.12.2007 by writing a Letter as per Ex.P.1(e) on 26.03.2007. As observed above, the Accused-3 also recommended for such retention of the Disputed Document by writing a Letter as per Ex.P.1(f) on 26.03.2007 itself. As such, according to the Accused-1 and 3, the Disputed Document was necessary for examination relating to the Assessment Proceedings pending for the Assessment Years 2005-2006 to 2007-2008 pertaining to the CES. But, on 29.03.2007 itself, the Accused-1 returned the Disputed Document to the Assessee. There is nothing in Ex.P.1, Ex.P.16, Ex.P.17 or any other document maintained by the Accused-1 and 3 to show that, in between 26.03.2007 and 29.03.2007, the Accused-1 and 3 ascertained from the records or from the CES or from M/s.B.N.Group of Companies that the Disputed Document was not relevant for the Assessment Years 2005-2006 to 2007-2008. Furthermore, as the Accused-1 was transferred, he did not pass Assessment Orders relating to the Assessment Years 2005-2006 to 2007-2008. Subsequently, P.W.1 assumed charge of the Office of the DCIT, Central Circle-I(3), Bengaluru on 11.06.2007 and he passed Assessment Order on 31.12.2007 as per Ex.P.4 relating to the Assessment Year 2005-2006 pertaining to the CES. As the Accused-1 had returned the Disputed Document to the Assessee on 29.03.2007 itself i.e., even prior to taking of charge of the Office by P.W.1, P.W.1 had no chance of considering the Disputed Document for the assessment of the Income Tax Returns for the Assessment Years 2005-2006 to 2007- 87 [Spl.C.C.155/2010-J] 2008. In fact, he has informed to his superiors through Ex.P.1(i) and Ex.P.17(a) about non-existence of the Disputed Document in the file, which was required for examination relating to the Income Tax assessment for the Assessment Years 2005-2006 to 2007-2008. Thus, it is clear that the Disputed Document was not available for consideration and appreciation relating to Assessment Proceedings for the Assessment Years 2005-2006 to 2007-
2008 pertaining to the CES and that even prior to completion of those proceedings, the Accused-1 returned that document and that the Accused-1 & 3 have made a false record and report that the Disputed Documents had no relevance to the Assessment Proceedings relating to the CES.
d) Loss/Gain due to return of the Disputed Document:
101. The learned Public Prosecutor has argued that the Disputed Document relates to loan transaction between the CES and M/s.Binco Constructions Private Limited, the CES and M/s.Binco Constructions Private Limited have received/paid money relating to that transaction, the said receipt/payment of money being not accounted will be unexplained income/expenditure for the CES and M/s.Binco Constructions Private Limited and that, as such, the said receipt/payment, being the Income of the Assessee for that Financial Year, is taxable by virtue of Section 69 of the IT Act. She has further argued that due to return of the Disputed Document illegally by the 88 [Spl.C.C.155/2010-J] Accused-1 and 3, without considering for the Assessment Proceedings, the Income Tax Department has suffered loss of huge revenue and that on the other hand, the CES and M/s.Binco Constructions Private Limited are benefited by corresponding gain. On the other hand, the learned Advocates appearing on behalf of the Accused-1 and 3 have contended that none of the witnesses examined by the Complainant has stated about loss or gain due to return of the Disputed Document. They have also relied upon the answer given by P.W.15-Sri.L.S.Padma Kumar, who is the Investigating Officer, in his Cross-examination that he did not work out about revenue loss suffered due to the acts of the Accused-1 and 3 and that he did not take any Expert's opinion in this regard. On the basis of the said evidence, it is the argument of the learned Advocates appearing on behalf of the Accused-1 and 3 that no loss was suffered or no gain was made due to the acts of the Accused-1 and 3. It is the specific case of the Complainant that, the illegal acts of the Accused-1 to 3 resulted in revenue loss to the Income Tax Department and wrongful gain to the Accused-1 to 3, P.W.15 being an Investigating Officer, who has filed Charge Sheet also, is the competent person to work out the said loss and gain. He could have taken the assistance of Income Tax Expert also to work out that loss and gain. But, he did not bother to work out the same for the reasons best known to him. However, fortunately for the Complainant, P.W.15 has denied the suggestion put on behalf of the Accused-1 that there was no revenue loss as charged by him. Though none of the 89 [Spl.C.C.155/2010-J] witnesses has deposed about actual loss or gain due to return of the Disputed Document without considering for the assessment of Income Tax, the available material on record on that point, cannot be ignored or discarded and on the material available on record, it is not difficult to ascertain the same.
102. As observed above, the Disputed Document was received from M/s.Binco Constructions Private Limited by the CES, which was showing Statement of Account as on 30.09.2003 consisting of Principal Amount Payable, Interest Payable @ 2.5%, Interest Calculation, Payments & Receipts for various months including Receipt of Rs.5,00,000/- each on 07.10.2003 and 08.10.2003, Outstanding Balance of Rs.10.20 Crores as on 31.08.2003 and Closing Balance of Rs.9,24,83,086/-. As per the evidence available on record, the said document was showing that as on 30.09.2003, Principal amount receivable was Rs.9,00,00,000/- and Interest Receivable was Rs.24,83,086/-.
103. Though the said contents of the Disputed Document indicate a loan transaction between M/s.Binco Constructions Private Limited and the CES, it does not show clearly as to who gave the loan and who received it.
As observed above, though P.W.11 has deposed before this Court that he is not doing any money lending business and that the Accused-2 had not borrowed any money from him, in Ex.D.5, he has stated about the details of the loans 90 [Spl.C.C.155/2010-J] given by him to the Accused-2 from March 2004 onwards. However, in Ex.D.5, he has also stated that he has not received any loan from the Accused-2 or the CES. On the other hand, in Ex.D.8, as observed above, the Accused-2 has stated that P.W.11 was providing funds to him in need of hour. At Page-22 of Ex.D.3, which contains the Balance Sheet of the CES for the Financial Year 2003-2004, it is stated that the CES received loan of Rs.1.20 Crores from P.W.11 in that Financial Year. In Ex.D.5 also, P.W.1 has admitted about giving of that loan to the CES. But, in Ex.P.22(b) at Page-33, which is the Balance Sheet as on 31.03.2004 relating to P.W.11, without disclosing that loan amount, P.W.11 has shown that amount as 'Bills Receivable from CES'. This fact shows that P.W.11 is in the habit of showing false accounts. On considering all these facts, circumstances and the evidence, the one and only inference that could be drawn is that the loan referred to in the Disputed Document was given by M/s.Binco Constructions Private Limited to the CES and that payments shown in that document were made by the CES to M/s.Binco Constructions Private Limited and that Receipts shown in that document were received by M/s.Binco Constructions Private Limited from the CES.
104. As per Section 69 of the IT Act, investments made by an Assessee in the Financial Year preceding the Assessment Year, which is unaccounted and source of which is not explained by him, is deemed to be the Income of the Assessee for such Financial Year. Similarly, as per 91 [Spl.C.C.155/2010-J] Sections 69A, 69B and 69C of the IT Act, unexplained money, investment and expenditure of the Assessee are deemed to be the Income of the Assessee for such Financial Year, which is taxable under the IT Act.
105. In the case on hand, as observed above, the evidence on record shows that so far as the loan transaction relating to the Disputed Document is concerned, M/s.Binco Constructions Private Limited is the Creditor and that the CES is the Debtor and that outstanding balance payable was Rs.10.20 Crores as on 31.8.2003 and it was reduced to Rs.9,24,83,086/- (Principal of Rs.9,00,00,000/- plus Interest of Rs.24,83,086/-) as on 30.09.2003 in view of repayments made towards Principal and Interest. As such, repayments towards that loan by way of Principal and Interest was Rs.95,16,914/- (Rs,10,20,00,000.00 - Rs.9,24,83,086.00) as on 30.09.2003. As per the evidence available on record, Rs.5,00,000/- each was repaid on 07.10.2003 and 08.10.2003. As such, as on 08.10.2003, the total repayment made towards that loan was Rs.1,05,16,914/- ( Rs.95,16,914/-+10,00,000/-). On the basis of the above materials and the evidence, the following estimate can be made:
1. Outstanding Opening Balance (which includes Principal & Interest as on 31.08.2003), which amounts to Investment by M/s.Binco Constructions: ... Rs.10,20,00,000/-
92 [Spl.C.C.155/2010-J]
2. Receipt of Interest as on 08.10.2003, which amounts to Income to M/s.Binco Constructions: Around Rs. 35,00,000/-
As the said Investment and Receipt of Interest are not accounted and not explained by M/s.Binco Constructions Private Limited, the said Investment and Receipt of Interest, which amounts to Rs.10,55,00,000/- have to be taken as Income of M/s.Binco Constructions Private Limited for the Assessment Year 2004-2005 under Section 69B of the IT Act. Similarly, Rs.1,05,16,914/-, which is the Expenditure made by the CES by way of payment as on 8.10.2003 and which has not been accounted and explained, has to be taken as Income of the CES for the Assessment Year 2004-2005 under Section 69C of the IT Act. As per the Finance Act, 2004, rate of Income Tax payable for the Assessment Year 2004-2005 on the total Income was Rs.35% with Surcharge of Rs.2½ % in case of Firms. As the CES and M/s.Binco Constructions Private Limited are Firms, they were liable to pay Tax and Surcharge at that rate. Hence, at that rate, the Income Tax payable by M/s.Binco Constructions Private Limited on Rs.10,55,00,000/- was Rs.3,69,25,000/- and the Surcharge was Rs.9,23,125/-, i.e., in all Rs.3,78,48,125/-. Similarly, Income Tax payable by the CES on Rs.1,05,16,914/- was Rs.36,80,920/- and the Surcharge was Rs.92,022/-, i.e., in all Rs.37,72,942/-. If the Disputed Document had been considered while assessing the Income of the CES and M/s.Binco Constructions Private 93 [Spl.C.C.155/2010-J] Limited, the CES and M/s.Binco Constructions Private Limited ought to have paid Income Tax of Rs.37,72,942/- and Rs.3,78,48,125/- respectively and in all not less than Rs.4,16,21,067/-. As the Disputed Document was not considered, the Income Tax Department sustained Revenue Loss to the tune of Rs.4,16,21,067/- and correspondingly, the CES gained not less than Rs.37,72,942/- and M/s.Binco Constructions Private Limited gained not less than Rs.3,78,48,125/-. This is the rough estimate in respect of Assessment Year 2004-2005 only.
106. Under Section 263 of the IT Act, Commissioner of Income Tax has revisional jurisdiction against the Assessment Orders. In the case of CIT -Vs- Infosys Technologies Ltd., [(2012) 341 ITR 293(Karn)], relied upon by the learned Advocate appearing on behalf of the Accused-1, it is held as follows:
"The object of the provision is to raise revenue for the State, and Section 263 is an enabling provision conferring jurisdiction on the Commissioner to revise the order of the authorities below in certain circumstances particularly when it is erroneous and prejudicial. The provision is intended to plug leakage to the revenue by erroneous orders passed by the lower authorities, whether by mistake or in ignorance or even design. It makes little difference for what reasons the 94 [Spl.C.C.155/2010-J] order is passed by the lower authority, so long as it becomes erroneous and prejudicial to the interest of the Revenue."
In his Cross-examination, P.W.10 has admitted that he was exercising revision jurisdiction under Section 263 of the IT Act over the Accused-1. He has stated that the Accused-1 did not pass any Order, which required interference under Section 263 of the IT Act. On the basis of the said answer and by relying upon the above decision in the case of CIT -Vs- Infosys Technologies Ltd., the learned Advocate appearing on behalf of the Accused-1 has argued that as the jurisdictional Commissioner himself has taken a view that the Accused-1 has not passed any Order, which required interference under Section 263 of the IT Act, it is clear that there is no loss of revenue due to the Assessment Order passed by the Accused-1 relating to the CES for the Assessment Year 2004-2005 for which, the Disputed Document is related to.
107. Ex.D.10 is the Revenue Audit Report submitted under Article-149 of the Constitution of India, by examining the assessment records relating to the CES for the Assessment Year 2004-2005. In his Cross- examination, P.W.1 has deposed that the said Report shows short levy of tax to an extent of Rs.2.71 Lakhs and that there is no other mention of revenue loss as per that Report. On the basis of the said answer and contents of Ex.D.10, the learned Advocate appearing on behalf of the Accused-1 has contended that no revenue loss as 95 [Spl.C.C.155/2010-J] contended by the Complainant is occurred due to the Assessment Order passed by the Accused-1 in respect of the CES.
108. As observed above, the Assessment Order passed by the Accused-1 does not show reference to the Disputed Document. There is nothing to show that the Disputed Document was brought to the notice of P.W.10 for exercising revision power under Section 263 of the IT Act. So also, there is nothing to show that the Disputed Document was brought to the notice of Audit Party at the time of the Audit. As such, there was no occasion to P.W.10 or the Audit Party to consider the Disputed Document and to examine the Assessment Order passed by the Accused-1 with reference to the Disputed Document. If at all P.W.10 and the Audit Party had examined the Disputed Document, they would have known the real facts. As they had no such an opportunity to examine the Disputed Document, they have not said about the actual revenue loss sustained by the Income Tax Department for not considering the Disputed Document. Under these circumstances, it is not fit to accept the bare argument of the learned Advocate appearing on behalf of the Accused-1 that there is no such revenue loss to the Income Tax Department as contended by the Complainant due to return of the Disputed Document.
109. The learned Advocate appearing on behalf of the Accused-1 has relied upon the decisions in the cases of Major S.K.Kale -Vs- State of Maharashtra [1977 96 [Spl.C.C.155/2010-J] Crl.L.J.604], S.P.Bhatnagar -Vs- State of Maharashtra [1979 Crl.L.J.566] and M.Rajashekaran
-Vs- The Inspector of Police [Crl.P.No.4185/2001 dated 31.01.2003] to substantiate his argument that as none of the witnesses examined by the Complainant has deposed about loss suffered or gain occurred due to return of the Disputed Document, the Complainant has failed to make out its case. In the 1st case, the Trial Court had wrongly placed onus of proof regarding abuse of official position on the Accused instead of the Prosecution. In the 2nd case, the Prosecution failed to examine some material witnesses and the circumstantial evidence on record was not conclusive as to guilt of the Accused. In the 3rd case, only on the basis of Order passed by the Appellate Authority setting aside the Order of the Accused, the CBI had registered a case for the offence punishable under Section 120-B r/w. Section 420 of the IPC. As there was no other material against the Accused of that case, the Hon'ble High Court of Karnataka quashed the FIR filed in that case. All these facts and circumstances of the cases relied upon by the learned Advocate appearing on behalf of the Accused-1 and questions involved in those cases are entirely different from those of the case on hand and as such, they are of no assistance to substantiate the arguments advanced on behalf of the Accused-1.
110. As observed above, for not considering and appreciating the contents of the Disputed Document for assessment of tax relating to the CES and M/s.Binco 97 [Spl.C.C.155/2010-J] Constructions Private Limited, the Income Tax Department has sustained revenue loss to the tune of not less than Rs.4,16,21,067/- for the Assessment Year 2004-2005. As observed above, the Disputed Document contained other sheets of calculation apart from the Statement of Account. As observed above, the said document was required for the Assessment Years 2005-2006 to 2007-2008 also, for which the Accused-1 and 3 had obtained permission to retain the Disputed Document. As the Accused-1 returned that document even prior to passing of Assessment Orders pertaining to the Assessment Years 2005-2006 to 2007- 2008, there was no opportunity to consider and examine the Disputed Document for those Assessment Years. If that document was considered for those Assessment Years also, definitely there was chance of detecting some more revenue loss also as the evidence on record indicates about suppression of real facts by the CES as well as M/s.Binco Constructions Private Limited. For all these reasons, it is clear that due to return of the Disputed Document fraudulently and dishonestly without even keeping a Copy of it as per practice and due to making of false record and report by the Accused-1 and 3, the Income Tax Department has sustained huge wrongful loss to an extent of more than Rs.4,00,00,000/-, which became a wrongful gain to the CES as well as M/s.Binco Constructions Private Limited. Except as Officers of the Income Tax Department, the Accused-1 and 3 had no other relationship with the Accused-2, the CES, M/s.B.N. Group of Companies and their representatives. As such, 98 [Spl.C.C.155/2010-J] except to obtain pecuniary advantage for themselves, there could not be any other purpose or motive or intention for the Accused-1 and 3 in saving the huge tax liability to the CES as well as M/s.Binco Constructions. Hence, it has to be inferred that the Accused-1 & 3 have also obtained pecuniary advantage by misusing their position as public servants in helping the CES as well as M/s.Binco Constructions to save their huge tax liability.
4. Additional Grounds Of Law Urged By The Accused-1
111. The case on hand was registered by Sri.Narasimha Komar, the then Superintendent of Police, CBI, ACB, Bengaluru, on the basis of 'Source Information'. Except registration of the case and handing over the investigation to P.W.15, said Sri.Narasimha Komar did not do anything in this case. As his evidence is formal in nature, the Complainant did not examine that person as witness in this case. The learned Advocate appearing on behalf of the Accused-1 has contended that as Sri.Narasimha Komar did not come forward to substantiate the allegations in the FIR, the FIR has no legs to stand on and that as such, non-examination of that witness has caused great prejudice to the Accused-1 and 3. In support of that argument, the learned Advocate appearing on behalf of the Accused-1 has relied upon a decision in the case of Sarju Ghorel & Others -Vs- State of Bihar (now Jharkand) (2006 Cr.L.J.1885). In that case, it was alleged that on the ground that the Assistant Sub-
99 [Spl.C.C.155/2010-J] Inspector had received information about the offence, gone to the spot and recorded statement of the Complainant. But, the evidence on record created a serious doubt about the said fact. The Accused of that case called for Station House Diary to ascertain as to whether the Assistant Sub-Inspector had made a Note in that Diary about receiving of information. But, Prosecution did not produce that Diary and did not examine the Assistant Sub-Inspector. There was also delay in dispatching the FIR to the Court in that case. Under such circumstances, the Court held in that case that non- production of Station House Diary and non-examination of the Assistant Sub-Inspector, who recorded the Statement, were fatal to the Prosecution case and that it was difficult to accept the Prosecution version that the incident took place as contended by it. In the case on hand, except registering a case and handing over the investigation to P.W.15, Sri.Narasimha Komar has not done any other act and his evidence is of formal in nature. P.W.15 has conducted investigation and he has given his evidence. Non-examination of Sri.Narasimha Komar has not caused any prejudice to the Accused-1 and 3. Even otherwise, merely because the said formal witness is not examined, other acceptable evidence available on record cannot be discarded. Facts, circumstances and questions involved in the decision relied upon by the learned Counsel appearing on behalf of the Accused-1 are entirely different from those of the case on hand. As such, the said decision is of 100 [Spl.C.C.155/2010-J] no assistance to the learned Advocate appearing on behalf of the Accused-1 to substantiate his arguments.
112. The learned Advocate appearing on behalf of the Accused-1 has also relied upon a decision in the case of Eli -Vs- State (Judgment of Madras High Court in Crl.R.C.No.336/2009). In that case, the victim- Complainant was not examined and the evidence of 2 witnesses was contradictory to each other and to the case of the Complainant. Under such circumstances, for not examining the victim-Complainant, the Hon'ble High Court gave benefit of doubt to the Accused. The said facts and questions involved in that case are also entirely different from those of the case on hand. As such, the said decision is also of no assistance to the learned Advocate appearing on behalf of the Accused-1.
113. By relying upon a decision in the case of C.K.Jaffer Sharief -Vs- State (2013 Crl.L.J. 341), wherein it is held that to make a person criminally accountable, it must be proved that, an act, which is forbidden by law, has been caused by his conduct, the learned Advocate appearing on behalf of the Accused-1 has contended that as the Complainant did not come forward to substantiate the allegations in the Complaint, it has to be held that the case against the Accused is not proved. As observed above, Sri.Narasimha Komar is a formal witness, who just registered the case and handed over the case for further investigation. Though he did not 101 [Spl.C.C.155/2010-J] come forward to depose about his act in registering the FIR, the evidence available on record, as observed above, amply prove the allegations in the Complaint. As observed above, merely because Sri.Narasimha Komar did not come forward to give evidence, the other evidence available on record cannot be discarded. Hence, it is not fit to accept the argument advanced by the learned Advocate appearing on behalf of the Accused-1.
114. The learned Advocate appearing on behalf of the Accused-1 has relied upon a Judgment in ITA No.435/2003 C/W 436/2003 of the Hon'ble High Court of Karnataka in the case of the Commissioner of Income Tax & Another -V/s- Ramakrishna Nursing Home, wherein it is held that, in the course of Assessment Proceedings, the Assessing Officer adopts Inquisitorial System. According to that System, the Assessing Officer himself investigates, prosecutes and also judges the issue. There is no dispute about the said procedure to be adopted by the Assessing Officer. But, in the case on hand, the Accused-1 has failed to investigate, prosecute and judge the issue relating to the Disputed Document as required under law. The said decision does not in any way assist the case of the Accused-1.
115. By relying upon Section 293 of the IT Act, the learned Advocate appearing on behalf of the Accused-1 has contended that as the acts of passing Assessment Order and returning the Disputed Document by the 102 [Spl.C.C.155/2010-J] Accused-1 have been done in good faith, his acts are protected and that as such, he is not liable for prosecution for those acts. It is no doubt true that under Section 293 of the IT Act, Prosecution, Suit or other Proceeding shall not lie against Officer of the Government for anything done in good faith or intended to be done under the IT Act. But, non-consideration of a vital document, knowing fully well that it was disclosing chargeable Income Tax to an extent of Crores of rupees, while passing Assessment Order and returning of that vital document, without even keeping a Copy of it, though that document was necessary for examination in other proceedings also and making a false report about that document cannot be said as the acts done in good faith or intended to be done in good faith. On the other hand, the evidence on record shows fraudulent and dishonest intention of the Accused-1 and 3 to keep away that document from consideration for the purpose of Income Tax. Hence, it is not fit to accept the arguments of the learned Advocate appearing on behalf of the Accused-1 that the Accused-1 is not liable for prosecution by virtue of Section 293 of the IT Act.
5. Additional Grounds Of Law Urged By The Accused-3
116. The learned Advocate appearing on behalf of the Accused-3 has relied upon a decision in the case of C.Sukumaran -Vs- State of Kerala [2015 AIR SCW 951], wherein it is held that, burden to prove accusation against the Accused with regard to demand and 103 [Spl.C.C.155/2010-J] acceptance of gratification lies on the Prosecution. In that case, the Prosecution had failed to discharge that burden. Apart from that, in that case, it was alleged that the Accused had kept bribe money in his Shirt Pocket. But, sample of that Shirt pocket section did not show any change of colour. Under such circumstances, the Hon'ble Supreme Court of India acquitted the Accused. Facts, circumstances and questions involved in that case are totally different from those of the case on hand. As such, the said decision is of no assistance to the Accused-3 in any manner.
117. Similarly, in the case of P.Satyanarayana Murthy -Vs- District Inspector of Police & Another [2015 AIR SCW 5263], relied upon by the learned Advocate appearing on behalf of the Accused-3, the Prosecution had failed to prove the factum of demand of bribe by the Accused and as such, the Hon'ble Supreme Court of India held that it would be wholly unsafe to sustain the conviction of the Accused. Such a question was not involved in this case. The facts, circumstances and questions involved in that case are entirely different from those of the case on hand. As such, the said decision is also of no assistance to the learned Advocate appearing on behalf of the Accused-3 to substantiate his arguments.
118. The learned Advocate appearing on behalf of the Accused-3 has also relied upon the decisions in the cases of M.Rajashekaran -Vs- The Inspector of Police 104 [Spl.C.C.155/2010-J] [Crl.P.No.4185/2001 dated 31.01.2003], S.P.Bhatnagar
-Vs- State of Maharashtra [1979 Crl.L.J.566] and C.K.Jaffer Sharief -Vs- State (2013 Crl.L.J. 341), which have been relied upon by the Accused-1 also. As observed above, facts, circumstances and questions involved in those cases are entirely different from those of the case on hand. As such, the said decisions are also of no assistance to the Accused-3 in any manner.
119. Case of R.Manthra Murthy -Vs- State of Karnataka [Judgment dated 11.12.2015 passed by the Hon'ble High Court of Karnataka in Crl.Appeal No.987/1999] and the decision in the case of R.Srinivasan and Another -Vs- State by Police Inspector, Lokayuktha, Bengaluru [2016(1) KCCR 815] relied upon by the learned Advocate appearing on behalf of the Accused-3, relate to an offence punishable under Sections 7 and 13(2) of the PC Act. In those cases, on the ground that the Prosecution has failed to prove the foundational facts to draw presumption available under Section 20 of the PC Act and that there was no scope for the Accused to do any official favour to the Complainant and that the evidence regarding demand and acceptance of bribe by the Accused was not acceptable, the Hon'ble High Court of Karnataka has set aside the Judgments of conviction passed by the Trial Court. The facts, circumstances and question of law involved in those cases are totally different from those of the case on hand. As 105 [Spl.C.C.155/2010-J] such, the said decisions are also of no assistance to the Accused-3.
120. The case of Mahadeo Bhau Khilare (Mane)
-Vs- State of Maharashtra and others [(2007) 5 Supreme Court Cases 524], relied upon by the learned Advocate appearing on behalf of the Accused-3, relates to regularization of unpaid assistants engaged by the employees of the State. The case of Jharkand and Others -Vs- Jitendra Kumar Srivastava [Civil Appeal No.6770/2013, dated 14.08.2013], relied upon by the learned Advocate appearing on behalf of the Accused-3, relates to withholding a part of pension and/or gratuity of an employee during pendency of Departmental/Criminal Proceedings. Facts, circumstances and the questions involved in those cases are also entirely different from those of the case on hand. As such, the said decisions are of no assistance to the Accused-3 in any manner.
121. The learned Advocate appearing on behalf of the Accused-3 has contended that as the Investigating Officer did not take permission from the Court for investigating the IPC offences, prosecution of the Accused- 1 and 3 in respect of the IPC offences is not maintainable. In support of his contention, he has relied upon a decision in the case of Christy Fried Gram Industry, Bengaluru and Another -Vs- State of Karnataka and Others, reported in 2016 Crl.L.J.482, wherein at Para-47, it is observed as follows:
106 [Spl.C.C.155/2010-J] "As per Section 4(3) of the Prevention of Corruption Act, the Special Judge is empowered to try an offence under Prevention of Corruption Act. Section 17 of the PC Act permits the Police official to investigate the offences punishable only under PC Act. For investigating other offences i.e., IPC offences, the Police officials are mandated to obtain permission from the Special Judge. This procedure has not been followed in this case which clearly establishes that without the Orders of the Special Judge, the Police Officers investigated the other offences, which is illegal and gross violation of law."
122. On the other hand, the learned Public Prosecutor has contended that though under the Karnataka Lokayukta Act, Police Officers have no power to investigate the IPC offences, by virtue of Notifications issued under Sections 3, 5 and 6 of the Delhi Special Police Establishment Act, the CBI Officers have power to investigate the IPC offences and that as such, question of obtaining permission from the Special Judge to investigate the IPC offences does not arise.
123. In the above case, relied upon by the learned Advocate appearing on behalf of the Accused-3, criminal proceedings initiated by the Karnataka Lokayukta Police were sought to be quashed. In that case, though the 107 [Spl.C.C.155/2010-J] offences alleged were falling under Food Safety and Standards Act, 2006, without invoking the provisions and complying the procedure of the said Act, Lokayukta Police registered a case under the IPC offences even without bringing to the notice of Lokayukta or Upalokayukta as per Rule-5(3) of the Karnataka Lokayuktha Rules, 1985.
Though some of the Accused were not Public Servants and though the offences alleged were not punishable under Sections 7 and 11 of the PC Act, provisions of the PC Act were invoked against those Accused. The allegations against the Accused were relating to breach of contract for supply of substandard food, which were civil in nature only and did not attract the penal provisions to initiate criminal action against them. Though, in the initial stage, Dy.S.P., started investigation in that case, later Inspector of Lokayukta took over investigation. Under Section 17 of the PC Act, Inspector of Lokayukta being an Officer below the rank of Dy.S.P., had no power even to investigate any offence under the provisions of the PC Act without an Order from the Metropolitan Magistrate or the Magistrate of First Class. Sections 7, 8 and Second Schedule of the Karnataka Lokayukta Act, 1986 deal with the matters, which can be investigated under the provisions of the Karnataka Lokayukta Act, 1986. The said Sections and Schedule do not empower the Lokayukta Officers to investigate the IPC offences. Though, preliminary enquiry had to be completed within 7 days as per the decision in the case of State of U.P., -Vs- Bhagawant Kishore Joshi, reported in AIR 1964 SC 221, the Inspector took 108 [Spl.C.C.155/2010-J] 18 months for completing preliminary enquiry and submitting report and there was inordinate delay in lodging FIR. Under such circumstances, the Hon'ble High Court of Karnataka quashed the criminal proceedings among other grounds and by also observing that the Police Officer, who investigated the case, had no power to investigate the offences without Order from the Special Judge.
124. But, as per the Notifications issued by the Central Government under Sections 3, 5 and 6 of the Delhi Special Police Establishment Act, 1946, CBI Officers are empowered to investigate all types of cases under different State and Central Acts including cases involving IPC offences relating Central Government Servants or Officers belonging to Public Sector Undertaking under the Central Government. As the CBI Officers are empowered by virtue of Sections 3, 5 and 6 of the Delhi Special Police Establishment Act, 1946 to investigate IPC offences also, question of taking permission from the Court or Special Judge for investigating IPC offences does not arise at all. Such a power is not given to the Officers of the Karnataka Lokayukta. As the facts, circumstances and the questions involved in the decision relied upon by the learned Advocate appearing on behalf of the Accused-3 are entirely different from those of the case on hand, the said decision is of no assistance to the Accused-3 and hence, it is not fit to accept the argument advance on behalf of the Accused- 3 with reference to the said decision.
109 [Spl.C.C.155/2010-J]
6. Conclusion
125. The learned Advocates appearing on behalf of the Accused-1 and 3 have strongly contended that the allegations made against the Accused-1 and 3 are not proved by the Complainant beyond reasonable doubt, they are entitled to benefit of doubt and that as such, they cannot be held as guilty of the offences charged against them.
126. Section 3 of the Indian Evidence Act, 1872 has defined the expressions-'fact', 'facts in issue', 'relevant fact', 'evidence', and 'proved'. The said definitions are as under:
'fact':
(1) Any thing, state of things or relation of things, capable of being perceived by the senses, (2) Any mental condition of which any person is conscious.
'facts in issue':
Any fact from which, either by itself or in connection with other facts, the existence, non-existence, nature or extent of any right, liability or disability, asserted or denied in any suit or other proceeding, necessarily follows".
'Relevant fact':
One fact is relevant to another when the one is connected with the other in any of the ways referred to in the provisions of this Act relating to relevancy of facts.
110 [Spl.C.C.155/2010-J] 'Evidence':
All oral statements permitted or required to be made before Court in relation to matters of fact under enquiry, as also all documents produced for inspection of the Court.
'Proved':
A fact is said to be proved when, after considering the matters before it, the court either believes to exist, or considers its' existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.
The expression-'Disproved' is also defined in a similar way, except that the Courts' belief or probability is that the disputed fact does not exist.
The expression-'not proved' is also defined in the Evidence Act, 1872 as "A fact is said not to be proved, when it is neither proved nor disproved."
127. Sections 6 to 23, 27 to 29, 32 to 38, 40 to 55 of Chapter-II of the Indian Evidence Act, 1872 deal with relevancy of facts and Sections 24 to 26, 30 and 39 deal with the facts, which are not relevant.
128. On careful study of the definitions, referred to above, it reveals that those definitions apply irrespective of whether the case under trial is a Civil Case or a Criminal Case. Those definitions do not expressly or impliedly indicate that the said definitions apply only to civil cases or 111 [Spl.C.C.155/2010-J] they do not apply to the criminal cases. In the case of Chaudhary Razik Ram -Vs- Chaudhary Jaswant Singh, reported in AIR 1975 SC 667, the Hon'ble Supreme Court of India has held as follows:-
"It is true that there is no difference between the general rules of evidence in Civil and Criminal Cases and the definition of 'proved' in Section 3 of the Evidence Act, does not draw a distinction between Civil and Criminal Cases."
As such, on considering the definitions and provisions, referred to above, as well as the law laid down by the Hon'ble Supreme Court of India referred to above, it is clear that the said definitions and provisions are equally applicable to the Civil as well as Criminal Cases.
129. On careful analysis of the definition of expression -'proved', it is clear that it is in 2 parts. Under the first part, the Court 'believes' that a disputed fact exists. The second part refers to a situation, where the Court considers the existence of the disputed fact "so probable that a prudent person ought, under the circumstances of the particular case, to act upon the supposition that the fact exists." The expression-'so probable' is otherwise termed as 'preponderance of probability'. As such, it is clear that the Court, not being an eyewitness, is required to consider the matters before it and arrive at a conclusion about existence of the disputed 112 [Spl.C.C.155/2010-J] fact, based upon its own 'belief' or 'preponderance of probability' as a prudent person ought to find.
130. In the case of M.G.Agarwal-Vs-State of Maharashtra, reported in AIR 1963 SC 200, the Accused-1 to 3 were Charged for the offence punishable under Sections 120B, 467 and 471 of the IPC and Section 5(2) of the Prevention of Corruption Act alleging that the Accused conspired to issue and did issue false Income Tax Refund Orders in the names of non-existent persons, forged signatures of those non-existent persons, collected money covered by the Refund Orders and misappropriated the same. The Trial Court acquitted the Accused-1 and 2 of all the Charges and convicted the Accused-3 for the offence punishable under Sections 467 and 471 of the IPC and Section 5(2) of the Prevention of Corruption Act, however, acquitted him of the Charge punishable under Section 120B of the IPC. But, in the Appeal filed against the said Judgment, the Hon'ble High Court held that the Charge under Section 120B of the IPC was proved beyond reasonable doubt against all the Accused and convicted them for the said offence. The Hon'ble High Court also convicted the Accused-2 for the offence punishable under Sections 467 and 471 of the IPC and Section 5(2) of the Prevention of Corruption Act. The case of the Complainant was based entirely on circumstantial evidence and those circumstances are as under:-
1) established office procedure;
2) office duties assigned to all the Accused;
113 [Spl.C.C.155/2010-J]
3) verifications of various matters, which had to be conducted by the Accused and which were not conducted;
4) statements of the Accused during departmental enquiry;
5) the role played by each of the Accused in relation to the incriminating documents;
6) the falsity of the case set up by the Accused-1 that the Accused-3 destroyed documents, which would have shown that the Refund Orders were true and genuine;
7) the modus operandi adopted by all the Accused as seen from the proved office records;
8) non-existence of the alleged assesses in whose favour refund orders had been issued;
9) though all the alleged assessees being new assessees, absence of any enquiry being conducted by the Accused-1 before passing the Refund Orders;
10) nature of income purported to be disclosed in the alleged Returns;
11) the fact that in respect of Returns for such income, no Refund could be legally allowable under the particular statutory provision;
12) absence of Assessment Orders in most of the cases; and 114 [Spl.C.C.155/2010-J]
13) absence of entries showing advance payment of tax in some instances and absence of cancellation of certain papers required to be made under law etc. When the Accused-1 to 3 of that case approached the Supreme Court, the Constitution Bench considered the principles of Criminal Jurisprudence and Law of Evidence regarding the manner of proof of 'circumstances' or 'basic facts' and the basis on which circumstantial evidence could lead to the finding of guilt of the Accused and held as follows:-
"....it is necessary to distinguish between facts which may be called primary or basic on the one hand and inference of facts to be drawn from them on the other. In regard to the proof of basic or primary facts, the court has to judge the evidence in the ordinary way, and in the appreciation of evidence in respect of basic or of primary facts there is no scope for the application of the doctrine of benefit of doubt. The Court considers the evidence and decides whether the evidence proves a particular fact or not. When it is held that a certain fact is proved, the question arises whether the fact leads to an inference of guilt of the Accused person or not and in dealing with this aspect of the problem, the doctrine of benefit of doubt
115 [Spl.C.C.155/2010-J] would apply and an inference of guilt can be drawn only if the proved fact is wholly inconsistent with the innocence of the Accused and is consistent only with his guilt. It is in the light of this legal position that the evidence in the present case has to be appreciated."
(Underlined by this Court) Similar view is taken in the cases of G.Parshwanath
-Vs- State of Karnataka reported in AIR 2010 SC 2914, Kishore Chand-Vs-State of Himachal Pradesh, reported in AIR 1990 SC 2140 and Balu Sonba Shinde
-Vs- State of Maharashtra, reported in AIR 2002 SC 3137. In view of the law laid down by the Apex Court, as observed above, it is clear that the requirement of 'proof beyond reasonable doubt' does not apply to proof of 'basic or primary facts' in Criminal Cases or to defence in Criminal Cases and that those facts can be proved in the ordinary way as explained in Section 3 of the Indian Evidence Act, 1872. In order to show that the Accused is guilty of an offence, those proved facts must lead to an inference of guilt of the Accused beyond reasonable doubt and while drawing such an inference, the doctrine of benefit of doubt would apply.
131. In the case on hand, on considering all the facts, circumstances, evidence and position of law, it is clear that the Complainant has proved the following facts:-
116 [Spl.C.C.155/2010-J] I. The Disputed Document, being a key and vital document, was showing huge taxable income assessable to the CES and M/s.Binco Constructions;
II. The Accused-1 fraudulently and dishonestly did not consider the Disputed Document and taxable income shown in that document for the purpose of assessing the tax liability of the CES for the Assessment Year 2004-2005, which resulted revenue loss to the tune of not less than Rs.37,72,942/- to the Income Tax Department and corresponding wrongful gain to the CES;
III. Though the Disputed Document was necessary for examining the tax liability of the CES for the Assessment Years 2005-2006 to 2007-2008, the Accused-1 fraudulently and dishonestly returned that document to the Assessee even without keeping a Copy of it by violating the practice, procedure and direction of the Accused-3 and thereby prevented to consider that document for those Assessment Years, which also has resulted in revenue loss to the Income Tax Department and corresponding gain to the CES;
117 [Spl.C.C.155/2010-J]
IV. Though the Disputed Document was
relevant and necessary for examining the tax liability of M/s.Binco Constructions and though the Accused-1 and 3 did not send that document to the concerned Assessing Officer, they have fraudulently and dishonestly made a false record and report to the effect that the Disputed Document was sent to the concerned Assessing Officer and that it was examined by him. As the Disputed Document was showing huge taxable income and as it was not available for examining the tax liability of M/s.Binco Constructions, Income Tax Department has suffered huge loss of revenue to the tune of not less than Rs.3,78,48,125/-
and corresponding wrongful gain to M/s.Binco Constructions; V. Though the Disputed Document was
showing huge taxable income pertaining to the CES, the Accused-1 and 3 have dishonestly and fraudulently made a false record to the effect that the said document had no relevance to the business activities of the Assessee, which is an inducement to the Income Tax Department for returning the Disputed Document, which has resulted in saving 118 [Spl.C.C.155/2010-J] the huge tax liability to the CES as well as M/s.Binco Constructions;
VI. The Accused-1 and 3 were Public Servants and they abused their position as Public Servants by doing the above illegal acts and thereby obtained pecuniary advantage for the CES, to which the Accused-2 was the Chairman, and also for M/s.Binco Constructions, to which P.W.11 was the Managing Director, to the tune of not less than Rs.4,16,21,067/-;
VII. The Accused-1 & 3 have also obtained pecuniary advantage by misusing their position as public servants in helping the the CES as well as M/s.Binco Constructions to save their huge tax liability;
VIII. Without prior meeting of minds of the concerned persons, it is impossible to do the illegal acts referred to above.
Discussion, which is referred to by the Accused-1 and 3 in Ex.P.1(u) and Ex.P.1(x) in the presence of Assessees, and other facts and circumstances of the case, which show illegal and unlawful acts of the Accused-1 and 3, as observed 119 [Spl.C.C.155/2010-J] above, clearly indicate such a meeting of minds and agreement between the Accused-1 to 3 and all other concerned persons of the CES and M/s.Binco Constructions for doing illegal acts.
132. From the above said proved facts, the one and only inference that could be drawn is that the Accused-1 and 3 entered into an agreement with the Accused-2 and all other concerned persons of the CES and M/s.Binco Constructions to Cheat the Income Tax Department within the meaning of Criminal Conspiracy defined under Section 120-A of the IPC, which is punishable under Sections 120-B r/w. 420 of the IPC; and that in pursuance of that Criminal Conspiracy, the Accused-1 and 3 prepared a false record to save the huge tax liability of the CES and M/s.Binco Constructions Private Limited, which is punishable under Section 218 of the IPC and that the Accused-1 and 3 cheated the Income Tax Department dishonestly inducing to deliver the key document to the Accused-2, which has resulted in wrongful loss of revenue to the extent of not less than Rs.4,16,21,067/- to the Income Tax Department, which is an offence punishable under Section 420 of the IPC and that the Accused-1 and 3 obtained pecuniary advantage for themselves as well as the CES and M/s.Binco Constructions by misusing their position as Public Servants within the meaning of Criminal Misconduct defined under Section 13(1)(d)(ii) of the PC Act, which is punishable under Section 13(2) of the PC Act.
120 [Spl.C.C.155/2010-J] All these proved facts are wholly inconsistent with the innocence of the Accused-1 and 3 as contended by them and on the other hand, they are consistent only with their guilt. In the said evidence placed on record by the Complainant, it is not possible to pin point any doubt, which cuts the root of the case of the Complainant. As such, question of giving benefit of doubt to the Accused-1 and 3 does not arise. For all these reasons, it is clear that the Accused-1 and 3 are guilty of the offences punishable under Sections 120-B r/w.420, 218 and 420 of the IPC and Sections 13(2) r/w.13(1)(d)(ii) of the PC Act and accordingly, Points-2 to 5 are answered in the Affirmative.
POINT-6
133. In view of the affirmative findings given on the Points-1 to 5, it is clear that the Accused-1 and 3 are guilty of the offences punishable under Sections 120-B r/w.420, 218 and 420 of the IPC and Sections 13(2) r/w. 13(1)(d)(ii) of the PC Act. Hence, they are liable for conviction and punishment for those offences. In the result, the following Order is passed:
ORDER
1. Under Section 248(2) of the Cr.P.C., 1973, the Accused-1 and 3 are convicted for the offences punishable under Sections 120-B r/w.420, 218 and 420 of the Indian Penal Code, 1860 and Sections 13(2) r/w.
121 [Spl.C.C.155/2010-J]
13(1)(d)(ii) of the Prevention of
Corruption Act, 1988.
2. Sentence will be passed after hearing the Accused-1 and 3 on the question of sentence.
(Dictated to Judgment Writer, transcribed by her, revised, corrected and then pronounced by me in the Open Court on this the 30th day of July 2016.) (ASWATHA NARAYANA) XLVII Additional City Civil & Sessions Judge and Special Judge for CBI Cases, Bengaluru.
(P.T.O.) 122 [Spl.C.C.155/2010-J] Again called. The following Order on the question of sentence is pronounced:
ORDER ON SENTENCE
134. Heard the learned Public Prosecutor, the Accused-1 and 3 and their Counsels regarding sentence to be imposed on the Accused-1 and 3. Records Perused.
135. The learned Advocate appearing on behalf of the Accused-1 submitted that the Accused-1 is retired from service and that he being a senior citizen is a first offender, he has no criminal background, he is having wife and children, he has already suffered punishment by attending the Court since 2010 and that as such, lenient view may be taken while imposing sentence on the Accused-1. The learned Advocate appearing on behalf of the Accused-3 submitted that the Accused-3 is still in service, he is also a first offender, he has also no criminal background, he is having wife and a specially disabled son to be taken care of constantly, he has also already suffered punishment by attending the Court since 2010, the alleged beneficiary in respect of this case i.e., the Accused-2 is dead and that if the Accused-3 is sentenced to imprisonment, he will lose his job and that thereby he and his family members will be put to great hardship and loss and that as such, lenient view may be taken while imposing sentence on the Accused-3. On the other hand, the learned Public Prosecutor submitted that as the Accused-1 and 3 being the Senior Officers of the Income Tax have committed grave economic offence with high
123 [Spl.C.C.155/2010-J] disregard to their office by helping the Accused-2 and M/s.Binco Constructions in avoiding tax, which has caused huge revenue loss to the Income Tax Department, they are not entitled to any lenience and that maximum punishment provided in the Sections has to be imposed on them.
136. In the case of State of Madhya Pradesh -Vs- Shambhu Dayal Nagar, reported in (2006) 8 SCC 693, the Hon'ble Supreme Court of India rejected the prayer for leniency in sentence in respect of an offence punishable under the Prevention of Corruption Act, 1988 by holding as under:
"The corruption by public servants has become gigantic problem, large scale of corruption retards the nation building activities and every one has to suffer on that count and that the efficiency in public service would improve only when the public servant does his duty truthfully and honestly".
137. In the case on hand, the Accused-1 and 3 have committed the offences punishable under Sections 120-B r/w. 420, Section 218 and Section 420 of the Indian Penal Code, 1860 and Sections 13(2) r/w. 13(1)(d) of the Prevention of Corruption Act, 1988. The Accused-1 was working as Deputy Commissioner of Income Tax and the Accused-3 was working as Additional Commissioner of 124 [Spl.C.C.155/2010-J] Income Tax. By abusing their position as Public Servants, they conspired criminally with the Accused-2 and others for the purpose of cheating, cheated by making false record and returning a key document and thereby officially favoured the Accused-2 and M/s.Binco Constructions by saving their tax liability to the tune of not less than Rs.4 Crores and causing corresponding huge loss to the Income Tax Department. They are also benefited from the said illegal acts. Tax is a main source of income to the Country. Tax collection and prevention of tax evasion are very important in nation building activities. Lapses in this regard affect the nation economically, which retards the nation building activities. As such, role of the Tax Officers is very significant. Though it is the sacrosanct duty of the Accused-1 and 3 to prevent evasion of tax and to collect tax promptly, they have colluded with the Accused-2 and others for the purpose of giving tax benefit to them illegally. Joining hands by the Officers like the Accused-1 and 3 with the tax evaders is nothing but betraying the nation. Thus, the offences committed by the Accused-1 and 3 are very grave and serious.
138. On considering all the above facts and circumstances, nature and gravity of the offences that the Accused-1 and 3 have committed, it is not a fit case to show leniency to them in imposing punishment. If any such leniency is shown, a wrong message will go to the Society to the effect that, it is possible to escape from the punishment even after committing serious and grave offences also. Such a wrong message will have serious 125 [Spl.C.C.155/2010-J] repercussions on the Society in these hard days, where there is severe increase in the crime rate especially relating to corruption and economic offences.
139. However, the Accused-1 and 3 are attending the Court since 2010. By doing so, they have suffered some punishment already. Having regard to this fact, nature and gravity of the offences committed by the Accused-1 and 3, their status and all other facts and circumstances of the case, it appears that the ends of justice would be met if each of the Accused-1 and 3 are sentenced as follows:
1. To undergo Rigorous Imprisonment for a period of 6 months and to pay fine of Rs.1,00,000/- and in default to pay fine, to undergo Simple Imprisonment for a period of one month, for the offence punishable under Sections 120-B r/w.420 of the IPC, 1860;
2. To undergo Rigorous Imprisonment for a period of 1½ years and to pay fine of Rs.1,50,000/- and in default to pay fine, to undergo Simple Imprisonment for a period of three months, for the offence punishable under Section 218 of the IPC, 1860;
3. To undergo Rigorous Imprisonment for a period of 5 years and to pay fine of 126 [Spl.C.C.155/2010-J] Rs.2,50,000/- and in default to pay fine, to undergo Simple Imprisonment for a period of one year, for the offence punishable under Section 420 of the IPC, 1860;
4. To undergo Rigorous Imprisonment for a period of 5 years and to pay fine of Rs.2,50,000/- and in default to pay fine, to undergo Simple Imprisonment for a period of one year, for the offence punishable under Sections 13(2) r/w.13(1)(d)(ii) of the Prevention of Corruption Act, 1988.
140. In the result, the following Order is passed:
ORDER Under Section 248(2) of the Cr.P.C., 1973, the Accused-1 and 3 are convicted and sentenced as under:
1. The Accused-1 and 3 each shall undergo Rigorous Imprisonment for a period of 6 months and to pay fine of Rs.1,00,000/- and in default to pay fine, to undergo Simple Imprisonment for a period of one month, for the offence punishable under Sections 120-B r/w.420 of the IPC, 1860;
127 [Spl.C.C.155/2010-J]
2. The Accused-1 and 3 each shall undergo Rigorous Imprisonment for a period of 1½ years and to pay fine of Rs.1,50,000/- and in default to pay fine, to undergo Simple Imprisonment for a period of three months, for the offence punishable under Section 218 of the IPC, 1860;
3. The Accused-1 and 3 each shall undergo Rigorous Imprisonment for a period of 5 years and to pay fine of Rs.2,50,000/- and in default to pay fine, to undergo Simple Imprisonment for a period of one year, for the offence punishable under Section 420 of the IPC, 1860;
4. The Accused-1 and 3 each shall undergo Rigorous Imprisonment for a period of 5 years and to pay fine of Rs.2,50,000/- and in default to pay fine, to undergo Simple Imprisonment for a period of one year, for the offence punishable under Sections 13(2) r/w.13(1)(d)(ii) of the Prevention of Corruption Act, 1988.
5. Sentences of imprisonment in respect of all the offences shall run concurrently.
128 [Spl.C.C.155/2010-J] M.O.1-Hard Disc be returned to the Income Tax Department after expiry of the time fixed for filing Appeal.
Furnish free Copy of the Judgment to the Accused- 1 and 3 forthwith.
Send a copy of this Judgment to the Director General of Income Tax (Investigation), Bengaluru to take appropriate steps for proper assessment of tax relating to the CES and M/s.Binco Constructions with reference to the Disputed Document, referred to in this Judgment, and to recover the dues in accordance with law.
[Computerized by the Judgment Writer to my dictation, corrected, revised and then signed by me on this the 30th day of July 2016.] (ASWATHA NARAYANA) XLVII Additional City Civil and Sessions Judge and Special Judge for CBI Cases, Bengaluru.
129 [Spl.C.C.155/2010-J] ANNEXURE
1. LIST OF WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANT WITH THE DATES OF THEIR EXAMINATION:
07.04.2014, P.W.1: Sri.Satyamurthy 03.02.2015, 28.02.2015.
17.03.2015,
P.W.2: Smt.Padma 24.11.2015.
17.03.2015,
P.W.3: Smt.Alamelu 23.11.2015.
17.03.2015,
P.W.4: Sri.Narendra Kumar 08.04.2015,
30.06.2015.
05.10.2015.
P.W.5: Sri.L.R.Govinda Rao
05.10.2015.
P.W.6: Sri.S.N.Sethuram
07.10.2015.
P.W.7: Sri.S.Venkateshan
08.10.2015.
P.W.8: Smt.Shakunthala
08.10.2015.
P.W.9: Sri.Kaleemulla Khan
08.10.2015.
P.W.10: Sri.Anil Kumar Agarwal
09.10.2015.
P.W.11: Sri.Bamdev Naik
24.11.2015.
P.W.12: Sri.T.N.C.Sridhar
25.11.2015.
P.W.13: Sri.V.Krishna Prasad
25.11.2015.
P.W.14: Sri.Jitmal
04.02.2016.
P.W.15: Sri.L.S.Padma Kumar
13.04.2016.
P.W.16: Sri.Sathish Kumar
130 [Spl.C.C.155/2010-J]
2. LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE COMPLAINANT:
Ex.P.1 : Retention of Impounded Books/ Documents File of M/s.Children's Education Society maintained by the Commissioner's Office.
Ex.P.1(a) : Letter Dated 31.08.2006 issued by the Accused-1, at Page-7 of Ex.P.1, seeking permission to retain of Books of Accounts and documents pertaining to M/s.Children's Education Society.
Ex.P.1(b) : Letter Dated 04.09.2006 addressed to DGIT for retention of the Impounded Documents (Page-8).
Ex.P.1(c) : Letter Dated 06.09.2006 addressed to DGIT for retention of Books of Accounts and Documents pertaining to M/s.Children's Education Society (Page-
9).
Ex.P.1(d) : Order Dated 7.9.2006 of DGIT regarding accorded permission for retention of Impounded Documents upto 31.3.2007 (Page-10).
Ex.P.1(e) : Letter Dated 26.3.2007 written by the Accused-1 requesting for approval for retention of Books of Accounts and Documents pertaining to M/s.Children's Education Society (Page-17).
Ex.P.1(f) : Letter Dated 26.3.2007 written by the Accused-3 for proposal for retention of Books impounded of M/s.Children's Education Society (Page-18).
Ex.P.1(g) : Letter Dated 27.3.2007 written by the Accused-3 for proposal for retention of Books impounded of M/s.Children's 131 [Spl.C.C.155/2010-J] Education Society (Page-19).
Ex.P.1(h) : Order Dated 29.3.2007 of the DGIT giving permission upto 31.12.2007 (Page-20).
Ex.P.1(i) : Letter Dated 27.12.2007 for retention of the documents upto 31.12.2008 (Page-
21).
Ex.P.1(j) : Letter Dated 27.12.2007 for approval of retention of Books (Page-22).
Ex.P.1(k) : Letter Dated 31.12.2007 for proposal of retention of Books impounded (Page-
23).
Ex.P.1(l) : Order Dated 31.12.2007 accorded permission as Ex.P.1(k) (Page-24).
Ex.P.1(m) : Letter Dated 04.01.2008 for proposal for retention of Impounded Books (Page-
26).
Ex.P.1(n) : Letter Dated 21.01.2008 written by Additional Director of Income Tax (Page-
27).
Ex.P.1(o) : Letter Dated 28.01.2008 written by the Deputy Commissioner of Income Tax (Page-32).
Ex.P.1(p) : Letter Dated 30.01.2008 -Report regarding the retention of Impounded Books of M/s.Children's Education Society (Page-35).
Ex.P.1(q) : Letter Dated 31.01.2008 written by the Commissioner of Income Tax (Page-37).
Ex.P.1(r) : Letter Dated 10.3.2008 by DGIT to CIT Centre to submit Report (Page-39).
Ex.P.1(s) : Letter Dated 11.3.2008 by CIT to ACIT 132 [Spl.C.C.155/2010-J] regarding Specific Report on Ex.P.1(r) (Page-40).
Ex.P.1(t) : Letter Dated 17.3.2008 by ACIT regarding explanation from the Accused- 1(Page-42).
Ex.P.1(u) : Letter Dated 4.4.2008 by the Accused-1 regarding explanation for releasing documents to ACIT (Page-44).
Ex.P.1(u1) : Signature of Sri.Chandramouli in Ex.P.1(u).
Ex.P.1(v) : Letter Dated 11.4.2008 forwardal of Ex.P.1(u) with remarks (Letter Dated 4.4.2008) (Page-46).
Ex.P.1(w) : Letter Dated 29.4.2008 written by the CIT to the DGIT.
Ex.P.1(x) : Letter Dated 05.5.2008- Explanation of the Accused-3 (ACIT) to the Accused-1.
Ex.P.1(x1) : Signature of Sri.D.K.Jha in Ex.P.1(x).
Ex.P.1(y) : Letter Dated 07.5.2008 written by the Accused-3 to the DGIT.
Ex.P.2 : File-1-Xerox Copy of Agreement to Sell.
Ex.P.3 : File-2-Xerox Copy of Sale Deed Dated 8.6.2006.
Ex.P.4 : File-3-Bunch of Loose Sheets (5 Pages).
Ex.P.4(a) : Part of the File i.e., Ex.P.4 containing numerical figures without particulars at Page-2.
Ex.P.5 : File-4-Xerox Copies of Sale Deeds (90 Pages).
Ex.P.6 : File-5-Receipt Dated 17.06.2002 issued 133 [Spl.C.C.155/2010-J] by Sri.Narayana.
Ex.P.7 : File-6-Original Advance Receipt with Xerox Copies of 2 Cheques.
Ex.P.8 : File-7-Original Sale Deed Dated 28.6.2006.
Ex.P.9 : File-8-Slip-Thumb Impressed by Sri.Govindappa.
Ex.P.10 : File-9-Original Gift Deed Dated
29.1.2005 executed by Sri.Narasa
Raju.S.
Ex.P.11 : File-10-Bunch of Loose Sheets pertaining
to the transactions M/s.Children's
Education Society (10 Pages).
Ex.P.11(a) : Second Sheet of Ex.P.11 containing some numerical figures and dates with calculations.
Ex.P.11(b) : Last Page of Ex.P.11 containing some dates and numerical figures.
Ex.P.12 : File-11-Register containing the details of
payments made to M/s.Children's
Education Society.
Ex.P.13 : File-12-Loose Sheet containing the
details of Interest Calculations of
M/s.Children's Education Society.
Ex.P.14 : File-14-Blank Promissory Notes-32 for
Rs.25 Lakhs each and Blank Cheques-32 signed by Sri.S.Narasa Raju for Rs.25 Lakhs each.
Ex.P.15 : File-15-Current Account No.247 Pass
Book pertaining to M/s.Children's
Education Society.
Ex.P.16 : Survey Records of M/s.Children's
134 [Spl.C.C.155/2010-J]
Education Society.
Ex.P.16(a) : **Order Sheet of Assessing Officer.
Ex.P.16(a1) : Signature of Sri.Chandramouli in
Ex.P.16.
Ex.P.16(b) : Noting Dated 29.3.2007 in Ex.P.16(a) .
Ex.P.16(b1) : Signature of Sri.Chandramouli in
Ex.P.16.
Ex.P.16(c) : Order Sheet Dated 5.9.2006 of
Assessing Officer.
Ex.P.16(c1) : Signature of Sri.Chandramouli in
Ex.P.16.
Ex.P.16(d) : Report at Page-49 in Ex.P.16.
Ex.P.16(e) : Page-66 of Ex.P.16 Ledger Sheet relating
to 2004-05 pertaining to M/s.Bhamdev Naik Company. (Double marking of Ex.P.16(d) corrected as per the Order Dated 05.05.2016).
Ex.P.16(f) : Page-67 of Ex.P.16 Ledger Sheet relating to 2005-06 pertaining to M/s.Bhamdev Naik Company. (Double marking of Ex.P.16(d) corrected as per the Order Dated 05.05.2016).
Ex.P.17 : File containing Monthly Report on Surveys maintained by the Office of the Additional Commissioner of Income Tax.
Ex.P.17(a) : Letter Dated 23.07.2007 (Page-19).
Ex.P.17(b) : Final Survey Report of M/s.Children's Education Society.
Ex.P.17(c) : Letter Dated 12.11.2007 written by the Accused-3 called for an explanation from the Accused-1.
135 [Spl.C.C.155/2010-J] Ex.P.17(d) : Letter Dated 13.11.2007 written by the Accused-3 to the CIT.
Ex.P.18 : Statement of Smt.Shakuntala.
Ex.P.18(a1) : Signature of Smt.Shakuntala in Ex.P.18.
Ex.P.18(a2) : Signature of Smt.Shakuntala in Ex.P.18.
Ex.P.18(a3) : Signature of Smt.Shakuntala in Ex.P.18.
Ex.P.18(a4) : Signature of Smt.Shakuntala in Ex.P.18.
Ex.P.18(a5) : Signature of Smt.Shakuntala in Ex.P.18.
Ex.P.18(a6) : Signature of Smt.Shakuntala in Ex.P.18.
Ex.P.18(a) : Signature of Smt.Shakuntala in Ex.P.18.
Ex.P.18(b) : Signature of Sri.Chandramouli in Ex.P.18.
Ex.P.19 : Statement of Smt.Vindya.
Ex.P.19(a) : Signature of Smt.Vindya in Ex.P.19.
Ex.P.19(b) : Identified Signature of Sri.Chandramouli in Ex.P.19.
Ex.P.20 : Statement of Dr.Manjunath, Principal of Oxford Dental College.
Ex.P.20(a) : Signature of Dr.Manjunath in Ex.P.20.
Ex.P.20(b) : Signature of Sri.Sridhar in Ex.P.20. Ex.P.20(c) : Identified Signature of P.W.12 in Ex.P.20.
Ex.P.21 : Assessment File of M/s.Binco Constructions Private Limited for the Assessment Year 2004-05.
Ex.P.21(a) : Letter Dated 5.9.2006 written by Sri.U.A.Chandramouli, DCIT to the ACIT.
136 [Spl.C.C.155/2010-J] Ex.P.21(a1) : Identified Initial and Office Seal of P.W.6 in Ex.P.21.
Ex.P.22 : Assessment File of Sri.Bamdev Nayak for the Assessment Year 2004-05.
Ex.P.22(a) : Letter Dated 20.10.2005 available in Ex.P.22.
Ex.P.22(b) : Balance Sheet as on 31.03.2004 relating to M/s.Bhamdev Naik Company at Pages-24 to 45 of Ex.P.22.
Ex.P.22(c) : Balance Sheet Schedule-15 relating to M/s.Bhamdev Naik Company at Page-30 of Ex.P.22. (In document it is marked as Ex.P.22(d)) Ex.P.22(d) : Balance Sheet Schedule-15A relating to M/s.Bhamdev Naik Company at Page-31 of Ex.P.22. (In document it is marked as Ex.P.22(c)) Ex.P.23 : File containing documents i.e., Applications, Receipts and other Documents pertaining to the Accused-1.
Ex.P.24 : Denied Portion of Statement in Para-3 of
P.W.8
Ex.P.25 : Seizure Memo
Ex.P.25(a) : Identified Signature of P.W.9 in Ex.P.25.
Ex.P.26 : Letter Dated 29.4.2008 calling Explanation from the Accused-3.
Ex.P.27 : Copy of Government of India (Allocation of Business) Rules. **(In the document, it is marked as Ex.P.28)** Ex.P.28 : Copy of Notification Dated 03.11.1958.
**(In the document, it is marked as Ex.P.27)** Ex.P.29 : Sanction Order authenticated by P.W.14 on behalf of the President of India.
Ex.P.29(a) : Identified Signature of P.W.14 in 137 [Spl.C.C.155/2010-J] Ex.P.29.
Ex.P.30 : FIR Dated 26.09.2008.
Ex.P.30(a) : Identified Signature of Sri.Narasimha
Komar in Ex.P.30.
Ex.P.31 : Petition Dated 30.09.2008.
Ex.P.32 : Search Warrant issued by the Court for
carryout the searches in the residence and office premises of the Accused.
Ex.P.33 : Search Warrant issued by the Court for carryout the searches in the residence and office premises of the Accused.
Ex.P.34 : Search Warrant issued by the Court for carryout the searches in the residence and office premises of the Accused.
Ex.P.35 : Record submitted by P.W.15 pertaining to search made under Section 165(1) in the office and residential premises of the Accused-1 and office premises of the Accused-2.
Ex.P.36 : Search List prepared by P.W.15.
Ex.P.37 : Search List prepared by P.W.15.
Ex.P.38 : Search List prepared by P.W.15. Ex.P.39 : Search List prepared by P.W.15. Ex.P.40 : Letter handed over by P.W.15 to GEQD for Expert Opinion of Hard Disc.
Ex.P.41 : Report with Covering Letter received from GEQD by P.W.15.
Ex.P.42 : Seizure Memo pertaining to receipt of 5 Files from Sri.Ramanan, the then Inspector of Vigilance of Income Tax Department.
Ex.P.43 : File received from Sri.Ramanan by P.W.15.
138 [Spl.C.C.155/2010-J] Ex.P.44 : File received from Sri.Ramanan by P.W.15.
Ex.P.45 : File received from Sri.Ramanan by P.W.15.
Ex.P.46 : File received from Sri.Ramanan by P.W.15.
Ex.P.47 : File received from Sri.Ramanan by P.W.15.
3. LIST OF MATERIAL OBJECT MARKED ON BEHALF OF THE COMPLAINANT:
M.O.1 : Hard Disc.
4. LIST OF WITNESSES EXAMINED ON BEHALF OF THE ACCUSED WITH DATE OF EXAMINATION:
-NIL-
5. LIST OF DOCUMENTS MARKED ON BEHALF OF THE ACCUSED WITH DATE OF EXAMINATION:
Ex.D.1 : Income Tax Return filed by M/s.Children's Education Society for the Assessment Year 2003-04.
Ex.D.1(a) : Main Balance Sheet annexed to Ex.D.1.
Ex.D.1(b) : Balance Sheet of Dental College annexed to Ex.D.1.
Ex.D.1(c) : Balance Sheet of Engineering College annexed to Ex.D.1.
Ex.D.2 : Assessment Order Dated 24.03.2006 passed by the Accused-1.
139 [Spl.C.C.155/2010-J]
Ex.D.3 : Income Tax Return filed by
M/s.Children's Education Society for the Assessment Year 2004-05.
Ex.D.3(a) : Consolidated Balance Sheet annexed to Ex.D.3.
Ex.D.3(b) : Balance Sheet of Oxford Hostel annexed to Ex.D.3.
Ex.D.3(c) : Balance Sheet of Dental College & Hostel annexed to Ex.D.3.
Ex.D.3(d) : Notice Dated 08.11.06 issued to
M/s.Children's Education Society
regarding scrutiny of Income Tax Return will be taken up pertaining to the Assessment Year 2004-05. (It is at Page-271 of Ex.P.45) Ex.D.3(e) : Notice Dated 19.09.06 issued to M/s.Children's Education Society regarding scrutiny of Income Tax Return will be taken up pertaining to the Assessment Year 2004-05. (It is at Page-272 of Ex.P.45) Ex.D.3(f) : Notice Dated 23.08.06 issued to M/s.Children's Education Society regarding scrutiny of Income Tax Return will be taken up pertaining to the Assessment Year 2004-05. (It is at Page-273 of Ex.P.45) Ex.D.3(g) : Schedule-E in Ex.D.3 at Page-120.
Ex.D.3(h) : Schedule-D in Ex.D.3 at Page-179. Ex.D.4 : Assessment Order for the year 2005-06 passed by P.W.1.
Ex.D.5 : Statement of Sri.Vamdev Nayak recorded by the Accused-1 after survey.
Ex.D.6 : Statement Dated 29.8.2006 of
Smt.Shakuntala recorded by the
Accused-1.
140 [Spl.C.C.155/2010-J]
Ex.D.6(a) : Signature of Smt.Shakuntala in Ex.P.6.
Ex.D.6(a1) : Signature of Smt.Shakuntala in Ex.P.6.
Ex.D.6(a2) : Signature of Smt.Shakuntala in Ex.P.6.
Ex.D.6(a3) : Signature of Smt.Shakuntala in Ex.P.6.
Ex.D.6(a4) : Signature of Smt.Shakuntala in Ex.P.6.
Ex.D.6(a5) : Signature of Smt.Shakuntala in Ex.P.6.
Ex.D.6(a6) : Signature of Smt.Shakuntala in Ex.P.6.
Ex.D.6(a7) : Signature of Smt.Shakuntala in Ex.P.6.
Ex.D.6(a8) : Signature of Smt.Shakuntala in Ex.P.6.
Ex.D.6(a9) : Signature of Smt.Shakuntala in Ex.P.6.
Ex.D.6(a10) : Signature of Smt.Shakuntala in Ex.P.6. Ex.D.6(b) : Signature of Sri.Chandramouli in Ex.P.6. Ex.D.6(b1) : Signature of Sri.Chandramouli in Ex.P.6. Ex.D.6(b2) : Signature of Sri.Chandramouli in Ex.P.6.
Ex.D.6(b3) : Signature of Sri.Chandramouli in Ex.P.6.
Ex.D.6(b4) : Signature of Sri.Chandramouli in Ex.P.6.
Ex.D.6(b5) : Signature of Sri.Chandramouli in Ex.P.6.
Ex.D.6(b6) : Signature of Sri.Chandramouli in Ex.P.6.
Ex.D.6(b7) : Signature of Sri.Chandramouli in Ex.P.6.
Ex.D.6(b8) : Signature of Sri.Chandramouli in Ex.P.6. Ex.D.6(b9) : Signature of Sri.Chandramouli in Ex.P.6.
Ex.D.7 : Statement Dated 1.9.2006 of Sri.Narasaraju recorded by the Accused-
1. Ex.D.7(a) : Signature of Sri.Chandramouli in Ex.P.7.
Ex.D.8 : Statement Dated 5.9.2006 of
141 [Spl.C.C.155/2010-J]
Sri.Narasaraju recorded by the Accused-
1. Ex.D.8(a) : Signature of Sri.Chandramouli in Ex.P.8.
Ex.D.9 : Assessment Order for the Assessment Year 2004-05.
Ex.D.10 : Revenue Audit Report No.3 Dated 26.3.2007.
Ex.D.11 : Organization Set-up of Central Charge.
Ex.D.12 : Appraisal Report regarding search conducted in the case of Sri.Bhamadev Naik & M/s.Binco Constructions Private Limited.
Ex.D.12(a) : Page-7 relating to Bundle Bearing No.A/BNO/3 in Ex.P.12.
Ex.D.13 : Copy of Charge Order Dated 12.9.2006 of P.W.4.
Ex.D.14 : Confidential Report of the Accused-3 for the year 2006-07.
Ex.D.15 : Confidential Report of the Accused-3 for the year 2007-08.
4. LIST OF WITNESSES EXAMINED & DOCUMENTS MARKED ON BEHALF OF THE ACCUSED WITH DATE OF EXAMINATION:
-NIL-
(ASWATHA NARAYANA) XLVII Additional City Civil and Sessions Judge and Special Judge for CBI Cases, Bengaluru.