Delhi High Court
Umesh Kumar Modi vs K.S. Sahni, Income-Tax Officer, ... on 26 February, 1986
Equivalent citations: [1986]159ITR597(DELHI)
JUDGMENT G.R. Luthra, J.
1. Two petitions (Criminal Misc. (M) 1269 of 1985, and Criminal Misc. (M) 1269 A of 1985), of Shri Umesh Kumar Modi are being decided by means of this order. Both the petitions are under section 482 of the Criminal Procedure Code for quashing the two criminal complaints filed under sections 276C, 277 and 278B of the Income-tax Act, 1961, and sections 193 and 196 of the Indian Penal Code, by Shri K. S. Sahni, Income-tax Officer, Central Circle X, Mayur Bhawan, New Delhi (hereinafter referred to as the complainant). The complaints were for prosecuting M/s. Modi Industries Ltd.. Modi Nagar, U.P., Shri M. L. Modi, the present petitioner, Shri Umesh Kumar Modi, Shri K. N. Chopra and Shri Dhari Ram Aggarwal for concealment of income and making false statements in the returns of income-tax. This judgment is being written in the file of Criminal Misc. (Main) 1269 of 1985.
2. M/s. Modi Industries Ltd. is a private limited company and is an assessed before the complainant. The said company is running the following manufacturing units in Modi Nagar :
(i) M/s. Modi Sugar (Units A & B).
(ii) M/s. Modi Vanaspati Mfg. Co.
(iii) M/s. Modi Soap Works.
(iv) M/s. Modi Gas & Chemicals.
(v) M/s. Modi Paints & Varnishing Works.
(vi) M/s. Modi Arc Electrode Co.
(vii) M/s. Modi Lantern Works.
(viii) M/s. Modi Steels.
(ix) M/s. Modi Distillery.
3. On behalf of the said company, two returns were filed which related to the assessment years 1981-82 and 1982-83. Both the returns were signed by the present petitioner, Mr. Umesh Kumar Modi. The complainant acting as Income-tax Officer made the assessment relating to both the assessment years. Some documents were found on account of a search. The complainant found that those documents showed concealment of income of Rs. 4,16,180. The complainant added back that amount in the assessment and also launched prosecution for submitting false returns. The complaint came up before Shri S. L. Khanna, Addl. Chief Metropolitan Magistrate, Delhi, who passed orders each dated August 16, 1985, directing the summoning of all the accused including the present petitioner, Umesh Kumar Modi.
4. Criminal Misc. (M) No. 1269 of 1985 is regarding the assessment year 1981-82. The petitioner challenges his prosecution on the following grounds :
(i) Though the income-tax assessment return for the assessment year 1981-82 was signed by the petitioner, he is one amongst five managing directors of the company in charge of various units of the company but that he is not the managing director of M/s. Modi Distillery in respect of which the concealment of income was allegedly found and that in respect of the said unit, Shri M. L. Modi, accused No. 2, was in charge.
(ii) The complainant completed the assessment on September 25, 1984. An appeal was filed against the said order of assessment. Vide order dated July 26, 1985, the Commissioner of Income-tax (Appeal) X, New Delhi, called for a remand report in respect of the alleged concealment and directed that the said report should be submitted by the Income-tax Officer within one month. Inter alia, following observations were made by the said Commissioner :
"The purpose of these proceedings is to arrive at the true and correct finding based on relevant evidence properly brought on record. In order to do so, it is necessary to remand the matter to the Income-tax Officer for doing the needful in this regard. All the evidence gathered by the Income-tax Officer should be confronted to the assessed. Witnesses whose statements are sought to be used by him against the assessed should be offered for cross-examination by the assessed. The relevance of all documents sought to be used against the assessed should be established in accordance with the procedure laid down under law. The Income-tax Officer should, therefore, furnish a remand report so as to enable me to deal with this ground of appeal. The remand report should be submitted within one month of the receipt of this order."
5. That means that the finding of the Income-tax Officer complainant in respect of the alleged concealment of income has been set aside and, therefore, he could not file a complaint.
6. The same are the grounds of attack against the complainant relating to the assessment year 1982-83. It is contended that although the remand order dated July 26, 1985, did not relate to the assessment year 1982-83 that as the assessment relating to the assessment year 1982-83 was based on the same evidence which related to the assessment year 1981-82, the complaint could not be made on account of the aforesaid remand order.
7. A notice was issued to the complainant and the Delhi Administration for showing cause as to why the petition be not admitted. The complainant has put in a reply to the said show-cause notice and prays for the dismissal of the present petition. I have heard the learned counsel for the parties.
8. The learned counsel for the petitioner contended that not only that the remand order was passed by the Commissioner which debarred the complainant from filing the complaint but also the complainant was unable to complete the proceedings in accordance with the remand order inasmuch as Shri Dhari Ram Aggarwal, who was one of the witnesses to be examined in accordance with the remand order, happened to be an accused and could not be so examined. It was submitted that, under these circumstances, the very evidence on the basis of which the decision of the alleged concealment of income was based by the complainant was lacking and that, therefore, quashing of the proceedings before the learned magistrate was justified.
9. I am of the firm view that both the grounds relied upon by the petitioner are of no avail to him. He admittedly signed the returns . It is or him to explain in the trial court itself as to how and why he was not liable for the false statement, if any, contained in the said returns.
10. The existence of a remand order of the Commissioner is no bar to the maintainability of the complaint. This was the view expressed by the Supreme Court in P. Jayappan v. S. K. Perumal, 1st ITO . The following observations were made by the Supreme Court (p. 702) :
".... the pendency of the reassessment proceedings cannot act as a bar to the institution of the criminal prosecution for offences punishable under section 276C or section 277 of the Act (or sections 193 and 196 of the Penal Code). The institution of the criminal proceedings cannot in the circumstances also amount to an abuse of the process of the court. Therefore, the High Court acted legally in refusing to quash the prosecution proceedings in the cases."
11. It is well-settled law that in exercise of the revisional or inherent powers, the High Court should not ordinarily interfere in the interlocutory orders, pure and simple, particularly at the preliminary stages, e.g., the summoning of the accused. It was so held in a number of authorities by the Supreme Court. [See Raj Kapoor v. State (Delhi Administration), and Khacheru Singh v. State of U.P., AIR 1982 SC 784].
12. Those authorities were relied upon by H. C. Goel J. in H. K. S. Malik v. S. N. Gupta Construction Co. 1985 (2) Crimes 853.
13. Under the above circumstances, I do not find any force in these petitions (Criminal Misc. (M) 1269 and 1269A of 1985) and dismiss the same. The stay of the proceedings of the court of learned magistrate granted earlier is hereby vacated.
14. A copy of this judgment shall be sent to the learned Additional Chief Metropolitan Magistrate, Delhi, Who, as I understand, is now Mrs. Manju Goel.
15. Criminal Misc. (Main) No. 1269 of 1985 and Criminal Misc. (Main) No. 1269-A of 1985 stand disposed of.