Delhi District Court
Ito vs Deewan Chand Pruthi on 2 June, 2013
IN THE COURT OF SH. GORAKH NATH PANDEY
ADDL CHIEF METROPOLITAN MAGISTRATE (Spl. Acts) CENTRAL
TIS HAZARI COURTS, DELHI
ITO vs Deewan Chand Pruthi
U/s 276C(1) & 277 of the Income Tax Act 1961 and u/s 193/196 IPC
CC No.3842/04
COMMON JUDGMENT
(a)Serial no. of the case : 02401R0007561991
02401R0007571991
02401R0007581991
02401R0007591991
02401R0007601991
(b)Date of commission of offence : AY 198081, 198182, 198283,
198384 and 198687
(c)Name of complainant : Sh. V.N. Singh
ACIT, Circle11 (1), New Delhi
(d)Name, parentage, residence: Deewan Chand Pruthi
4/71, WEA Karol Bagh,
New Delhi
(e)Offence complained of/ proved : U/s 276C & 277 of IT Act
read with U/s 193/196 IPC
(f)Plea of accused : Pleaded not guilty.
(g)Final order : Acquitted
(h)Date of such order : 06.02.13
Date of Institution of Complaint: 16.12.91
Date of Reservation of Judgment : 06.02.13
Date of Pronouncement of Judgment : 06.02.13
Brief statement of the reasons for the decision:
1. This common judgment will dispose off five complaints bearing CC No.40/4 (Old CC No.586/95) for AY198081, CC No.38/4 (Old CC No.583/95) for AY198182, CC No.41/4 (Old CC No.584/95) for AY198283, CC No.42/4 (Old ITO vs Deewan Chand Pruthi 1 of 9 CC No.585/95) for AY198384 and CC No.39/4 (Old CC No.582/95) for AY198687 filed by the complainant as the allegations made in these complaints as well as evidence led are common.
2. The complainant Mr. V.N. Singh, the then Assistant Commissioner of Income Tax, filed the aforesaid five complaints against the accused for the offences u/s 276C(1) & 277 of Income Tax Act, 1961 (hereinafter called as the Act) read with section 193/196 of Indian Penal Code for the Assessment Year 198081, 198182, 198283, 198384 and 198687 with the allegations that while filing return of income for the relevant year, accused had shown agriculture income of different amounts and it was claimed by the accused that he had taken land on lease at a rate of Rs.700/ per acre for two cropes. Accused submitted copy of Khasra Girdawari of the land cultivated by him which was allegedly taken on lease from Smt. Randhir Kaur and Sh. Natha Singh but on inquiry made by the assessing officer, the land in question was found cultivated in the name of Sh. Sadhu Singh, Sh. Gamdor Singh and Sh. Sher Singh and thus it is alleged that the Khasra Girdwari filed by the accused is incorrect and claim of the accused about the agricultural income was found to be bogus and false. Accordingly, corresponding additions were made to the income of accused for the relevant years. Thus, in the aforesaid manner, accused willfully attempted to evade tax, penalty and interest chargeable and imposable under the Act, committed offence punishable u/s 276C(1) of the Act. The accused also committed offence u/s 277 of the Act by making false verification in the return and ITO vs Deewan Chand Pruthi 2 of 9 deliberately delivering statement and accounts which were false as alleged.
3. Accused was summoned and thereafter precharge evidence was recorded. The charge was framed against the accused u/s 276C(1) & 277 of the Act read with section 193/196 of IPC on 07.05.02 to which he pleaded not guilty and claimed trial.
4. In order to substantiate the allegations against the accused, the complainant examined himself as PW1 and Sh. J.P. Gulati as PW2.
PW1 Sh. V.N. Singh, the complainant deposed regarding filing of complaint and proved on record the sanction Ex.PW1/1 and complaint Ex.PW1/2.
PW2 Sh. J.P. Gulati, (the then Assistant Commissioner of Income Tax) deposed regarding the allegations mentioned in the complaint. PW1 further deposed that the assessee filed its duly signed and verified return alongwith annexure for the relevant years and he made the assessment on the basis of record available and proved the assessment order Ex.PW2/1 and return as Ex.PW2/2.
5. Statement of the accused was recorded u/s 313 Cr.P.C separately in each complaints. Accused denied the allegations and submitted that he has been falsely implicated in this case and stated that he had genuine agricultural income. In support of claim and contention, accused examined Mr. Natha Singh as DW1. In his statement DW1 deposed that he had given his land to ITO vs Deewan Chand Pruthi 3 of 9 D.C. Pruthi for cultivation. DW1 relied upon document Ex.DW1/1 i.e. certified copy of collector surplus land qua ownership of the land in question.
6. I have heard the arguments on behalf of both the parties and gone through the record of the case as well as written arguments filed on behalf of accused. I have also considered the relevant provisions of the Income Tax Act, 1961 and perused the order dated 25.09.02 by Hon'ble ITAT. The relevant provisions of section 276C(1) as well as 277 of the Act is reproduced as below: [276C. Willful attempt to evade tax, etc. (1) If a person willfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable, i. in a case where the amount sought to be evaded exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine;
ii. in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine.
[277. False statement in verification, etc. If a person makes a statement in any verification under this Act or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be rue, he shall be punishable, i. in a case where the amount of tax, which would have been evaded if the statement or account had been accepted as true, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine;
ii. in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine]
7. Learned standing counsel for complainant argued that the claim of the ITO vs Deewan Chand Pruthi 4 of 9 agricultural income was just camouflage affair and made up story which has been proved by the prosecution witnesses, therefore, accused may be convicted for the alleged offence. Learned defence counsel, on the other hand, argued that on the basis of statement of village Sarpanch and village Patwari, the complainant questioned that the claim of accused regarding agricultural income was not genuine. It is further argued that the accused has assailed and impugned the order dated 20.08.93 by the CIT(A) involving same controversy on identical allegations which are pending before this court. The material so collected and the allegations of the complainant did not impress the Hon'ble ITAT and the appeals were allowed and the matters were remanded back to be decided on merits vide order dated 25.09.02 but complainant department did not comply the order of learned ITAT and did nothing to decide the matter on merits. It is also argued that though PW1 was examined on 26.09.06 but he did not disclose this relevant fact before the court. It is also argued that since the present controversy was given rise to by the Income Tax Authorities, nothing could be proved by the complainant department in their own department proceedings and therefore accused is liable to be acquitted.
8. It is further argued that since the assessment and the basis of prosecution has been set aside by the appeals, and the Assessing Officer/Complainant failed to comply with the direction of learned ITAT, present prosecution cannot continue in view of the law laid down by the Hon'ble Supreme Court in "(2004) ITO vs Deewan Chand Pruthi 5 of 9 271 ITR 3134 (P&H) Arvind Jain v C.I.T. (Investigation)". It is further held in the judgment reported as "(1987) 168 ITR 33 (Delhi) Dr. R.P. Gupta vs I.A.C. (Assessment)". Relevant para of the judgment reads as under: Prosecution - Assessment set aside by CIT(A) Entire substratum of the complaint having been taken away by setting aside of assessment order, complaint cannot continue and has to be quashed.
Held The distinction between ss. 250(4) and 251(1)(a) is that whereas under s.251(1)(a) the initial assessment is set aside and is no longer alive till it is made afresh by the ITO after compliance of the directions given by the appellate authority, under subs.(4) of s.250 the initial assessment is not set aside and is kept alive and only the result of further enquiry is called for by the appellate authority from the assessing authority.
When the entire assessment order pertaining to the petitioner which contained objectionable items on the basis of which the complaint was lodged by the respondent against the petitioner, was set aside in its entirety vide order dt. 3rd March, 1986 passed by the CIT(A), the respondentDepartment officer is now left with no basis or material on the basis of which he can prosecute the petitioner regarding that complaint. It is an entirely different proposition that when the fresh assessment regarding the income of the petitioner is made in compliance with the directions made in the order dt. 3rd March, 1986 and if something objectionable pertaining to the same against the petitioner is detected, there would be no impediment in the way of the Department to file a fresh complaint, if so advised, against the petitioner, but as at present the entire substratum of the present complaint having been taken away by the setting aside of the assessment order, the present complaint cannot continue and has to be quashed.
9. The filing of the income tax return is not denied by the accused as well as its verification and the document relied in support of the return. The only bone of contention/issue which appears to be examined in this matter is that accused ITO vs Deewan Chand Pruthi 6 of 9 willfully attempted to evade tax by claiming agricultural income. The basis of the assessment was agricultural income claimed by the accused during appeal proceeding for the Assessment Year 198687. As per testimony of PW2, the genuineness of the socalled claim was investigated by the inspector Mr. P.N. Hera. In his statement PW2 stated that Mr. Hera submitted his report in writing as well as statements recorded by him of various persons i.e. village Sarpanch, village Patwari and also from Mr. Natha Singh whose land was alleged to be taken on lease by the accused. PW2 also stated that the Khasra Girdwari provided by the accused and Khasra Girdwari furnished by the village Patwari was totally different in respect to the name of the lessee, crops, cultivated and nature of land. Admittedly, PW2 did not examine the record personally. PW2 further deposed that enquiry report of Mr. Hera was based on the statement of Mr. Bharat Singh, the village Sarpanch, Natha Singh, the owner of the land in question and the village Patwari. None of such person/witness were ever produced before this court.
10.In his statement DW1 Sh. Natha Singh, the owner of the land categorically deposed that he has given the land for cultivation to the accused and proved on record document Ex.DW1/1 i.e. collector surplus to show his ownership qua land in dispute. Contrary to the statement of DW1 the prosecution witness merely stated that said Natha Singh is/was not the owner of the land which cannot be considered. One question may be asked from the prosecution if DW1 is/was not the owner of the land in dispute, as to who is/was the owner of ITO vs Deewan Chand Pruthi 7 of 9 the said land and no other witness was produced by the prosecution. The so called statement of village Sarpanch and Patwari was never produced before this court nor any evidence is produced. Merely bald statement is not sufficient to prove the allegations against the accused. The contentions of the complainant further falsified in view of the testimony of PW2 itself. PW2 relied on the statement of inspector Mr. Hera who allegedly made inquiry that land was not given to the accused for cultivation but by DW1 on the other hand the prosecution is relying that DW1 was not the owner of the land in question. Both contentions are contrary to each other itself. The testimony of PW2 also not explained as to what enquiry was made, from whom said inquiry was made and merely stating that enquiry was made is not sufficient. The complainant could not name any person or produce any person from any authority from whom the inquiry was made in this respect. Even if the contentions of the complainant is accepted for a minute the complainant failed to show as to who is the owner of the land in question if said Natha Singh is not the owner of the said land as no alternative was given by the complainant. The testimony of DW1 Sh. Natha Singh remained categorical and in support of his contention he has also proved collector surplus certificate Ex.DW1/1 which remains unrebutted.
11.It is clear from the aforesaid discussions that the complainant, in fact made assessment on the basis of agricultural income claimed by the accused during appeal proceeding for the Assessment Year 198687 and complaints were filed ITO vs Deewan Chand Pruthi 8 of 9 on the sole basis of the alleged enquiry report made by Mr. Hera. It is necessary to mention that neither village Sarpanch nor village Patwari were produced or examined by the complainant before this court to prove the trustworthiness of report filed by Mr. Hera. Even inspector Hera was not produced. The complainant has not even examined inspector Mr. Hera nor proved the enquiry report furnished by Mr. Hera on the basis of which aforesaid complaints were filed by the complainant against the accused. Mere bald allegation is not sufficient to prove the case against the accused. The complainant, therefore, failed to prove the allegations leveled against the accused beyond reasonable doubt.
12.In view of the foregoing discussions and facts and circumstances of the case it is held that the complainant has failed to prove the allegations leveled in the complaint against the accused beyond reasonable doubt. Consequently, accused is acquitted of charge leveled against him. Bail bonds stand cancelled and surety is discharged. security if any be returned back after endorsement cancelled thereupon and file be consigned to the record room. A copy of this judgment be placed along with all five complaints.
(GORAKH NATH PANDEY) ACMM(SPECIAL ACTS), CENTRAL TIS HAZARI COURTS DELHI Announced in open court on 06.02.13 ITO vs Deewan Chand Pruthi 9 of 9