Delhi District Court
Ito vs Sanjay Kumar Garg on 3 May, 2012
IN THE COURT OF SH. GORKAH NATH PANDEY
ADDL CHIEF METROPOLITAN MAGISTRATE (Spl. Acts) CENTRAL
TIS HAZARI COURTS, DELHI
ITO vs Sanjay Kumar Garg
U/s 276D of the Income Tax
CC No.46/08
JUDGEMENT
(a)Serial no. of the case : 02401R0470762008
(b)Date of commission of offence : Assessment Year 200506
(c)Name of complainant : Sh. Ghansham Sharma,
ACIT, Central Circle 9,
New Delhi
(d)Name, parentage, residence: Sanjay Kumar Garg
s/o Sh. Ram Chander Garg,
Prop. M/s Rahul Enterprises
rd
2261, 3 Floor, Gali
Raghunandan, Naya Bazar
Also at:
st
C65, 1 Floor,
Sangam Apartment, Sector9
Rohini, Delhi85.
(e)Offence complained of/ proved : U/s 276D of Income Tax Act
(f)Plea of accused : Pleaded not guilty.
(g)Final order : Convicted
(h)Date of such order : 03.05.12
Date of Institution of complaint: 31.03.08
Date of Reservation of Judgment : 03.05.12
Date of Pronouncement of Judgment : 03.05.12
Brief statement of the reasons for the decision:
1. The complainant Sh. Ghansham Sharma, Assistant Commissioner of Income Tax, filed the present complaint u/s 276D of Income Tax Act (hereinafter ITO vs Sanjay Kumar Garg 1-9 called as Act) against accused for the Assessment Year 200506. The allegations briefly stated in the complaint are that accused filed his return of income for the assessment year 200506 declaring an income of Rs.1,33,710/. The return was in the prescribed form and duly signed and verified by accused. Keeping in view the nature and complexity of accounts and interest of revenue, the Assessing Officer deemed it necessary to get the accounts of the accused audited by a Chartered Accountant. Accordingly with the prior approval of CIT Central II, New Delhi, the accused was directed to get the accounts audited u/s 142(2A) of the Act by M/s P. Bholusaria & Co., 26/11, Shakti Nagar, Delhi. A letter dated 23.11.06 was sent to the accused proposing Special Audit which was to be completed within 90 days. It is alleged that the Auditors of M/s P. Bholusaria & Co. vide letter dated 27.02.07 informed that the letter sent to the accused has been received back unserved and the accused has also not approached them for audit. Thereafter, the Assessing Officer issued a show cause notice dated 05.03.07 to the accused extending time for getting the accounts audited. The accused replied vide letter dated 19.03.07 that he is tracing the books and shall produce the same but accused failed to do so. Again letters dated 13.04.07 and 15.05.07 were sent to the accused asking him to get the accounts audited but the accused did not make the accounts available to the Auditors for audit purpose. It is alleged that accused has willfully failed to produce the books of accounts for audit and has willfully failed to comply with the directions given u/s 142(2A) of the Act, thereby committed an offence punishable u/s 276D of Income Tax Act.
2. On 02.02.09, a notice u/s 251 Cr.P.C. was given to the accused for the offence punishable u/s 276D of the Act to which accused pleaded not guilty and claimed trial.
3. In order to substantiate the allegations, the complainant examined himself as PW1 and Sh. Mahavir Singh, the then DCIT as PW2. PW1, the complainant deposed that he filed the present complaint Ex. PW1/1 and proved on record sanction/authorization Ex. PW1/2 for launching the prosecution against the accused, letters written to the accused regarding Special Audit as Ex. PW1/4, Ex. PW1/5, and Ex. PW1/9 to Ex. PW1/11 written by PW2 Sh. Mahavir Singh regarding Special Audit u/s 142(2A) of the Act, hand written letter Ex. PW1/6 written by PW2 to accused and noting as Ex. PW1/7 which was written by PW2 in presence of accused regarding Special Audit. The witness has also proved on record the approval for Special Audit as Ex. PW1/8.
PW2 reiterated the facts of the complaint and deposed that accused filed his return of income for the Assessment Year 200506 declaring the total income of Rs.1,33,710/ and proved on record the copy of the said return along with annexures as Ex. PW2/1. The witness also deposed that he issued several letters/notice to the accused regarding Special Audit from M/s P. Bholusaria and Company Chartered Accountant. The said letters/notice have already been proved on record by PW1.
4. Statement of accused was recorded u/s 313 Cr.P.C. in which he denied the allegations and stated that he has not received any letters. The accused ITO vs Sanjay Kumar Garg 3-9 further stated that the Special Audit was ordered with malafide intention and there was no complexity in the books of accounts. Accused opted not to lead any defence evidence.
5. I have heard the arguments on behalf of both the parties and gone through the relevant records. I have also considered the relevant provisions of the Income Tax Act, 1961 and written submissions filed on behalf of accused. Learned defence counsel has also relied upon judgments reported as "[2011] 330 ITR 298 (Delhi)', '[2011] 330 ITR 43 (Delhi)', '[2011] 332 ITR 115 (Guj)', '[2011] 335 ITR 277 (P& H)', '1988(1) M/s Vedsons Vs. Chief Judicial Magistrate (P&H) 119", praying to acquit the accused as this complaint is filed without any ground.
6. Relevant provisions of section 276D is reproduced below: [276D. Failure to produce accounts and documents. If a person willfully fails to produce, or cause to be produced, on or before the date specified in any notice served on him under subsection (1) of section 142, such accounts and documents as are referred to in the notice, or willfully fails to comply with a direction issued to him under subsection (2A) of that section, he shall be punishable with rigorous imprisonment for a term which may extned to one year or with fine equal to a sum calculated at a rate which shall not be less than four rupees or more than ten rupees for every day during which the default continues, or with both.]
7. It is alleged that despite directions by the Assessing Officer u/s 142(2A) of the Act to get the books of accounts audited from M/s P. Bholusaria & Co. Chartered Accountant, the accused willfully not produced the books of accounts for Special Audit. The letters/show cause notice were also issued to ITO vs Sanjay Kumar Garg 4-9 the accused in this regard but the accused failed to produce the books of accounts. Relevant provisions of section 142(2A) is reproduced below: [(2A) If, at any stage of the proceedings before him, the [Assessing Officer], having regard to the nature and complexity of the accounts of the assessee and the interest of the revenue, is of the opinion that it is necessary so to do, he may with the previous approval of the [Chief Commissioner or Commission], direct the assessee to get the accounts audited by an accountant, as defined in the Explanation below subsection (2) of section 288, nominated by the [Chief Commissioner or Commissioner] n this behalf and to furnish a report of such audit in the prescribed from duly signed and verified by such accountant and setting forth such particulars as may be prescribed and such other particulars as the [Assessing Officer] may require.
8. As mentioned above the prosecution examined two witnesses. PW2 deposed regarding contentions of complaint and PW1 proved on record the relevant documents i.e. complaint Ex. PW1/1, authorization to the file the complaint Ex. PW1/2 and various letters written by the department to the accused in respect of the verification of the accounts and also regarding Special Audit. The approval was also granted by the department for Special Audit by the CIT in view of the documents Ex. PWA1/8 which is specific and categorical. The accused was also intimated regarding the Special Audit in view of the letters proved on record by PW1 and witnesses have categorically deposed that accused did not get his books of accounts available for Special Audit u/s 142(2A) and thereby committed an offence punishable u/s 276D of the Act. PW2 Sh. Mahavir Singh written the above said letters to the accused for getting his books of account audited. The testimony of the PWs remained uncontroverted their cross examination.
I do not find any merit in the contentions of learned defence counsel ITO vs Sanjay Kumar Garg 5-9 that the accused has filed his return after audit of the account by Sabharwal and Company Chartered Account, Lahori Gate, Delhi and therefore, the account of the accused was neither complexity. It is the prerogative and satisfaction of the department that as and when it is felt that accounts needs to be audited, the order is passed for Special Audit. If the contentions of the learned defence counsel is assumed to be true for a moment, if a person files return of income after audit in his own way and same has to be considered to be true then the provisions of section 142(2A) of the Act, become redundant. The accused was at liberty to challenge the appointment of Special Auditor by the department also as every remedy was available to him as per law. Admittedly, no such step was taken by the accused. Accused has also not challenged the appointment for Special Audit nor requested for change of Special Auditor. Therefore, the contentions of the accused that department had malafide intentions or accused was not aware regarding the appointment of Special Auditor is baseless and without any ground. The testimony of PW2 also remained unimpeached and uncontrovered in one way or the other. The special auditor was appointed by the department in the presence of the accused and hence it is presumed and proved that it was well within the knowledge of the accused that he has to appear and put his case before the Special Auditor. Moreover, various correspondences have also been proved on record in this regard. PW2 also deposed during cross examination that accused was given an opportunity to come and explain before the Special Auditor but the accused did not appear and also failed to get his books of ITO vs Sanjay Kumar Garg 6-9 accounts audited.
9. I have also gone through the statement of accused recorded u/s 313 Cr.P.C. read with section 281 Cr.P.C. which shows that accused had knowledge of the Special Audit and accused simply denied that he has not received any letters regarding Special Audit. Contentions of the accused during his statement itself appears to be contrary as the accused appeared before the Assessing Officer and also signed the order sheet i.e. Ex. PW1/7 when the Special Auditor was appointed. The accused failed to show any malafide intention on the part of department or by the Special Auditor and also failed to produce the books of accounts. In view of the facts and circumstances and material available on records I do not find any ground to disbelieve the case of the complainant. The position of the accused is further falsified by the reply to the show cause notice issued by the department. On the one hand accused stated in his statement that he has not received any letter regarding Special Audit and on the other hand accused filed the reply and taken the excuse that his Chartered Account Mr. Pradeep Kumar died of cancer and therefore, he is unable to produce the records. The contentions of the accused did not stand together at all.
10.During the course of arguments learned defence counsel argued that summoning of the accused is bad in law as it is routine summoning. He further submitted that accused was summoned without examination of the complainant and without applying mind by the court and hence the summoning is bad in law. I do not find any basis of this objection/arguments by the learned ITO vs Sanjay Kumar Garg 7-9 defence counsel as till today accused has not taken appropriate steps. If the accused was aggrieved by any order of this court or if it is felt by the accused that he was wrongly summoned, accused ought to have availed remedy available as per law. It is further mentioned by the learned defence counsel that Ex. PW1/2 i.e. authorization to prosecute the matter by Sh. VK Singh is not proved in accordance with law as the executor has not appeared to prove the same. I do not find any substance in this plea as PW1 and PW2 categorically proved the documents in view of the provisions of Evidence Act, 1872 and their testimony remained unchallenged during their cross examination.
11.Learned defence counsel further argued that complainant has not examined all the witnesses named in the list and evidence of PW1 is not reliable as no proceedings were conducted in his presence. This court does not find any substance in it. It is not mandatory for the complainant to examine all their witnesses and it is prerogative of the complainant to examine entire witness or only material witness to prove their case. It is not disputed that complainant's witness are government servant and whatever deposed, they have deposed in their official capacity and the witness has to prove their case on the basis of record. As the witnesses have deposed only on the basis of record hence their testimony is not required to be corroborated by other/independent witnesses also. Further the contention of the complainant is unrebutted and it is not denied that the Special Audit was to be made in this case by M/s P. Bholusaria ITO vs Sanjay Kumar Garg 8-9 & Co. Chartered Accountant. It is observed that the case laws filed by the learned defence counsel are not applicable in the peculiar facts and circumstances of the present case. I am of the considered opinion that the complainant has proved the allegations against the accused as mentioned in the complaint beyond reasonable doubt.
12.In view of the aforesaid discussions accused is held guilty of not furnishing the books of accounts. It is further held that accused willfully failed to furnish the same in spite of receiving of notices for Special Audit. Hence accused is hereby held guilty and convicted for the offence punishable u/s 276D of Income Tax Act.
(GORAKH NATH PANDEY) ACMM(Spl. Acts), CENTRAL TIS HAZARI COURTS DELHI Announced in open court on 03.05.12 ITO vs Sanjay Kumar Garg 9-9