Madras High Court
Union Of India (Uoi) vs Jayalakshmi & Co. And Ors. on 22 June, 1978
Equivalent citations: [1979]119ITR955(MAD)
JUDGMENT M.A. Sathar Sayeed, J.
Crl. A. No. 79/1976 :
1. This is an appeal filed by the Union of India represented by the 2nd Income-tax Officer, Circle II, Salem, against the judgment in C.C. No. 712 of 1973 on the file of the Judicial First Class Magistrate No. 1, Salem, for enhancement of the sentence.
2. Accused 1 is a company known as M/s. Jayalakshmi and company. Accused 2 to 8 are partners of which accused 2 and 3 are managing partners of the said company. The 9th accused is the accountant of the firm.
3. The second ITO, Circle-2, Salem, filed a complaint against the accused under Sections 120-B, 193 and 196 read with Section 109 of the IPCand Section 277 and Section 278 of the I.T. Act, 1961, alleging that accused 2 to 9 conspired together to fabricate the day book and ledger of accused 1 with a view to suppress genuine evidence in the course of the income-tax proceedings. The ITO also contended that accused 2 to 9 fabricated documents and used them as genuine documents and gave false statements before the ITO knowing them to be false and, in this act, respondent 9 abetted the offence while submitting the return for the year 1965-66.
4. Witnesses were examined on behalf of the prosecution. P.W. 1 was working as ITO, Circle No. 2, Salem-4, from July 1, 1965, to August 31, 1967. His evidence was that Messrs. Jayalakshmi and company was a partnership-firm doing business in warping and sizing yarn at Tiruchen-gode. P.W. 1 issued notice to the firm and also its partners to file the return for the assessment year 1965-66. One of the managing partners, namely, accused 3 (Thiruvengadam), received the notice and requested the department for extension of time to file the return. Thereafter, the return for the year 1965-66 was filed on January 4, 1966, and the income was shown as Rs. 79,508. Accused 2 to 8 signed the declaration. The ITO also received a profit and loss statement for the period April 1, 1964, to March 31, 1965. This was signed by Doraisamy. The turnover for the sized yarn was mentioned as Rs. 14,47,921.52. The net profit was shown as Rs. 72,262.34. Similarly, returns were filed by accused 5, 6, 7 and 8. The ITO found that there was some omission in the account and when the officer asked the accused whether they had any evidence to show the debits and credits, rough cash books were filed by them. The ITO, while scrutinizing the accounts, also found that the accused had adjusted certain amount which they could not account properly. Therefore, the above prosecution launched by the department.
5. The accused were examined. The learned Magistrate, after considering the evidence adduced before him and also perusing the documents, found that they were not looking after the management of the firm as per Ex. P-1. He also observed that there is no evidence that accused 4 to 8 looked after the management of the company or the accounts. Accused 2 to 8 contended that whatever was given for their share was included in the return and they did not verify the accounts and the accounts were signed by the auditor. The learned Magistrate as stated above after scrutinizing the evidence, both oral and documentary, found that the prosecution has not proved the case against accused 4 to 8 since they had no knowledge about the fabrications in the accounts. He also found that there is no evidence that the accused conspired together to commit the offence in order to make them liable under Section 120-B of the IPC for conspiracy. Accused 9, the accountant, admitted that he committed the mistake. Accused 3 had signed letters, Exs. P-3 and P-4, stating that there is a book difference. But the officer found that the return was filed without any difference in the accounts. Considering all these circumstances, the Magistrate acquitted accused 4 to 8 of all the charges but he found accused 1 (firm) guilty of the chargers under Sections 193 and 196 of the IPC and convicted and sentenced it to pay a fine of Rs. 1,000. In regard to the others, the Magistrate found that they had not committed the mistake wantonly and, considering the facts and circumstances of the case, he found accused 2 and 3 guilty of the charges under Sections 193 and 196 of the IPC and Section 277 of the I.T. Act and sentenced them to undergo imprisonment till the rising of the court and to pay a fine of Rs. 1,000 each, in default to undergo rigorous imprisonment for two months under Sections 193 and 196 of the IPC and to undergo imprison ment till the rising pf the court under Section 277 of the I.T. Act. He found accused 9 guilty of the charges under Sections 193 and 196 read with Sections 109 of the IPC and 278 of the I.T. Act and sentenced him to undergo imprison ment till the rising of the court and to pay a fine of Rs. 500 in default to undergo rigorous imprisonment for two months under Sections 193 and 196 read with Section 109 of the IPC and to undergo imprisonment till the rising of the court under Section 278 of the I.T. Act.
6. As stated above, excepting accused 2 and 3, who are the managing partners and accused 9 who was the accountant, the rest of the accused who are partners of accused 1 (firm) were acquitted. This appeal is preferred by the department (income-tax) for enhancement of the sentence imposed on the respondents-accused.
7. The learned counsel appearing for the appellant brought to my notice Sections 277 and 278 of the I.T. Act, 1961. Section 277 deals with submission of false statement in the declaration to the income-tax department and the punishment that should be awarded. Section 278 deals with the abetment of false return, etc., and it also deals with the term of punishment. The learned counsel for the appellant also brought to my notice Section 377(2), Cr. PC whereunder he is empowered to prefer an appeal to this court on the question of sentence, if it is inadequate.
8. The contention of the learned counsel appearing for the appellant is, that, though the learned Magistrate has awarded sentence on the respondents-accused, the sentence awarded is very low and is not adequate considering the nature of the offences committed by them. According to him, the sentence should have been more and the learned Magistrate was generous in awarding a lesser sentence on the respondent-accused.
9. It should be seen that the learned Magistrate has exhaustively dealt with in detail the offences committed by the accused. While awarding sentence, he has also taken into consideration Ex. P-50, namely, the proceedings of the IAC of Income-tax, Salem Range, Salem 4, wherein penalty was imposed on the firm, Jayalakshmi and Company (accused 1), to the tune of Rs. 13,000 for not keeping the accounts in a proper manner or in the manner known to law. Keeping all these considerations in his mind, the learned Magistrate has awarded sentence as stated above and I do not think that this is a case where this court should interfere because the respondents-accused were penalised twice, firstly, the income-tax department directing them to pay a sum of Rs. 13,000 and, secondly, in the criminal proceedings against which this appeal arises, fine and imprisonment till the rising of the court was also imposed. Therefore, the Magistrate has taken all these things into consideration and has awarded sentence which sentence I do not find suffers from an infirmity.
10. In judging the adequacy of the sentence, it is necessary that the nature of the offence, the circumstances of its commission and also the age and character of the offender have to be considered, for the courts and the law are functionally bodyguards of the people against bumptious power, official or other.
11. In this case, the accused were already awarded sentence; in other words, the income-tax department imposed on accused 1 a penalty of Rs. 13,000 for keeping irregular accounts and the department not content with this, has also taken criminal proceedings against the accused, and the learned Magistrate has awarded sentence on the firm (accused 1) and also on accused 2, 3 and 9. The learned Magistrate after considering the evidence and perusing the documents in this case has awarded the sentences and I do not think that this court can interfere in the sentence awarded by the learned Magistrate. In these circumstances, I dismiss this appeal.
12. Mr. C.K. Venkatanarasimhan, the learned counsel appearing for the department, has been fair in placing all the materials before this court and this court records its appreciation.
Tr. Crl. A. No. 447 of 1976 :
13. This is filed by accused 1 to 3 against the sentence imposed by the Judicial First Class Magistrate, Salem Counsel appearing for the appellants in this appeal has made an endorsement to the effect that he is not pressing this appeal. Therefore, this appeal is dismissed.