Income Tax Appellate Tribunal - Nagpur
Hazari Lal vs Emperor. on 20 April, 1937
Equivalent citations: [1937]5ITR610(NAG)
JUDGMENT
The applicant Hazarilal has been convicted under Secs. 182, 193 and 196, Indian Penal Code, and sentenced in the aggregate to one years rigorous imprisonment and fine of Rs. 1,000.
2. The Income-tax Officer issued a notice to Hazarilal under Sec. 22(2) of the Indian Income-tax Act requiring him to furnish a return, in the prescribed form and verified in the prescribed manner, of his total income during the previous year. Hazarilal submitted the return Ex. P. 1 duly verified and dated 14-5-34 showing his total income for the year as Rs. 896-4-6. The Income-tax Officer did not accept this return as correct and issued notices to Hazarilal under Secs. 22(4) and 23(2) of the Act, calling upon him (i) to produces his account (ii) to attend at the Income-tax officers office to produce or to cause to be there produced any evidence on which he relied in support of his return. Hazarilal appeared before the Income-tax Officer on 16-6-34 when he amended the return so as to show his total income for the year as Rs. 754-7-9 and he produced his accounts and also certain statements which the Income-tax Officer demanded. The Income-tax Officer came to conclusion that these accounts were false and Hazarilal was eventually assessed to an income of Rs. 8,000.
3. Hazarilal was prosecuted on a complaint by the Income-tax Officer. There are three charges. The first is that on 14-5-34 he gave information to the Income-tax Officer intending thereby to cause him to exempt him from payment of income-tax and thereby committed an offence under Sec. 182 of the Indian Penal Code. It has been contended that the offence, if any, was one under Sec. 177 of the Indian Penal Code read with Sec. 52 of the Income-tax Act and that in the absence of the Assistant Commissioners sanction, the convicti on cannot stand. Sec. 52 of the Income-tax Act provides that if a person makes a statement in a verification mentioned in certain sections of the Act which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be deemed to have committed the offence described in Sec. 177 of the Indian Penal Code. The return submitted by Hazarilal consisted of a statement of his total income during the previous year and appended to that statement was a verification clause. Sec. 52 of the Income-tax Act deals only with a false statement in the verification clause and does not cover a false statement in the statement of income to which the verification clause is attached.
4. In Sundarams Law of Income-tax in India, third edition, page 947, it is stated that the provisions in Sec. 52 is without prejudice to that in Sec. 476 of the Criminal Procedure Code under which a Court can direct a prosecution in respect of the offences mentioned in that section and committed before the Court, and that all the Officers, Assistant Commissioners and Commissioners are evidently Courts for this purpose. It was held in Re Nataraja Iyer and In re Punamchand Maneklal that an Income-tax Officer is a revenue Court, and Subhedar, A.J.C., took the view in Criminal Revision No. 193 of 1933, that it is open to the Income-tax Officer to act under Sec. 476 Criminal Procedure Code, and made a complaint of the offence committed before him. I think there is no doubt that this view is correct.
5. It is further argued that Hazarilal was bound to submit the return of income and that Sec. 182 of the Indian Penal Code applies only to information given voluntarily. Sec. 182 runs as follows : "Whoever gives to any public servant any information which he knows or believes to be false........" and there appear to me to be no ground for taking the section to mean that the information must be voluntarily given. In support of this view I may cite the decisions in Queen Empress v. Ramjee Sajabarro, King Emperor v. Lachmansingh and Sultan v. Major Welborne. In submitting a false return Hazarilal could no doubt have been prosecuted under Sec. 177 of the Indian Penal Code, but there is, as the learned Additional Sessions Judge has pointed out, an additional element in Sec. 182 and that is that the information is supplied with the intention of causing a public servant to do or omit anything which he ought not to decided on or omit if the true state of facts were known by him. It has been contended that there is no proof that the statement of income submitted by Hazarilal was in fact false, and that all that has been proved is that there were certain omissions in the account. There are concurrent findings of both courts that receipts have been inserted in order to balance the accounts and that finding must be accepted in revision. The statement of income was based on the account books, and as those account books have been found to be false it necessarily follows that the statement of the income was false. The conviction under Sec. 182 is therefore upheld.
6. The second charge was that Hazarilal on 14-5-34 in the course of judicial proceedings before the Income Tax Officer stated in evidence that the return of income given by him was a true and complete statement of the income received, which statement he either knew or believed to be false or did not believe to be true, and thereby committed an offence punishable under Sec. 193 of the Indian Penal Code. This charge is based on the verification clause attached to the statement of income. Sec. 52 of the Income Tax Act states that such a false verification is an offence under Sec. 177 of the Indian Penal Code. The lower Courts, however, have held that it amounted to giving false evidence in the proceedings before the Income tax Officer and is therefore an offence under Sec. 193 of the India Penal Code. Sec. 37 of the Indian Income tax Act provides that any proceedings before an Income tax Officer under Chapter IV shall be deemed to be a judicial proceeding within the meaning of Secs. 193 and 228 and for the purposes of Sec. 196 of the Indian Penal Code. I dont think that the proceedings before the Income tax Officer cam be said to start until there is some enquiry into the income of the assessee, and in my opinion a statement made in the return of income is not evidence given in a proceeding before the Income tax Officer. Sec. 52 of the Income tax Act provides for the punishment of such an offence, making it punishable under Sec. 177 of the Indian Penal Code and from this it appears to me that it was not intended that it should also be punishable under Sec. 193. On the second charge therefore Hazarilal must be acquitted.
7. The third charge is that Hazarilal on or about 16-6-34 in the course of judicial proceedings before the Income tax Officer corruptly used or attempted to use as true or genuine evidence which he knew to be false or fabricated and thereby committed an offence punishable under Sec. 193-196 of the Indian Penal Code. It has been contended that Hazarilal produced his account books merely because he was ordered to do so by the Income tax Officer and that he could not therefore be said to use them as evidence. I have been referred to the decisions in Assistant Judge, North Arcot v. Ramammal and Re Muthia Cheety. I agree that where a forged document has merely been produced in compliance with an order by the Court it cannot be said to have been used as evidence. But I do not think that no offence Can be committed under sec. 196 if the document has been produced in compliance with the order of the Court. As PAGE J. has pointed out in Emperor v. Mohit Kumar Mukherjee "whether there has been an user or not depends upon the circumstances of each case" and the question whether there has been a fraudulent or dishonest user is one of fact. In the present case Hazarilal in the enquiry before the Income-tax Officer relied on his accounts in his attempt to show that his return of income was true. He therefore used or attempted to use the accounts as true or genuine evidence. The conviction under Sec. 196/193 in therefore upheld.
8. Lastly it has been contended that Hazarilal is an old man who should not be sent to jail. Hazarilals age is given as 60. A sentence of imprisonment must be passed under Sec. 196. The sentence of six months rigorous imprisonment under Sec. 182 is upheld. The sentence of one years rigorous imprisonment and a fine of Rs. 1,000 awarded for the two offences under Secs. 196 and 193 will be reduced to a sentence of six months rigorous imprisonment and a fine of Rs. 2,000 for the offence under Sec. 196/193. The sentence of imprisonment will run concurrently. The sentence in the aggregate will therefore be six months rigorous imprisonment and a fine of Rs. 2,000. In default of payment of the fine the accused will undergo rigorous imprisonment for a further period of six months.
Sentence reduced.