Madras High Court
Kumudini Subhan And Anr. Meena Kumari ... vs Chief Commissioner (Admn.), ... on 28 January, 1987
Equivalent citations: [1992]198ITR390(MAD)
JUDGMENT Ramalingam, J.
1. These petitions have been filed by various persons who are accused in C. C. No. 179 of 1985, on the file of Additional Chief Metropolitan Magistrate (Economic Offences Wing-I), Egmore, Madras, to call for the records and quash the said proceedings in the following circumstances.
2. Accused Nos. 9 and 13 have filed Crl. M.P. No. 3409 of 1985, accused Nos. 11 and 12 have filed Crl. M.P. No. 3412 of 1985, accused Nos. 18 and 20 have filed Crl. M.P. No. 3679 of 1985, accused Nos. 6, 7 and 10 have filed Crl. M.P. No. 3695 of 1985, accused Nos. 1 to 5 have filed Crl. M.P. No. 3711 of 1985 and accused Nos. 8 and 19 have filed Crl. M.P. 3879 of 1985.
3. The complainant is the Chief Commissioner (Admn.), Commissioner of Income-tax, Tamil Nadu I, Madras-34. A-1, N. K. Mohnot is an income-tax practitioner and is the son of A-3, Panchandas Mohnot. A-2 is a Hindu undivided family consisting of accused Nos. 1, 3, 4, A-5 and A-11. A-4 Sanjay Prakash Mohnot and A-5, Anjay Prakash Mohnot, are brothers of A-1 and A-11. Smt. Meena Kumari Mohnot is the mother of A-1 and wife of A-3. A-12, Smt. Hema Mohnot, is the wife of A-1 and they were married of June 22, 1983. Accused Nos. 6 and 7, viz., Mani and Ramani, are accountants of A-1. A-8, M. A. Subban, is A-1's friend. A-9, Smt. Kumudhini Subban is A-8's wife. A-10, Prakashchand K. Jain, is not related to the other accused persons. A-13, Smt. Balina Knight B. Rodrigues, is also an employee of A-1. Accused Nos. 14 and 15, viz., P. V. Jagadeesan and V. Sundararaj, are employees of the Madras Race Club. A-16, Smt. V. Dhanalakshmi, is the mother of A-15. A-17, A. C. Dhandapani, is also an employee of the Madras Race Club. Accused Nos. 18 to 20, viz. S. K. Bhandari, Narakanchand P. Jain and M. M. Bijalani, are said to have aided A-1 in the commission of the various offences alleged in the complaint.
4. The case of the complainant is this. The winners in the horse races conducted by the Madras Race Club at Madras and at Ootacamund as well as in the inter-venue races are paid the winning amounts after deducting towards income-tax proportionate amount from the winning as laid down by the Income-tax Act, 1961, hereinafter referred to as "the Act". The winners are given a temporary receipt for deduction of income-tax at source. The winners have to sign in token of acknowledgment in the temporary receipt. Thereafter, the race club would remit the entire deductions to the Central Government account. The race club also issues a tax deduction certificate, hereinafter referred to as "T.D.S.", which is sent usually by registered post acknowledgment due. The particulars of T.D.S. are entered in a register maintained by the race club. In the event of the original T.D.S. being lost, a fresh application has to be given to the race club, which would verify the receipt or otherwise of the original T.D.S. and after completing investigation, it would issue a duplicate T.D.S. An assessee who happens to be a winner in the races has to enclose the original or duplicate T.D.S. with the income-tax return for payment of the tax or, if no tax is due, to get a refund order.
5. The further case of the complainant is that A-1 along with the other accused persons entered into a conspiracy between January, 1979, and June, 1984, to obtain duplicate T.D.S. on false pretence and also obtained some original certificates from the race club with the help of A-14, Jagadeesan, A-15, Sundararaj, and A-17, Dhandapani, that accused Nos. 14, 15 and 17 forged the signatures of the original winners and made false documents with the help of the other accused, that A-1 filed income-tax returns containing false declaration and statements before the income-tax authorities, that the income-tax authorities were induced to act on such false, forged and untrue documents and issue refund orders and thereby attempted to cheat the Government and the income-tax authorities. The further case of complainant is this : after obtaining the income-tax deduction certificate, the accused persons obtained refund orders and encashed them by impersonating the original winners and opening false accounts in banks, and took the money for their own use.
6. A search was conducted on November 26, 1983, under the provisions of the Income-tax Act in the residence of accused Nos. 1 to 5, 11 and 12, at Flat No. 65 Bhaiya Complex, 286, Purasawalkam High Road, Madras-7. The office of Mohnot and Co., 16, Ramanan Road, Madras-79, was also searched. Locker No. 27 in Bank of Rajasthan, Sunkurama Chetty Street, Madras-1, was also searched.
7. During the search of residential premises, an income-tax office file bearing G.I. No. 6730/B IV(6) relating to an assessee by name S. K. Balu Chettiar, individual, residing at No. 61, C. B. Road, Madras-21, was found. The file is said to have been stolen from the Income-tax Officer, City Circle IV(6), Kannammai Buildings, No. 661, Anna Salai, Madras-6, and it contained income-tax assessment records for the assessment year 1959-60 to 1980-81 and wealth-tax assessment records for the assessment year 1972-73 to 1979-80. Several pass books and cheque books with signed blank leaves of various banks and relating to various bogus transactions including the account books of fictitious and non-existing firms such as Nagasubbiah and Co., Hasan and Co., written by A-7, Ramani, were also found and seized. Pay-in-slips relating to Ashoka Traders, air tickets in the names of N. K. Mohnot, A-1, and M. A. Subban, A-8 to Trivandrum, bus tickets along with the accounts slips written by N. Mani, A-6, and records relating to Hindustan Electronics, a proprietary concern of A-12, Smt. Hema Mohnot, and other records were seized. A panchnama was also prepared for the records seized from Mohnot and Co. and the same was acknowledged by A-1. Statements from accused Nos. 1, 4, 5 and 12 as provided under section 132(4) of the Act have been recorded. A-4, Sanjay Prakash Mohnot, and A-1 N. K. Mohnot, were specifically questioned as to the hiring of locker No. 27 in Bank of Rajasthan at Sunkurama Chetty Street, Madras-1. The locker is alleged to have been hired in the name of A-4 and A-1 had continuous power of attorney from A-4 to operate the said locker; but both of them denied that there was any locker in the Bank of Rajasthan or in any other bank.
8. Locker No. 27 in the Bank of Rajasthan was sealed, and A-1 produced the key of the locker before the authorised officer on January 24, 1984, in pursuance of a letter written to him. The locker was opened in the presence of A-1, bank officers and witnesses. The contents of the locker were bundled up and taken to A-1's house and inspected in the presence of A-1 and one Vijayakumar Francis, and they where listed and a panchanama was prepared, duly acknowledged by A-1. Among the contents of the locker, there was a cover containing pieces of papers with carbon of signatures of certain persons, blanks letter-head forms of Hindustan Produce Co., Trivandrum, copies of the Income-tax Department's internal audit objections in the case of two firms, M/s. Naga Subbiah and Co. and M/s. Babu & Co. which are alleged to be not only objectionable but also confidential in nature, the indemnity bond prepared in the case of one V. Krishnan, some blank stamp papers purchased in the same name of Babu and Co., acknowledgment give by the Department for two income-tax returns filed in V. Krishnan's case, the bank pass books, cheque books, pay-in-slips pertaining to the accounts opened in the name of N. Purushothaman and D. Bellia in the Trivandrum Co-operative Urban Bank Ltd., pass book for the current account opened in the name of P. F. Das and Sons in Canara Bank, Broadway, the pass books and cheque books standing in the name of A-1, promissory notes standing in the names of M/s. Asoka Traders, Hindustan Electronics, etc., were found along with other documents and certain jewels. Certain receipts signed by A-16, V. Dhanalakshmi, mother of A-15, who is an employee of the race club, acknowledging receipt of the money were also found.
9. The probe made by the Department revealed that A-1 obtained information through accused Nos. 14, 15 and 17 about high amounts deducted from high dividends, especially jackpots, paid to the winners in the past years and A-1 applied for duplicate T.D.S. certificates to the race club and obtained the same with the aid of accused Nos. 14, 15 and 17. In some cases, original certificates intended for genuine winners were handed over to A-1. The Department further found that consideration for these illegal and unlawful acts were paid through A-16, wife of A-15. It is further found that A-16 passed receipts to A-1 for some of the consideration received. A-1 caused applications to be made to the Madras Race Club for issue of duplicate T.D.S. on the ground that the original was lost or was not received. The applications were processed by A-14, Jagadeesan, and signed by the secretary or the assistant secretary who caused duplicate T.D.S. certificates to be issued with the aid of accused Nos. 15 and 17. A-17 permitted A-1 or his agents to trace out the signatures of the original winners from the temporary T.D.S. certificates issued to them. In some cases, the original T.D.S. itself was not despatched to the real winner and was retained and given to A-1.
10. It was further found that A-1, on obtaining duplicate or original T.D.S. as the case may be, would cause false and forged records to be made by accused Nos. 6 and 7 and other accused and file returns before the Income-tax Officers, showing non-taxable income or less taxable income and obtained refund orders from the Department by false representations to the effect that the winners have not been assessed earlier. It is further found that A-2, Hindu undivided family, of which A-3 is the karta, and A-9, wife of A-8, have issued false certificate of employment and salary. The refund orders fraudulently obtained were credited to the accounts of A-2 and one Ashoka Traders wherein A-4, brother of A-1, is said to be a partner. A-13, another employee of A-1, has encashed the cheques directly.
11. A-8, M. A. Subban, is alleged to have admitted the issue of false certificate by A-9 and accompanied A-1 to Trivandrum for filing false and forged income-tax returns. Accused Nos. 10, 13, 18, 19 and 20 are alleged to have aided A-1 by introducing fictitious persons and have taken active part in the opening of accounts in banks and also in drawing of the money realised on the basis of the income-tax refunds orders.
12. It is also found that, in pursuance of the conspiracy, a letter dated February 11, 1982, was filed before the Madras Race Club, for the issue of a duplicate T.D.S. certificate by a person professing to be N. Manickam, residing at New Building, Mannurpet, Ambattur, Madras-50, for Rs. 17,726 (as per the original). It was found that tax source (sic) since the said person happened to be a winner in jackpot in the race conducted on May 27, 1979. The said letter dated February 11, 1982, was forwarded by the race club authorities to A-14. A-14 with the aid of A-15, issued of duplicate T.D.S. certificate dated March 12, 1982. A-11 armed with the said T.D.S. certificate filed income-tax return for the assessment year 1980-81, before the Income-tax Officer, City Circle IV(7), Madras, in the name of the said Manickam. The power to represent Manickam was accepted by A-1 and he signed the covering letter and the statements subsequently filed during the course of the assessment proceedings. A-1 accepted service of the statutory hearing notice issued under section 143(2) of the Act. The return was filed giving the address as No. 54, Mulla Sahib Street, Madras-1. The assessment was completed on February 20, 1982, and a refund order bearing No. A 014509/B/1/450824 for Rs. 15,756 was issued. The said refund order had been received and acknowledged by A-6 on behalf of Mohnot and Co. The refund order was credited in the account of A-2, Hindu undivided family. The signatures were identified and guaranteed by A-2 represented by karta, A-3. The enquiry made by the Department revealed that the said Manickam, residing at Mannurpet, Madras-50, winner of jackpot was issued the original T.D.S. certificate bearing No. 1824 and that he filed an income-tax return before the Income-tax Officer, City Circle VII(8), through an advocate, enclosing another T.D.S. certificate for a jackpot amount of Rs. 17,726. The assessment was completed on May 19, 1980, and a refund order was issued to the said Manickam for Rs. 15,756. The refund order and the demand for the tax were received by his advocate.
13. Similarly, one Jayachandran, residing at No. 28 Nellikuppam, Ennore, Madras-57, won a jackpot prize of Rs. 38,079 in the race held on June 16, 1979. A sum of Rs. 13,687 was deducted as tax at source. He filed the income-tax return before the Income-tax Officer, City Circle VII(8), Madras, and got a refund to Rs. 8,483 on August 4, 1980. However, a fake application in the name of P. Jayachandran, was made to the Madras Race Club on March 30, 1987, for issue of a duplicate T.D.S. certificate and with that aid and connivance of accused Nos. 14, 15 and 17, the duplicate T.D.S. certificate has been received by the Income-tax Department on April 3, 1982. A return was alleged to have been filed before the 2nd Income-tax Officer, Special Survey Circle, Madras, in the same name of Jayachandran, in the address referred to above on March 13, 1982, and a sum of Rs. 13,851 was claimed as refund, in the jackpot held on June 16, 1979. A-1 represented while filing the papers and gave an undertaking that the T.D.S. certificate shall be produced at the time of hearing. A statutory notice under section 143(2) of the Act was issued. As the assessee and the representative were not present, the assessment was complete estimating the income at Rs. 39,000 and no refund has been ordered.
14. The locker that the alleged to have been operated by A-1 in the name of A-4, when searched, revealed an acknowledgment for having filed returns for P. Jayachandran before the Second Income-tax Officer, Special Survey Circle, Madras. A carbon copy of the statement of total income for the purpose of income-tax filed along with the said return was also found in the said locker. One of the carbon traced signatures from temporary T.D.S. certificate that was found in the said locker is found to be that of the aforesaid Jayachandran.
15. Further enquiry also disclosed that A-1 has filed a return in the name of the aforesaid Jayachandran as an assessee before the Income tax Officer, 'B' Ward, Salaries Circle, Trivandrum, on September 30, 1982, with a xerox copy of a duplicate T.D.S. certificate obtained by him with the aid of accused Nos. 14, 15 and 17. The return filed by A-1 had been authenticated by A-1 and it contained an enclosure, viz., a salary certificate issued by P. P. Das & Sons. Imports and Exports and Commission Agents, No. 3 Nattupillaiyar Koil Street, Madras-1, alleged to have been signed by one of its partners, P. P. Das, certifying that P. Jayachandran was employed with them during the relevant period. The address of Jayachandran has been given as C/o. P. P. Das and Sons, Thirumala Junction, Trivandrum-6. Enquiry made by the Department revealed that there was no such office at the address given at Trivandrum and the aforesaid Jayachandran never worked in any of the office there and that he was found to be employed at the Ennore Founder is Ltd. Ennore, Madras-56, during the relevant period.
16. Further investigation revealed that another return was filed before the Income-tax Officer, Circle I(2) Villupuram, for an alleged firm, Hassan and Co., at Tindivanam. The return describes Jayachandran as one of the partners of the said firm and a photostat copy of the duplicate T.D.S. was enclosed with the return. Enquiry by the Department revealed that there is no such firm existing at Tindivanam during that period. A-7, Ramani, is alleged to have written certain accounts books and they have been seized from the residence of A-1. The returns alleged to have filed in the name of Hassan and Co. were found forged. Statement were filed by A-1 in connection with the return of the said firm through his clerk, A-6, before the Income-tax Officer, Villupuram, A-1 has represented a bogus firm and has used false documents containing forged signatures to use them in proceedings before the Income-tax Officer, Villupuram. One more return in the name of Jayachandran has been filed with the Income-tax Officer, Salaries, Circle II(4), Madras, on May 20, 1982. The acknowledgment for having filed such a return and the carbon copy of the statement filed along with the return are found in the locker. One Purushothaman of Trivandrum has also won a jackpot in the races held at Ooty. Though he was given a temporary T.D.S. certificate, he never received the original T. D. S. for the deduction of tax on the winnings. The original T.D.S. certificate was found to have been filed before the Income-tax Officer, 'B' Ward, Salaries Circle, Trivandrum, on September 24, 1982. The return is said to have been authenticated and signed by Purushothaman. The return had enclosures one of which carried information to the effect that Purushothaman was an employee at Trivandrum during the relevant time. The certificate had been signed by Mrs. Kumudini Subhan, A-9, wife of M. A. Subban, A-8, as proprietress of M/s. M. A. Exports Consultants, Madhavi Mandram, Sankar Road, Trivandrum-10 It was brought to light during the enquiry that there was no firm in the address stated above and that Mrs. Kumudini subhan, A-9, never lived or worked at the above address. The income-tax tax Officer, 'B' Ward, Salaries Circle, Trivandrum, believing the aforesaid false representation, and acting on the false certificates. The refund order was deposited in a spurious account opened in the name of M. S. Purushothaman in the Trivandrum Urban Co-operative Bank Ltd. The pass book, the cheque book and the other documents pertaining to this account have been seized from the locker in the Bank of Rajasthan which stood in the name of the fourth accused who is brother of A-1. According to the complainant, the cheque leaves contained forged signatures of M. S. Purushothaman and one of the cheques had been issued to Asoka Traders, a bogus firm, in which A-5 brother of A-1, had been a partner.
17. On further enquiry, it was found that M. S. Purushothaman had obtained a duplicate T.D.S. certificate since he did receive the original T.D.S. certificate, and filed the duplicate T.D.S. before the Income-tax Officer obtained a refund order. The seized documents revealed that accused Nos. 1 and 8 travelled by plane to Trivandrum during the relevant period. The documents seized from the locker clearly make out a case of conspiracy among accused Nos. 1, 4, 5, 8 and 9 in pursuance of the said conspiracy they cheated the Income-tax Officer, 'B' Ward Salaries Circle, Trivandrum.
18. The enquiry made by the complainant also revealed that one K. Natarajan won a jackpot in an inter-venue betting at Madras on October 2, 1979 and was issued a T.D.S. certificate on October 10, 1979. He filed his return before the concerned Income-tax Officer on May 27, 1980, through his authorised representative, M/s. Sadguru and Co., Madras, and an assessment order was passed, refunding an amount of Rs. 61,846. However, it is found that A-1 obtained a duplicate. T.D.S. certificate on behalf of the said Natarajan for a sum of Rs. 65,844 on December 6, 1981, with the active assistance of accused Nos. 14, 15 and 17. A return was filed on the basis of the aforesaid duplicate T.D.S. on March 7, 1983, before the Income-tax Officer, City Circle III(10), Madras, in the name of K. Natarajan. Later on, a letter was filed before the Income-tax Officer, City Circle III(10) on August 31, 1983, wherein it was stated that K. Natarajan had shifted to Bombay and, therefore, the return filed should be sent to the Income-tax Officer, Special Survey Circle, Bombay. The return filed by A-1 allegedly in the name of K. Natarajan was, therefore, forwarded to Bombay. At Bombay, another return which is said to be duplicate of the return filed on March 7, 1983, had been filed before the Income-tax Officer, Special Survey Circle I(10), on September 15, 1983. According to the complaint, the aforesaid two returns before the Income-tax Officer bear the forged signatures of the said Natarajan and that A-1 has filed an authorisation. A-1 is also alleged to have filed an affidavit along with the said return, knowing the contents to be false. He also filed an indemnity bond bearing the signature of the said Natarajan. The enquiry made by the Income-tax Officer, Special Survey Circle, Bombay, revealed that the address given by the person was false and, on that ground, referred the matter to Madras. The enquiry at Madras revealed that the copy of the account of K. Natarajan belongs to a fictitious and non-existing concern called M/s. Emkay Investment, signed by A-18 as its proprietor. Another copy of the said account had been signed by A-10, Prakash Chand Jain. The latter dated October 22, 1983, from Mohnot and Co., signed by A-1, states that A-1 has produced one discharged promote relating to the said transaction. During the course of assessment proceedings, accused Nos. 1 and 19 appeared before the Income-tax Officer and impersonated K. Natarajan.
19. The complainant further proceeds to illustrate other names of persons who won at the horse races either at Madras or at Ooty and the refund orders that they have obtained from the concerned Income-tax Officer as well as the part played by the accused persons in getting income-tax refund orders once again, either at Madras or Trivandrum or Bombay, either on the basis of the original T.D.S. certificate in case they had not been issued to the actual winners, or on the basis of the duplicate T.D.S. certificate in cases where the original had been issued to the actual winners, in pursuance of their conspiracy alleged to have taken place between January, 1979, and June 1984. The complainant further mentions as to how the T.D.S. certificate as well as some original certificates have been obtained on false pretences from the race club with the aid of accused Nos. 14, 15 and 17 and how they have forged signatures of original winners and made false documents with the aid of the other accused persons and filed returns containing false declaration before the Income-tax Officers mentioned above. The offences punishable and enumerated in complaint are under section 120B, Indian Penal Code read with section 420, 467, 468, 471, 181, 182, 177, 193, 196, 197, 198, 199, 200, 201, 380, 379, 419, 420 read with section 511, Indian Penal Code and section 277 of the Income-tax Act.
20. The complaint was presented on February 23, 1985, and taken on file on March 7, 1985, by the Additional Chief Metropolitan Magistrate (E.O.I.) Egmore, Madras-8. A rubber stamp put on the docket sheet attached to the complaint reads as follows :
"Taken on file. Accused absent. Issue summons to the accused for 13-3-1985."
21. On March 13, 1985, the following endorsement was made on the docket sheet :
"A-2 company, A-1, A-4, A-5, A-7, A-8, A-13, to A-17 and A-19 present. Copies furnished. Summons not served against A-3, A-11 and A-12. Issue fresh summons to A-3, A-11 and A-12. A-6, A-9, A-10, A-18 and A-20 absent. Petition filed under section 317, Criminal Procedure Code, allowed and absence condoned. Call On April 16, 1985. Accused and counsel present were informed."
22. Likewise, the case was adjourned to April 16, 1985, April 29, 1985, and May 22, 1985. Thereafter, these petitions have been filed to quash the proceedings against the accused persons pending in C. C. No. 179 of 1985, on the file of the Additional C.M.M. (E.O.I.) Madras, on various grounds.
23. The main grounds that were urged on behalf the accused persons are as follows :
1. While taking the complaint on file, the Magistrate has not applied his mind to the materials contained in the complaint before passing the order for issue of process, since he has put only a rubber stamp the contents of which have been extracted above, and as such, cognizance and issue of process are vitiated.
2. The offences under the Indian Penal Code have to be investigated, enquired into and tried by the provision of the Criminal Procedure Code (Section 4). The filing of the complaint and prosecution with out any investigation under the Criminal Procedure Code is vitiated.
3. Summons sent to the accused persons mention only the offence under section 277 of the Income-tax Act and they do not contain the offences under the Indian Penal Code, and, therefore, the complaint cannot be enquired into.
4. No ingredient of the offence under section 120B, Indian Penal Code, is made out on the materials on record.
5. The complaint discloses not only misjoinder of charges but also misjoinder of persons.
6. Prosecution cannot be launched under section 277 of the Income-tax before complying with the provisions under section 271(1)(c) and 273(a) of the Income-tax Act and as such the prosecution is premature. As a natural corollary, the prosecution defeats the right given to the accused persons under section 279(1A) of the Income-tax Act.
7. The first accused cannot be held liable under section 271(1)(c) since only an assessee may be made liable under the said provision.
8. The complaint regarding the offences pertaining to section 172 to 178, Indian Penal Code, can be made only by a public servant or by his subordinate to whom the complainant is administratively subordinate. The complainant, viz., Chief Commissioner of Income-tax, is not an appellate authority to the Income-tax Officer, who is discharging a quasi-judicial and as such the complaint is not maintainable.
9. The offences under section 199 to 201, Indian Penal Code, are alleged to have been made before the Income-tax Officer, who is a court as contemplated under section 136 of the Act and the complaint by the Chief Commissioner (Admn.) is not maintainable.
24. Learned counsel appearing for the prosecution submitted that all these contentions can be raised by the accused persons before the trial court and this is not the stage when this court should exercise the power vested in it under section 482, Criminal Procedure Code. It is open to the accused persons to appear before the trial court and urge all the points in their defence as provided under section 245(1) or (2) Criminal Procedure Code. After taking evidence referred to in section 244, Criminal Procedure Code, he further submitted that it is open to accused persons to approach this court under section 482, Criminal Procedure Code, to quash the charges, in case the charges framed are without any basis.
25. It is true that the accused persons have got two remedies available to them. One is as provided under section 245(2), Criminal Procedure Code, in which the Magistrate can discharge the accused at any previous stage of the case for reasons to be recorded in case the Magistrate considers the charge to be groundless. However, in the case before us, that stage has passed since the Magistrate has issued summons to the accused persons. Hence, it is not open to the accused persons to make out a case for discharge as provided in section 245(2), Criminal Procedure Code. As far as the right available to the accused persons under section 245(1), Criminal Procedure Code, is concerned, that will be available only if all the evidence referred to under section 244, Criminal Procedure Code, is recorded. There are instances where this court has exercised the power vested in it under section 482, Criminal Procedure Code, on grounds where this court finds that the proceedings have to be quashed to achieved salutary public purpose, to wit, the court proceedings ought not to be permitted to degenerate into a weapon of harassment or prosecution. Hence, the court has to keep in mind the pith and substance of the provisions of section 482, Criminal Procedure Code, while dealing with petitions filed under this section. With this background, I proceed to decide whether the points raised by learned counsel for the accused persons exercise of the power vested under section 482, Criminal Procedure Code.
26. The contentions raised by learned counsel for the accused persons may briefly be grouped as under :
(a) The Magistrate has not applied his mind while spending the summons containing an offence under section 277 of the Income-tax Act alone, whereas the complaint mentions various offences arising under the Indian Penal Code also, and as such as accused persons are taken by surprise when they appear before the court, inasmuch the summons issued to them refer only to section 277 of Income-tax Act.
(b) The Chief Commissioner (Admn.) and Commissioner of Income-tax, Madras, is not competent to file a complaint with reference to the offence alleged to have taken place at Trivandrum and at Bombay, since the complainant is not the administrative head of the Income-tax Offices of those places.
(c) For an offence mentioned under section 195(1)(b), Criminal Procedure Code, the complainant is not competent to file a complaint, since he is not a court.
(d) Offences arising under the Indian Penal Code cannot form the basis of the complaint file by the Chief Commissioner because any statement recorded from witnesses during the enquiry or probe will be received in evidence and, in case the witness go back on their statements, they will be prosecuted for perjury and thereby the witnesses will be compelled to speak only in support of the Department. In case the offence is investigated by the police, the witnesses will be at liberty to state the truth before the court and they are not prevented from going back on the contents of the statements recorded by the investigating agency.
(e) Offences relating to section 419 read with sections 511, 177 and 182, Indian Penal Code, cannot form the basis of the complaint, since the consent of the State Government or that of the District Magistrate concerned has not been obtained in writing to initiate the proceedings.
(f) The complainant has not filed the complaint as a public servant in discharge of his official duties or as a court.
(g) The cognizance of the complaint, without examination of the complainant, is vitiated.
Point (a) : I see no merit in the same. It is no doubt true that the summons only mention the offence under section 277A of the Income-tax Act, but each of the accused persons has been given a copy of the complaint which mentions in detail the offences committed by the accused persons under the Indian Penal Code as well. I am told that this is the procedure followed uniformly by the courts below. Inasmuch as each one of the accused persons has been supplied with a copy of the complaint before the examination of the witnesses, the mentioning of the offence under section 277A of the Income-tax Act alone in the summons has not prejudiced the said accused persons in any way and cognizance, therefore, cannot be said to be bad.
Point (b) : I find some force in the same. The basis of the argument is based on section 195(1)(a)(iii), Criminal Procedure Code. The complainant is not administratively superior to the Income-tax Officer at Trivandrum or Bombay, before whom some offences are alleged to have been committed. Therefore, the charges with reference to the offences alleged to have been committed before the Income-tax Officer, Trivandrum and Bombay, are liable to be quashed, except the offence of criminal conspiracy relating to the offences that have been committed before the Income-tax Officers situated at various places in Tamil Nadu. This does not mean that the prosecution cannot let in evidence with reference to the conspiracy that had taken place outside the State of Tamil Nadu. In that view of the matter, I find that the offences alleged to have been committed by the accused persons outside the State of Tamil Nadu, viz., in Trivandrum and Bombay, more fully referred to in paragraphs 8, 10(3), 11(1) to (3) and 12(2) of the complaint, cannot be tried by the trial court except to the extent of letting in evidence as to the offence of conspiracy that had taken place on those days and places. As such, the complaint with reference to the main offences mentioned in the aforesaid paragraphs is quashed.
Point (c) : Learned counsel for the petitioners contended that the Chief Commissioner (Administration), Commissioner of Income-tax, Tamil Nadu I, Madras-34, is not competent to file a complaint for offences mentioned in section 195(1)(b), Criminal Procedure Code, since the complainant is not a court. The basis for the argument is the retrospective amendment made to section 136 of the Income-tax Act by the Finance Act, 1985, with effect from April 1, 1974. As per the amendment, every income-tax authority is considered to be a civil court for the purpose of section 195 of the Criminal Procedure Code, but not for the purpose of Chapter XXVI of the Code.
27. It is no doubt true that, as per the amendment, every income-tax authority shall be deemed to be a civil court for the purposes of section 195, Criminal Procedure Code. But, in order to attract the provisions of section 136 of the Income-tax Act, there should be a proceeding pending before such income-tax authority. Here, no proceeding is pending before the complainant, namely, the Chief Commissioner (Administration), Commissioner of Income-tax, Tamil Nadu I, Madras-34, during the relevant time. As such, there cannot be a complaint for offences mentioned in section 195(1)(b) of the Criminal Procedure Code. Section 195(1)(b) of the Code of Criminal Procedure reads as follows :
"195. (1) No court shall take cognizance - ....
(b) (i) of any offence punishable under any of the following sections of the Indian Penal Code (45 of 1860), namely, sections 193 to 196 (both inclusive), 199, 200, 205 to 211 (both inclusive) and 228, when such offence is alleged to have been committed in, or in relation to, any proceeding in any court, or
(ii) of any offence described in section 463, or punishable under section 471, section 475 or section 476 of the said Code, when such offence is alleged to have been committed in respect of a document produced or given in evidence, in a proceeding in any court, or
(iii) of any criminal conspiracy to commit, or attempt to commit, or the abetment of, any offence specified in sub-clause (i) or sub-clause (ii), except on the complaint in writing of that court, or of some other court to which that court is subordinate.
195. (2) Where a complaint has been made by a public servant under clause (a) of sub-section (1), any authority to which he is administratively subordinate may order the withdrawal of the complaint and send a copy of such order to the court; and upon its receipt by the court, no further proceedings shall be taken on the complaint :
Provided that no such withdrawal shall be ordered if the trial in the court of first instance has been concluded.
195. (3) In clause (b) of sub-section (1), the term 'court' means a civil, revenue or criminal court, and includes a tribunal constituted by or under a Central, Provincial or State Act if declared by that Act to be a court for the purposes of this section.
195. (4) For the purposes of clause (b) of sub-section (1), a court shall be deemed to be subordinate to the court to which appeals ordinarily lie from the appealable decrees or sentences of such former court, or in the case of a civil court from whose decrees no appeal ordinarily lies, to the principal court having original civil jurisdiction within whose local jurisdiction such civil court is situate :
Provided that -
(a) where appeals lie to more than one court, the appellate court of inferior jurisdiction shall be the court to which such court shall be deemed to be subordinate;
(b) where appeals lie to a civil and also to a Revenue Court, such court shall be deemed to be subordinate to the Civil or Revenue Court according to the nature of the case or proceeding in connection with which the offence is alleged to have been committed."
28. I agree with the contention of learned counsel for the petitioner since no proceeding is pending before the complainant so as to call him a court and as such I quash the proceedings concerning the offences mentioned in the complaint, falling under section 195(1)(b), of the Criminal Procedure Code.
Point (d) : Learned counsel for the petitioner raised an objection on the ground that the offences arising under the Indian Penal Code cannot form the basis of the complaint filed by the Chief Commissioner, because any statement recorded from witnesses during the enquiry or probe will be received in evidence and, in case the witness go back on their statements, they will be prosecuted for perjury and thereby the witnesses will be compelled to speak only in support of the Department. Whereas in case the offences are investigated by the police, the witnesses will be at liberty to state the truth before the court and they are not prevented from going back upon the contents of the statement recorded by the investigating agency. Though there is force in the contention of learned counsel for the petitioner, learned counsel for the respondent-complainant has assured that none of the statements recorded by the Income-tax Officer over and above the facts presented before the concerned Income-tax Officer by the accused persons will be used in evidence and as such there cannot be any need for going back upon any statement, since no statements have been recorded by the Income-tax Officer pursuant to the offences which were noticed by him in the returns filed by the concerned accused persons. Since there is no bar to filing a private complaint for offences that are under the Indian Penal Code except to the extent of the offences that are excepted in the Criminal Procedure Code, I find that the offences arising under the Indian Penal Code which the complainant is competent to initiate are cognisable by the trail court and it is open to the witnesses to prove, if any statements are used against them, that such statements have been recorded from them under compulsion or by the methods not known to law.
Point (e) : Learned counsel for the petitioner contended that offences relating to section 419 read with sections 511, 177 and 182 of the Indian Penal Code cannot form the basis of the complaint, since the consent of the State Government or that of the District Magistrate concerned has not been obtained in writing to initiate the proceedings. I find that there is no substance in this argument also, because section 196, Criminal Procedure Code, deals with criminal conspiracy to commit offences punishable under Chapter VI or under section 153B or sub-section (2) of section 505, Indian Penal Code. Under section 196(2), Criminal Procedure Code, no court shall take cognizance of the offence of any criminal conspiracy punishable under section 120B, Indian Penal Code, other than a criminal conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards, unless the State Government or the District Magistrate has consented in writing to the initiation of the proceedings. The proviso to sub-section (2) states that, where the criminal conspiracy is one to which the provisions of section 195 apply, no such consent shall be necessary. A reading of section 196, Criminal Procedure Code, clearly shows that consent is necessary only for an offence of criminal conspiracy punishable under section 120B, Indian Penal Code, where the punishment provided is less than two years, and not for substantial offences. As far as criminal conspiracy is concerned, even such consent is not necessary where the criminal conspiracy is one to which the provisions of section 195, Criminal Procedure Code, shall apply. Here the complaint has been filed under section 195, Criminal Procedure Code, and hence the consent of the State Government or that of the District Magistrate is not necessary to initiate proceedings with reference to offences relating to section 419 read with sections 511, 177 and 182, Indian Penal Code.
Points Nos. (f) and (g) : The complainant is the Chief Commissioner (Admn.), Commissioner of Income-tax, Tamil Nadu I, Madras-34. It cannot be stated that he is not a public servant and that he has not filed the complaint in discharge of his official duties. Further, under the proviso of section 200, Criminal Procedure Code, when the complaint and the witnesses if public servant acting or purporting to act in the discharge of his official duties has made the complaint. Therefore, I see no merit in these two points.
29. In view of my findings in paragraph No. 26, the complaint with reference to the proceedings concerning the main offences mentioned in paragraphs 8, 10(3), 11(1) to (3) and 12(2) of the complaint which are alleged to have taken place at Trivandrum and Bombay is quashed. To make the point clear, even though the prosecution cannot prove the main offences that were alleged to have taken place at Trivandrum and Bombay, it is open to the prosecution to lead evidence with reference to any conspiracy that might have taken place to commit such offences. Likewise, in view of my findings in paragraph No. 27, I quash the proceedings concerning the offences mentioned in the complaint falling under section 195(1)(b), Criminal Procedure Code.
30. In the result, the petitions are allowed in part as stated above.