Criminal Appeal No. 117 of 2015 · The High Court
Case Details
IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr. Rev. No. 1485 of 2016 Nemai Chandra Ghosh S/o Late Mahadeo Ghosh, resident of Village- Merah, P.O. & P.S.- Chirkunda, District- Dhanbad The State of Jharkhand -Versus- --- … … Petitioner … … Opp. Party CORAM: HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY For the Petitioner For Income Tax Deptt. For the State --- : Mr. Sanjay Prasad, Advocate : Mr. Anurag Vijay, Standing Counsel : Mr. Om Prakash, Advocate : Mr. Srijan Pandey, Advocate : Mr. Vineet Kumar Vashistha, Spl. PP --- 11/13.09.2024 2. No one appeared on behalf of the petitioner. The learned counsel for the State and Income Tax Department are present. 3. This case is being disposed of with the assistance of learned counsel appearing for the Income Tax Department and the State and upon going through the materials on record and also considering the grounds raised by the petitioner in the criminal revision petition. 4. This criminal revision has been filed against the judgement dated 12.08.2016 passed by the learned Additional Sessions Judge-VI, Dhanbad in Criminal Appeal No. 117 of 2015 whereby and whereunder the appeal preferred by petitioner has been dismissed. The petitioner has been convicted vide judgement of conviction and order of sentence dated 12.06.2015 passed by the learned Special Judge (Economic Offences), Dhanbad in C.O. Case No. 23/04 convicting the petitioner under Section 277 of the Income Tax Act, 1961 and sentencing him to undergo Rigorous Imprisonment for 6 months along with fine of Rs.10,000/- and in default of payment of fine, to further undergo Simple Imprisonment for 2 months. 5. The grounds raised by the petitioner in the criminal revision petition are as under: "(i) For that, the Judgement passed by the learned trial court as well as that of the learned appellate court below is 1 illegal, perverse and perfunctory, as such liable to be set aside. (ii) For that the judgement passed by learned trial court as well as learned appellate court below is illegal on its face itself. (iii) For that the learned trial court as well as the learned appellate court below has failed to exercise jurisdiction judiciously and as such, the judgement suffers from illegality. (iv) For that the prosecution has miserably failed to establish charge against the petitioner. (v) For that the Complainant PW-2 himself has not supported the case at all. (vi) For that the entire prosecution case is itself ill motivated in view of the fact that simple colliery worker is not deemed to be an expert to fill the technical Form-16 of I.T. ACT and he stated in show cause that he got it filled by office Assistant O.C.P. and as such, the Complainant on the basis of show cause ought to have closed the proceeding as there was absolutely no mens rea.
Legal Reasoning
(vii) For that the learned trial court has failed to consider that the offence is itself compoundable and the petitioner has option for the same. (viii) For that other and further ground shall be urged at the time of hearing." Arguments on behalf of the Income Tax Department 6.
Legal Reasoning
Learned counsel appearing for the Opposite Party - Income Tax Department, while opposing the prayer of the petitioner has submitted that the learned courts have duly considered the materials on record and there are concurrent findings with regard to the petitioner who had filed a false refund claim of Rs.35,875/- for the Assessment Year 2003-04 (Financial Year 2002-03) on the strength of forged TDS certificate and claim regarding housing loan. 7. The learned counsel has further submitted that the only defence which the petitioner has taken before the learned Court is regarding false implication, but simultaneously, the petitioner has admitted his signature on the verification of the income tax return filed. Findings of this Court 8. The prosecution case in brief is that the petitioner being an employee of Baramuri OCP, ECL, Mugma Area, Chirkunda, District- Dhanbad being a Dumper Operator derived his income from salaries 2 and is an assessee within the meaning of the Income Tax Act, 1961 having PAN No. ACVPG4382Q. The petitioner filed his Income Tax Return on 28.07.2003 by putting his signature on the verification portion of the said return before the Income Tax Department, Dhanbad vide Receipt No.6111001504 for the Assessment Year 2003-04 alongwith TDS Certificate and other documents disclosing total income from all the sources to be Rs.1,72,055/- and claimed a refund of Rs.35,875/- in the said return on the basis of TDS Certificate in Form No.16 purportedly issued on 20.05.2003 for the Financial Year 2002-03 by Sr. Accounts Officer Baramuri OCP, ECL, Mugma Area, Chirkunda as well as on the basis of loss from house property on account of interest paid on housing loan amounting to Rs.28,420/-. The claim of refund was made as excess deduction of Tax at source. It is the further case of the prosecution that on verification and enquiry from the concerned Office of Sr. Accounts Officer, Baramuri OCP, ECL, Mugma Area, Chirkunda as well as the Bank, it was found that neither the TDS Certificate as submitted by the petitioner alongwith the said return of income for the Assessment Year 2003-04 was issued from the aforesaid Sr. Accounts Officer, Baramuri OCP, ECL, Mugma Area, Chirkunda, nor any housing loan was granted to the petitioner by the Bank Of India, Chirkunda and the claim was based on fake and false documents and thus, no refund was granted. The petitioner tried to shift the burden on one Satyaban Roy, an Office Assistant of Baramuri OCP, ECL, Mugma Area, Chirkunda. It was the further case of the Complainant that the petitioner was quite aware of his income, earnings and investments and knowingly, willingly, intentionally, deliberately and with an evil motive furnished inaccurate particulars of his income and housing loan in the return for the assessment year 2003-04 under his signature on verification of the said return and thus from examination of relevant documents of the petitioner, it was apparent that he had claimed a false refund of Rs.35,875/- on the strength of forged TDS certificate and interest on housing loan, etc. and had made statement in the verification portion of his Income Tax Return for the relevant assessment year which was 3 false, which he knew to be false and himself did not believe to be true and thus he made himself liable to be prosecuted for an offence under Section 277 of the Income Tax Act. Further case of the prosecution was that the Commissioner of Income Tax, Dhanbad after considering all the facts and documents accorded sanction under Section 279(1) of the Income Tax Act, 1961 to launch a prosecution against the petitioner under Section 277 of the Income Tax Act, 1961 and authorized the Complainant to file a case under Section 277 of the Income Tax Act, 1961 against the petitioner which resulted in filing of complaint case before the court of Special Judge (Economic offences), Dhanbad and thus being an official complaint after finding sufficient material to proceed with the case, the petitioner was summoned to face trial. 9. Pursuant to the summons, the petitioner appeared before the learned trial court and subsequent thereto, the witnesses were produced on behalf of the complainant and were examined in terms of the provisions contained in Section 244 of Cr.P.C.. Thereafter, on conclusion of before charge evidences, charge under Section 277 of the Income Tax Act was framed against the petitioner on 29.07.2011 which was read over and explained to him in Hindi to which he pleaded not guilty and claimed to be tried. 10. In course of trial, the Complainant examined altogether two witnesses in support of its case. PW-1 is Balram Kumar Mandal who was posted as Steno at Dhanbad in the Income Tax Department and he has exhibited the sanction order as Exhibit-1 and the signature of the Commissioner of Income Tax, Dhanbad on the sanction order as Exhibit-2. PW-2 is Vijay Bhaskar who is the Complainant. The Complainant exhibited the Return for the assessment year 2003-04 filed by the petitioner on 28.07.2003 as Exhibit-3, Computation of Income as Exhibit-4, T.D.S. as Exhibit-5, Certificate of ECS as Exhibit-6, Letter dated 10.06.2004 to Bank of India as Exhibit-7, Reply dated 11.06.2012 of Bank of India stating that the petitioner had no housing loan account as Exhibit-8, Reply of Baramuri OCP as Exhibit-10, certified copy of Form No.16 as Exhibit-10/1, Letter 4 No.354 of the Complainant to Commissioner of Income tax as Exhibit-11, Complaint Petition as Exhibit-12, I.T. Return for assessment year 2003-04 as Exhibit-13, Computation of Income as Exhibit-13/1, Form No.16 TDS as Exhibit-13/2, letter by ECL regarding deduction of tax, Show cause notice to the petitioner as Exhibit-15, the petitioner's letter (exhibit-15/1), Photocopy of PAN as Mark-X, Photocopy of statement showing housing loan as Mark- X/1, Photocopy of Passbook of Bank of India as Mark-X/4 and some other documents to prove its case. 11. After closure of prosecution evidence, the statements of petitioner were recorded under Section 313 of CrPC on 12.05.2015 wherein he denied the incriminating evidences put to him and claimed to be innocent. The petitioner did not examine any witness, but he filed certified copy of C.O. Case No.26/2004 which has been marked as Exhibit-A and certified copy of C.O. Case No.27/2004 which has been marked as Exhibit-B in his defence. 12. The learned trial court considered the entire materials on record vide Paragraph-9 of the trial Court judgment and recorded its finding at Paragraph-12 which reads as under: “12. --------------------------------------------------------------- A critical appraisal of the aforesaid provision makes it clear that in order to attribute criminal liability under this section, prosecution is mandatorily required to establish that accused person either knowingly or at least having reason to believe that statement made in verification is false, has furnished it, with an intention to evade any tax payable. Therefore, germane of the offence lies in wilful furnishing of false facts in verification. If the evidences available on record (oral and documentary) are critically examined in the light of ingredients mentioned here in above, then it is quite evident that the witnesses examined on behalf of the prosecution are consistent on the point that accused person had filed a return relating to the financial year 2002- 03 and thereby claimed refund of ₹ 35,875/= on the basis of T.D.S., purported to be issued by the ECL, Baramuri OCP and repayment of interest of housing loan etc, but during course of inquiry, these documents were not found genuine. The fact is crystal clear from the comparative study of Exhibits 7&8, 10&10/1, 11&12 and Ext 13 series as well as Ext 15/1 wherein he has given his explanation to the Complainant admitting his guilt and that Satyaban Roy has forged Papers in his return. Ext 13 as stated earlier is the I.T. 5 Return and the Ext 13/2 is the TDS Certificate and Ext 13/3 is the letter regarding deduction of tax produced by the accused which all have been found forged and containing wrong facts during inquiry by the department as is apparent from the other Exhibits being discussed here, and whereas Ext 8 is the letter of Bank of India, Chirkunda denying that the accused had any housing loan account with the said bank and Ext 10 is the letter of the Senior Accounts Officer, Baramuri OCP stating that no refund of tax was due to the accused. This factum further stands proved with the oral testimony of P.W.2 Vijay Bhasker. Again, this fact further conclusively corroborates with Ext-10 and 10/1 the verification report regarding the TDS certificate issued by Sr. Accounts Officer Baramuri OCP ECL, Mugma Area Chirkunda. It was vehemently argued by the defence that it was wrong on the part of the Income Tax Department to allege that the accused has intentionally filed a wrong return vide Ext-13. It is apparent from Ext-10 and 10/1 which is the verification report regarding the TDS certificate that the claim for refund based on excess deduction of tax at source was wrong and thus the claim for refund were wrong. The court while examining the accused has put a specific question regarding his PAN NO ACVPG4382Q which he has admitted being his PAN. The accused person has nowhere specifically denied his signature over the Return of Income Tax and the documents attached with return except his stand taken during the trial, however it has been submitted during course of argument that under good faith, he has put his signature over unfilled form of Return. If plea taken by the accused person is examined in the light of evidence available on record, it becomes crystal clear that the accused person having knowledge of the fact that the said document can be misused put his signature and thus agreed to bear the risk, because the law does not permit such type of lame excuses and thus same cannot be considered. Therefore, under the circumstances the court is of the opinion that prosecution has been able to establish the factum of furnishing false particulars by the accused person in verification portion of return, by cogent, credible and consistent evidence. In order to rebut the evidence available on record, the accused person has although adduced no witness, but has categorically pleaded that he being ignorant with provisions of Income Tax Act has put his signature under bonafide belief, on blank papers which were later on misused. Having due regard to the plea taken by the accused person, the court is of the opinion that when a person signs a document, there is a presumption, under Section 114 of Indian Evidence Act, that he has read the document properly and understood it and only then affixed signatures thereon, unless there is proof of force or fraud, which must have been proved by cogent evidence, 6 otherwise no signature on a document can ever be accepted. This view of the court finds support from the ratio laid down by Hon'ble Apex Court in case of Grasim Industries Limited. VS. Agarwal Steel, reported in JLJR 2010 (1) (SC) 192. At this juncture, learned counsel for the accused has submitted that the lapses, if any, on the part of the accused are merely technical in nature, without having any element of mens rea, and moreover aimed to avoid tax liability, which is certainly not penal, hence no criminal liability can be attributed against the accused person." 13. This Court finds that the learned trial court considered every argument of the petitioner and rejected all of them and passed a detailed order convicting the petitioner and held that the petitioner had consciously furnished wrong statement knowingly or at least having reason to believe it to be false and committed the offence under section 277 of Income Tax Act, 1961. The provision of Section 278-E was also taken into consideration by the learned trial court. 14. The appellate Court also considered the materials on record and while upholding the conviction of the petitioner recorded its findings in Paragraph-19 and 21 which reads as under: "19. ………………… Exhibit-13 (Income Tax Return) filed by the accused for the assessment year 2003-04 (Financial year 2002-03), Exhibit-13/1, 13/2 (Computation of income and Form No.16 issued by ECL) shows that accused/appellant Nemai Chandra Ghosh filed the return and on the basis of Exhibit-13/1 & 13/2, claimed refund of Rs.35,875/-. Exhibit-14 series proves that bank as well as ECL have communicated that the claim advanced by accused was fake as neither any Housing Loan was sanctioned by the bank to him, nor any amount of tax was due to him. Thereafter, show cause notice (Exhibit-15) was issued to accused/appellant and same was replied by him (Exhibit-15/1) in which, he admitted that he was an illiterate and uneducated person and his signed documents were filed by an employee Sri Satyawan Rai meaning thereby the signature on verification on the Income Tax Return has not been denied by the accused/appellant. This evidence corroborated the case of prosecution and it did not disturb the core of prosecution case. Therefore, I do not find any substance on the argument advanced by the learned counsel for accused/appellant. 21. The oral and documentary evidence adduced on behalf of complainant clearly proved that the accused furnished his return supported with fake and fabricated paper and the appellant/ accused had knowingly verified on his return based on a false claim and he did not adduce any evidence to absolve 7 him from the liability fastened U/s 278(E) of the Income Tax Act read with 106 of the Indian Evidence Act. Therefore, due to non-discharge of onus by the accused and prosecution being able to prove the charge U/s 277 of Income Tax Act levelled against accused /appellant beyond all reasonable doubts, this Court finds that the learned court below has rightly held him guilty under aforesaid section. I have also gone through the sentence awarded by the learned court below and I find that same is proportionate to the offence committed as this type of offences are required to be severely dealt so that it could not disturb the economic condition of the country. Thus, I do not find any merit in this appeal accordingly this appeal is hereby dismissed. The appellant is on bail. His bail bond is cancelled and he is directed to surrender before the court below for serving out the sentence, failing which, the court below shall take appropriate steps for securing the presence of the appellant." 15. After hearing the learned counsel for the opposite party- Income Tax Department and upon going through the records, this Court finds that the petitioner being an employee of E.C.L., Baramuri OCP, Mugma Area, Chirkunda, Distt. Dhanbad filed his Income Tax Return on 28.07.2003 for the Assessment Year 2003-04 (Financial Year 2002-03) by putting his signature on the verification portion of the return alongwith TDS certificate and other documents and claimed a refund of Rs.35,875/- on the basis of TDS certificate in Form No.16 purportedly issued on 20.05.2003 by the Senior Accounts Officer, Baramuri OCP, ECL, Mugma Area, Chirkunda and also on the basis of loss from house property on account of interest paid on housing loan amounting to Rs.28,420/-. The claim of refund was made as excess deduction of tax at source. 16. On verification and enquiry from the concerned office as well as the concerned bank, it was found that neither TDS certificate as submitted by the petitioner alongwith the return was issued by the said office, nor the housing loan was granted to the petitioner by the said bank and thus, the claim of the petitioner was based on fake and false documents and thus, no refund was granted. Show cause notice Exhibit-15 was issued to the petitioner on 24.11.2003. The petitioner filed letter (Exhibit-15/1) shifting his burden on one Satyaban Roy, an Office Assistant of Baramuri OCP, ECL, Mugma Area, Chirkunda. 8 Being dissatisfied with the letter sent by the petitioner, sanction for prosecution of the petitioner was obtained from the Commissioner of Income Tax, Dhanbad vide Exhibit-1 and thereafter, the prosecution was launched under section 277 of Income Tax Act, 1961 against the petitioner. 17. This Court finds that vide Exhibit 15/1 i.e. letter of the petitioner, the petitioner had taken a specific stand that one Satyaban Roy also an employee of Mugma Open Cast Area who deals with affairs of accounts had taken his signatures and signatures of his wife namely, Sulochana Devi on several income tax forms and also on blank papers and he claimed himself to be illiterate and uneducated, although he had duly signed in English on the said document. The show cause notice (Exhibit-15) and letter (Exhibit-15/1) filed by the petitioner have been marked exhibits without any objection from the side of the petitioner. 18. This Court further finds that Exhibit-13 is the Saral Form (Income Tax Return for the Assessment Year 2003-04) filed by the petitioner which has also been marked exhibit without any objection from the side of the petitioner and it carries the signature of the petitioner. Exhibit-13/1 is the computation of income of the petitioner, Exhibit-13/2 is the TDS Certificate filed by the petitioner and Exhibit- 13/3 is the letter regarding deduction of tax produced by the petitioner and all have been found to be forged and containing wrong facts during inquiry by the Income Tax Department. Exhibit-10 and Exhibit-10/1 are the verification report regarding the TDS that the claim for refund based on excess deduction of tax at source was wrong and the claim for refund were wrong. 19. This Court further finds that there is no challenge from the side of the petitioner to the findings of the learned courts that the refund claim was based on forged documents relating to TDS Certificate and claim of benefit relating to payment of interest on housing loan. The case of the petitioner was throughout based on passing the responsibility to Satyaban Roy as stated in his letter that Satyaban Roy has forged Papers in his return. Accordingly, the prosecution has 9 proved the essential facts to hold the petitioner guilty for committing the offence under Section 277 of the Income Tax Act. 20. So far as mens rea i.e. ‘culpable mental state’ is concerned, both the learned courts have dealt with Section 278E of the Income Tax Act to convict the petitioner. 21. Section 278E of the Income Tax Act is quoted as under: - “278E. Presumption as to culpable mental state— (1) In any prosecution for any offence under this Act which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state, but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution. Explanation. —In this sub-section, “culpable mental state” includes intention, motive or knowledge of a fact or belief in, or reason to believe, a fact. (2) For the purposes of this section, a fact is said to be proved only when the court believes it to exist beyond reasonable doubt and not merely when is established by a its existence preponderance of probability.” 22. The aforesaid Section 278E of the Income Tax Act clearly provides that in any prosecution under the Income Tax Act, which requires a ‘culpable mental state’ on the part of the accused, the court shall presume the existence of such ‘culpable mental state’, but it shall be a defence for the accused to prove the fact that the accused had no such ‘culpable mental state’ with respect to the act charged as an offence in that prosecution. The explanation provides that “culpable mental state” includes intention, motive or knowledge of a fact or belief in, or reason to believe, a fact. Sub-section (2) provides the way and the extent to which the fact is to be proved by the accused for the purposes of rebuttal of the presumption under Section 278E. It provides that a fact for the purposes of Section 278E is said to be proved only when the court believes it to exist beyond reasonable doubt and not when its existence is merely established by ‘preponderance of probability’. Meaning thereby, if the accused has to prove a fact to dislodge the presumption under Section 278E of the Income Tax Act, the accused has to prove 10 the fact in such a manner that the court believes it to exist beyond reasonable doubt and such a presumption of culpable mental state cannot be dislodged by mere ‘preponderance of probability’. 23. This Court finds that in the present case, the foundational facts to convict the petitioner have been duly proved by the prosecution. The learned courts have rightly relied upon the legal presumption of ‘culpable mental state’ on the part of the petitioner in terms of Section 278E of the Income Tax Act. Nothing credible has been brought on record by the petitioner to dislodge the presumption of ‘culpable mental state’. The petitioner was required to prove his case beyond all reasonable doubts and not on the touchstone of ‘preponderance of probabilities’, which the petitioner has failed to do. 24. This Court is of the considered view that both the learned courts have duly considered the materials and attending facts on record and also the provisions of law and have recorded concurrent findings while convicting the petitioner for the offence under Section 277 of the Income Tax Act, 1961. There is no perversity, illegality or material irregularity in the impugned judgments and therefore, there is no scope for reappreciation of materials and coming to a different finding under revisional jurisdiction. Accordingly, the impugned judgements of conviction and sentence do not call for any interference. 25. So far as the compoundable nature of the offence as raised under the grounds in the criminal revision petition is concerned, the learned counsel for the Income Tax Department has no instruction in the matter and the petitioner is also not present before this Court to pursue the matter. 26. Considering the totality of the facts and circumstance of the case, this Court finds no merit in this criminal revision petition, which is hereby dismissed. 27. Bail bond furnished by the petitioner is cancelled. 28. 29. After dictation of the judgment in the open Court, Mr. Sanjay Pending interlocutory application, if any, is closed. Prasad, Advocate-on-record for the petitioner came to the chamber of 11 this Court along with the learned counsel for the Income Tax Department and has submitted that it may be recorded that he is not in contact with the petitioner and has no instructions in the matter. The learned counsel for the Income Tax Department has no objection to aforesaid recording in this judgement. Hence, recorded as such. 30. Let a copy of this Judgment be communicated to the court concerned through FAX/e-mail. Pankaj (Anubha Rawat Choudhary, J.) 12