The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK CRA NO.32 of 1996 (In the matter of application under Sections 378/382 of the Criminal Procedure Code, 1973.). Income-Tax Officer (Union of India), Jeypore …. Appellant -versus- Nagendranath Khuntia …. Respondent For Appellant : Mr. S.S. Mohapatra, Advocate For Respondent : Mr. J.M. Pattnaik, Advocate CORAM: JUSTICE G. SATAPATHY DATE OF HEARING :19.04.2023 DATE OF JUDGMENT:25.04.2023 G. Satapathy, J. 1. This is an appeal against acquittal of the respondent-accused by an order of learned Additional Chief Judicial Magistrate (Special), Cuttack dated CRA No.32 of 1996 Page 1 of 13 28.04.1994 passed in 2(c).C.C. No.116 of 1992 (Trial No.119 of 1992). 2. Prosecution case in brief is on verification of the return filed by the respondent-accused, who was the Development Officer, LIC, Koraput, during the assessment year 1990-91, the Income Tax Officer (ITO) doubted the gross income of the accused and, accordingly, issued notice to the respondent-accused, who appeared and furnished his details of account with xerox copy of savings bank passbook showing deposit of money. While computing income for the year under the reference, the Assessing Officer (ITO) noticed that respondent-accused had shown Rs.1,00,000/- (Rupees One Lakh) as his receipt for additional conveyance allowance, but he claimed Rs.70,013/- (Rupees Seventy Thousand and thirteen) towards his expenses U/S.10(14) of the Income Tax Act (in short the IT Act) and added the balance CRA No.32 of 1996 Page 2 of 13 amount of Rs.29,987/- (Rupees Twenty-nine Thousand and Nine Hundred Eighty-seven) to his total income, but the respondent-accused had omitted to mention the receipt of advance against incentive bonus of Rs.24,491/- (Rupees Twenty-four Thousand and Four Hundred Ninety-one) for the financial year 1988-89. It is also claimed by the ITO that although accused had received conveyance allowance of Rs.80,000/- (Rupees Eighty Thousand), but he had improperly shown it as Rs.1,00,000/- (Rupees One Lakh) to evade tax liability by getting benefit U/S.10(14) of the Act. The respondent- accused had also explained about receipt of Rs.20,418/- (Rupees Twenty Thousand and Four Hundred Eighteen) deposited in his SB account as an advance from LIC, but the Branch Manager, LIC, Koraput, on being asked, answered the details of payment made by the respondent-accused including this amount of Rs.20,418/- (Rupees Twenty CRA No.32 of 1996 Page 3 of 13 Thousand and Four Hundred Eighteen) in March, 1990 as incentive bonus. It is also alleged that the respondent-accused did not furnish the receipt of incentive bonus of Rs.24,691/- (Rupees Twenty-four Thousand and Six Hundred Ninety-one) in his return and, therefore, the assessment order was passed on 31.01.1991 showing the total income of the accused at Rs.1,16,112/- (Rupees One Lakh Sixteen Thousand and One Hundred Twelve) and, accordingly, tax was assessed on such amount, but the respondent- accused filed an appeal, which was allowed for a relief to the tune of Rs.30,000/- (Rupees Thirty Thousand) as against his claim of Rs.70,000/- (Rupees Seventy Thousand) as an additional conveyance allowance and, accordingly, a penalty proceeding was initiated against the respondent-accused. On the above facts, the complaint was made against the respondent- accused for filing false return to defraud the Income Tax Department. Accordingly, the complaint case CRA No.32 of 1996 Page 4 of 13 came into existence and the respondent-accused was tried in such complaint, but the learned trial Court after appreciating evidence, found the accused not guilty of the offences U/S.276(C)/277 of IT Act and acquitted the respondent-accused by the impugned judgment. 3. The defence plea of the respondent-accused was that he did not tendered any false statement to the Income Tax Department and he filed the IT return by getting the contents verified by the Office of the Branch Manager, LIC, but the ITO hurriedly passed the assessment order without appreciating the material furnished by him. Being aggrieved by the order of acquittal of the respondent-accused, the IT Officer being authorized, has filed this appeal challenging the acquittal of the respondent-accused. 4. In the course of hearing of the appeal, learned counsel appearing for the appellant-Union of CRA No.32 of 1996 Page 5 of 13 India contends that the learned trial Court has fallen in error in appreciating the evidence on record and, thereby, had illegally recorded the finding in the complaint by acquitting the respondent-accused. On the other hand, learned counsel appearing for the respondent-accused has submitted
Legal Reasoning
that the learned trial Court has not in fact committed any illegality in acquitting the respondent-accused, rather the findings of the learned trial Court are on the basis of legal scrutiny of evidence and, therefore, there is no requirement of interference of the order of acquittal of the respondent-accused after 30 (thirty) years. 5. Admittedly, this is an appeal against acquittal, which was recorded by the learned trial Court way back in the year 1994 and law is well settled that in case of acquittal, the presumption of innocence of accused as provided under law, is CRA No.32 of 1996 Page 6 of 13 reinforced and unless there appears miscarriage of justice and compelling reasons, no judgment of acquittal can be interfered with after near about 29 years, more particularly in a case of this nature, where the offences with which the respondent- accused stood charged. In this case, the appellant was charged for offence U/S.276(C)/277 of the IT Act, but offence U/S.276(C) of IT Act can be established by way of evidence that such persons willfully attempted in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act. Similarly, offence U/S.277 of IT Act can be established by way of evidence that such persons made a statement in any verification under this Act or under any rule made there under or delivered an account of statement, which is false, and which he either knows or believes it to be false or does not believe it to be true. CRA No.32 of 1996 Page 7 of 13 6. While scrutinizing the impugned judgment, it appears that the learned trial Court has rightly framed the points of determination and proceeded to appreciate the evidence on record. On reappraisal of the evidence by this Court, it is now to be seen whether the findings of the learned trial Court are perverse or unsustainable in the eye of law. Now let us see whether the respondent-accused had furnished false return with intent to evade payment of tax. It is alleged against the respondent-accused that he had omitted to show the receipt of advance against incentive bonus for an amount of Rs.24,691/- (Rupees Twenty-four Thousand and Six Hundred Ninety-one) as well as he had shown inflated figure of Rs.1,00,000/- (Rupee One Lakh) as against Rs.30,000/- (Rupees Thirty Thousand) received towards additional conveyance allowance to get the benefit U/S.10(14) of IT Act, but in order to establish this allegation, the prosecution wholly relied upon the CRA No.32 of 1996 Page 8 of 13 confidential communication under Ext.2/13 received from the Branch Manager (BM), LIC, Koraput towards receipt of additional incentive bonus of Rs.24,691/- (Rupees Twenty-four Thousand and Six Hundred Ninety-one), which according to the prosecution amounts to willful concealment by the respondent- accused. This Court feels it proper to go back to the evidence of P.W.3, who is the Asst. Administrative Officer (AAO) of LIC, Koraput at the relevant time, who had admitted in the cross examination that Ext.2/13 was given confidentially without giving copy thereof to the respondent-accused and there Office had regretted for erroneous calculation of income of the respondent and, thereby, sent a letter under Ext.A to IT Officer, Jeypore Circle on 09.03.1992 and it is further admitted by P.W.3 that specifically, Rs.24,691.06/- as alleged had not been mentioned in Ext.2/4. P.W.3 had further admitted in cross examination that segregation of amount relatable to CRA No.32 of 1996 Page 9 of 13 the income and income tax of the respondent- accused could not be made ready by their department by the date of filing of return by the respondent-accused and, thereby, on 07.05.1991, the respondent-accused was granted with another certificate for his income after due appraisal and segregation for the year under reference. The above evidence of P.W.3 clearly discloses that the respondent-accused had not either willfully concealed any amount in his return or had not any intention/mens rea on his part. On the other hand, P.W.2, who had passed the assessment order on the return of the respondent-accused, had admitted in the cross examination that he received reply under Ext.2/13 on 30.01.1991 and passed the assessment order on 31.01.1991, which is just one day after receipt of the letter from LIC Office, Koraput. It is also admitted by P.W.2 that the respondent-accused had not been noticed to have his say in the matter CRA No.32 of 1996 Page 10 of 13 and the BM, LIC did not proved by showing any document of his Office that the respondent-accused had received Rs.1,00,000/- (Rupees One Lakh) towards his additional conveyance allowance at the time of his assessment and in the course of hearing of appeal, the appellate authority was pleased to deduct Rs.30,000/- (Rupees Thirty Thousand) from the additional conveyance allowance of the respondent-accused. It is also a fact that the respondent-accused was never given an opportunity to explain as to why complaint should not be filed against him and there appears from the record that a penalty proceeding was also pending at the time of institution of the complaint, which is contrary to law inasmuch as unless there is any finding in the penalty proceeding, the department should be slow to file complaint against the respondent-accused for the self same cause of action. CRA No.32 of 1996 Page 11 of 13 7. Besides, Section 271(1)(C) of IT Act refers to “concealment as deliberate act on the part of assessee, but a mere omission or negligence would not constitute a deliberate act of suppressio veri or suggestio falsi, which means a misrepresentation of truth by the omission or suppression of certain key facts and suggestion of an untruth”. In the course of trial, the respondent-accused had stoutly taken two pleas. One is that even for a moment, the evidence of prosecution is taken into consideration, yet he cannot be convicted for the offences with which he stood charged for want of sanction, which is defective and illegal. Second is the pendency of penalty proceeding U/S.271(1) against him is a bar for institution of the complaint. The learned trial Court after due analysis of provision and evidence, had concurred with the above pleas of the respondent-accused, but in the course of hearing of this appeal, the appellant could not validly dispute the said findings of the learned CRA No.32 of 1996 Page 12 of 13 trial Court and, it therefore, appears to this Court that the appellant has failed to satisfy this Court either on merit or on the ground of technicalities. 8. In view of the aforesaid discussion, this Court has no other option left, but to concur with the findings of the learned trial Court acquitting the respondent-accused. 9. In the result, the appeal merits no consideration and is accordingly dismissed on contest, but in the circumstance, there is no order as to costs. (G. Satapathy) Judge Orissa High Court, Cuttack, Dated the 25 th day of April, 2023/Subhasmita CRA No.32 of 1996 Page 13 of 13