Crlatr/21/2018 Of B. Radha v. Dy Commissioner Of Income-Tax

IN THE HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD FRIDAY, THE SEVENTEENTH DAY OF JUNE ! TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE DR. JUSTICE D.NAGARJUN qRIMINAL APPEAL (fR) NOS: 41 AND 21 OF 2018 CRL.A.(TR) NO.21 0F 2018: Criminal Appeal under Section 374 of Cr.P.C against the Judgment dated0910112014 in CC No. 12B of 2011 on the file of the Court of the Special Judge for Economic Offences at Hyderabad. Between: '1 . Smt B.Radha, W/o.Shri B.Rama Raju, Director of M/s. Wardha GreenfieldsPvt. Ltd., Rl/o. 1326, Road No.66, Jubilee Hills, Hyderabad.. Smt B.Radha, W/o.Shri B.Rama Raju, Director of M/s. Wardha GreenfieldsPvt. Ltd., Rl/o. 1326, Road No.66, Jubilee Hills, Hyderabad. 2. Shri D.Gopalakrishnam Raju, Sio.Satyanarayana Raju, Director ofM/s.Wardha Greenfields Pvt. Ltd., H.No.H-17, Tulasi Apartments, MadhuraNagar, Hyderabad-38.M/s.Wardha Greenfields Pvt. Ltd., H.No.H-17, Tulasi Apartments, MadhuraNagar, Hyderabad-38. ...APPELLANTS/ ACCUSED 2 & 4 AND Dy Commissioner of lncome-Tax, Central Circle-9, Room No.813, 8th Floor, AayakarBhava, Basheerbagh, Hyderabad-500004. ...RESPONDENT/ COMPLAINANT For the Petitioners : SRI VINOD KUMAR DESHPANDE, SENIOR COUNSEL FORSRI V.SURENDER RAO For the Respondent : SRI B.NARASIMHA SHARMA, SC FOR I.T. CRL.A.(TR) NO.41 OF 2Ql8: Criminal Appeal under Section 37 4(2) ot Cr.P.C against the Judgment datedOglO1t2Ol4 inCCNo.l2B of 2011 onthefileof theCourtof theSpecial Judgefor Economic Offences at Hyderabad. Between: "l . Hyderabad, M/s Wardha rep. Greenfields by its Pvt. Ltd., Managing 2-13131 Director, , S.S.Nagar, Shri A.V.Raghava Opp: Hyder Ngar,Raju,S/o.A.V.Rama RajuS/o.A.V.Rama Raju 2. Shri A.V.Rar hava Raju, S/o.A.V.Rama Raju, Direrlor of M/s. WardhaGreenfields Hyderabad-7 l!,t. Ltd., 2-13131 , S.S.Nagar, Opp: Hyder Nagar, Kukatpally,....Appellants/ Accused 1 & 3And Dy Commissioner o1 lncome-Tax, Central Circle-9, Room No B1:3, 8th Floor, AayakarBhava, Basheerbag, Hyderabad-500004. ...RESPONDENT/ COMPLAINANT For the Petitioners : SRI VINOD KUMAR DESHPANDE, SEhll()R COUNSEL FORSRI G.ASHOK REDDY For the Responder t : SRI B.NARASIMHA SHARMA, SC FOR l.T. The Court deliverec :he following: COMMON JUDGMENT THE HON'BLE DR. JUSTICE D.NAGARJUNCRIMINAL APPEAL [(TR]Nos.4L and 21 of 2Ol8COMMON JUDGMENT: Crl.A.(TR).No.41 of 2018 is filed by Al and A3 i.e.,Company and one of its Directors respectively, whereasCrl.A.(TR).No.2L of 2018 is filed by A2 and A'4, who are theDirectors of A1/company, being aggrieved by the conviction andsentence imposed by the learned Special Judge for EconomicOffences at Hyderabad in C.C.No.l28 of 2011 vide Judgmentdated 09.O1.2014, wherein Accused Nos. I to 4 were found guiltyof the offences punishable under Section 276-C(21 read withSection 278-B of the Income Tax Act, 1961 (for short, "the Act")consequently accused No.1 was sentenced to pay Iine ofRs.1O,O00/- and in default of payment of fine to initiateappropriate proceedingsAS required under Section 427 ofCr.P.C., whereas Accused Nos.3 and 4 were sentenced toundergo rigorous imprisonment for a period of one [year ]each and,{2 was sentenced to undergo rigorous imprisonment for a periodof six months and also to pay fine of Rs.iO,OO0/- each and indefault of payment of line by accused Nos.2 to 4, to undergosimple imprisonment for a period of one month each. Since tl ,e issues involved in these appeals are one and thesame, both I [-re ]appeals are being disposed ol" bv this commonjudgment. 2. For con zenience, con zenience, zenience, the parties herein are relerred to as theyparties herein are relerred to as theyrelerred to as theyas theytheyare arrayed before the tria-l Court. i.e., Ap;or:llant No.1 asAccused No. /Company and Appellant Nos.12 to 4 as AccusedNos. 2 to 4. Since tl ,e issues involved in these appeals are one and thesame, both I [-re ]appeals are being disposed ol" bv this commonjudgment. 2. For con zenience, con zenience, zenience, the parties herein are relerred to as theyparties herein are relerred to as theyrelerred to as theyas theytheyare arrayed before the tria-l Court. i.e., Ap;or:llant No.1 asAccused No. /Company and Appellant Nos.12 to 4 as AccusedNos. 2 to 4. For con zenience, con zenience, zenience, the parties herein are relerred to as theyparties herein are relerred to as theyrelerred to as theyas theythey 3. The gerr esis of these cases, which leacl the appellants-accused to pr :fer these appeals, are narrated in ltrief as under: i) Ac)used No.l/Company - M/s.Wardha GreenfieldsPrivate Limited, which was registered unde.: l-he CompaniesAct wit r the Registrar of Companies :it HyderabadASPrivate ,imited Company, \^ras engaged in the business ofacquisit cn ald sale of lands. Appellant Nos'. 2 to 4 hereinare the I )irectors of Accused No. 1/Compall,. ii) Ac,used No.l/Company has acquir(xl lands to an extent o Ac.7.0B guntas in Sy.No. 197 uncler tl-re limits ofBachupr lly Mandal, Ranga Reddy Distrir:t rluring thefinanci:rl year 2002-2003 and developed the sard lands by / incurring some arnounts during the financial years 2002-03 to 2007-08. Accused No.1/Company along r,r,ith othercompanies, who have lands contiguous to the lands ofAccused No.1/Company, have agreed to develop the landsjointly with M/s. Mytas Property Private Limited. As perthe said development agreement, the built up a-rea agreedto be given to Accused No.1/company, was allowed to besold to various buyers by M/s. Mytas Property PrivateLimited and pass on the sale proceeds to AccusedNo.1/Company. iii) For the assessment year 2008-09, accusedNo.1/company has filed income tax returns on 30.09.2008under Ex.Pl by bifurcating the sale proceeds into long termcapital gains accrued from the sale proceeds of the landsand short term capital gains accrued from the saleproceeds ol the constructed area by showing gross taxableincome as Rs.7,74,39,596 /-, out of which an amount ofRs.4,92,42,840/- was shown as long term capital gain andRs.2,81,96,756/- was shown as short term capital gains. iy) Ar :used No.1/Company1Sexpected to pay theincomc ,a-x either by u,ay of advance '-ax al; required underSection 2O8 of the Act or at least along with filing ofreturns in terms of Section 140-A of ihe Act. As perSection 143 (1) of the Act, the tax liabilrtv o: Accused No.1was arrived at Rs.2,30,34,548,/- by theresponc:nt/complainant and raised a clemand underSection 156 read with Section 143 of the Act and issued anintimatr rn to Accused No. 1/Company under Ex.P2.Accuser No. 1/companywasrequired i.o pay the taxdemanc ed within 30 days of service of not.ice, but it hascommit ed default. v) Ri spondent/complainant has isstted show-causenotice [( ]ated 17.1 1.2009 under Section 2:2 I (1) of the Actunder I )x.P5, wherein the appellants u,er3 asked to [,show]cause 1s to why penalty should no1. be levied forcommil. ing default in payment of tax. As. there was norespon{ e from the appellants, the complainant has issuedanothcr show-cause notice dated 25.08.2()10 under Ex.P6under i [,ection ]221 (11 read u,ith Section . 43-A of the Act. v) Ri spondent/complainant has isstted show-causenotice [( ]ated 17.1 1.2009 under Section 2:2 I (1) of the Actunder I )x.P5, wherein the appellants u,er3 asked to [,show]cause 1s to why penalty should no1. be levied forcommil. ing default in payment of tax. As. there was norespon{ e from the appellants, the complainant has issuedanothcr show-cause notice dated 25.08.2()10 under Ex.P6under i [,ection ]221 (11 read u,ith Section . 43-A of the Act. Finally, one more opportunity was also given by theDepartment by giving another show-cause notice dated12.lO.2OlO (Ex.P7) under Section 221 (ll read with Section143-4' of the Act. An opportunity of being heard was alsogiven by the respondent/complainant to AccusedNo.1/Company fixing the date of hearing as 18.10.2010,but there was no response, on which a penalty ofRs.50,00,000/-wasimposed by way of order dated25.10.2010 (Ex. P8) under Section 221 read with Section140-A(3) of the Act and the said proceedings were servedon accused No.1 on 29.lO.2OlO.Department by giving another show-cause notice dated12.lO.2OlO (Ex.P7) under Section 221 (ll read with Section143-4' of the Act. An opportunity of being heard was alsogiven by the respondent/complainant to AccusedNo.1/Company fixing the date of hearing as 18.10.2010,but there was no response, on which a penalty ofRs.50,00,000/-wasimposed by way of order dated25.10.2010 (Ex. P8) under Section 221 read with Section140-A(3) of the Act and the said proceedings were servedon accused No.1 on 29.lO.2OlO. 4. evaslon of payment of payment payment of tax, thetax, thethe 4. Considering the willfulevaslon of payment of payment payment of tax, thetax, thetherespondent/complainant has decided to initiate prosecution andaccordingly a notice was issued to accused No.1/company andother Directors under Section 276-C(21 of the Act, as to. whyprosecution shall not be initiated against them for willful evasionof the tax. A11 of them have given reply stating that there was nointention to evade payment of tax. Another notice was issued toaccused No.1/Company and its directors under Exs.PlO andPl 1 dated 11.01.2011 asking them as to why prosecution s,hall not be initiat rd under Section 276-C(21 of the .Act. Again replieswere filed bl accused No.1/company and its Directors/ accusedNos.2 to 4 t nder Exs.P12 and P13 stating that there was nointention of r, illful evasion of tax. 5. As Acc rsed No. 1/Company and its D irectors/ accusedNos.2 to 4 bwe not paid the tax in response 1o the demandnotice issued under Section 1a3 (1) of the Act and a-lso failed topay the per-r ilty, the respondent/complarnart rrfter obtainingsanction ordr r dated 16.03.2011 for launching of prosecutionfiled a compli int before the Special Court for Economic Offencesagainst accu;ed No.1 and accused Nos.2 to 4, the otherDirectors, a1lt ging that they have committed offi:nce punishableunder Sectior 276-C(2\ read with Section 278-13 of the Act, asthey have r,r'i lfully evaded tax even though th e_v were havingsufficient resc Jrces. 6. The Spr: :ial Court for Economic Offettces l6rok cognizanceof the offencer against Accused No. 1/Company end its Directorsi.e., Accused Nos. 1to 4, under Section 27b--(;(2\ read withSectiorr 278-El of the Act and charges were franrt:cl against themunder Section 276 - C(2) read u,ith Section 27A-f\(ll of the Act and all the accused have pleaded not guilty of the charges andclaimed to be tried. 7. In order to prove the charges leveled against theappeliants, the respondent/complainant has examined PWs. 1 to3 and got marked Exs.Pl to P14. After closure of evidence of thecomplainant, the incriminating evidence elicited against theappellants was read over and explained to them under Section313 of the Cr.P.C., for which all of them have denied andreported that they did not choose to examine any witness ontheir behalf. However, they got marked Exs.Dl to D3 on theirbehalf. and all the accused have pleaded not guilty of the charges andclaimed to be tried. 7. In order to prove the charges leveled against theappeliants, the respondent/complainant has examined PWs. 1 to3 and got marked Exs.Pl to P14. After closure of evidence of thecomplainant, the incriminating evidence elicited against theappellants was read over and explained to them under Section313 of the Cr.P.C., for which all of them have denied andreported that they did not choose to examine any witness ontheir behalf. However, they got marked Exs.Dl to D3 on theirbehalf. 8. The substance of the evidence of PWl is that after receivingof returns of income tax filed by accused No. l/company, therespondent/complainant has processed the same under Section143(1) of the Act arrd issued intimation determining the totaltaxable income as Rs.7 ,74,39,600 /- and tax liabilitySRs.2,53,16,220/-. The evidence of PW2/lncome Tax ofhcer is tothe extent that he has considered the annual report of accusedNo.1/company for the financial year 2OOT -O8 under Ex.P3 andbank account statements of accused No. 1/Company with the AXIS Bank ,imited under Ex. P4 and lounl that accusedNo.l /Compa: v did not pay the tax returrls in spite of havingsurplus and ;ufficient funds. PW3 is thr: In<:or:ee Tax Officer,u,ho has suc :eeded PW2. His evidence is that. he has passedpenalt-y order under Ex.PB imposing penalty o1' Rs.50 lakhs andraised demar d under Ex. P9 and the sam e was served on theaccused. He also deposed that as there was no response fromthe accused. ;how cause notices under Seotion 276 C of the Actwere issued l gainst all the accused through wirich accused wereinformed tha the department is initiating crirninal proceedingsand conseqtri ntly the department has filed tht: crlnplaint. 9. After fu l-fledged trial, on considering the entire material onrecord, the f ial Court has found Accused No.1,/Company andA2 to A4, th: Directors of A1 company, guiltj,of the offencespunishable r. nder Sections 276-C(21 and 278-8 of the Act andwere sentenc :d as stated supra. Aggrieved by tlrr: said judgmentand convicti rn of Special Judge for Econorni<:al Offences atHyderabad, he present appeals are filed originally before theMetropolitan Sessions Judge Court at Hyderabal 10. The erstwhile High Court for the States of Teiangana andAndhra Pradesh has issued circuiar ROC.No.34, CriminalSection/2017, dated 28.08.2017, wherein it is clarihed thatagainst any orders passed by the Special Judge for EconomicOffences, Hyderabad, in the State of Telalgana andVisakhapatnam in the State of Andhra Pradesh, the High Courthas the jurisdiction to entertain the appeals, not the SessionsCourt. In view of the said circular, these appeals liled by theappellants have been transferred from Metropolitan SessionsJudge Court, Hyderabad, to the High Court for the State ofTelangana. 1 1. The summary of grounds of appeal as {iled by theappellants in brief are as under: accuseda) The trial Court has failed to see that No.l/company was not having funds to pay the tax on the duedate as reflected in Ex. P4-bank statements and that accusedNo.l has not received any sale proceeds from M/s. MytasProperty Private Limited, thereby the respondent/ complainanthas not produced any evidence to show that accused No.l/Compary has received sale proceeds from M/s. MytasProperty Prir, rte Limited b) The trj r1 court has misconstrued the prr:srumption underSection 278- I ol the Act and erred in holding th:rt the burden ofproof is on ti e accused to prove that there was n,r wi1lfu1 evasionofpal.mentc'tax. c) The tri rl Court erred in holding that the ar:cused failed toprove non-e) istence of culpable mental state 1r. non-payment oftaxes on the date of filing returns and as on th,: Cate of demandnotice and t1 at the trial Court failed to appreciate that in spite ofnot having irlv cogent evidence to show that ,:ill the accusedhave willfull, evaded the tax, the triai Cor-rt ha.s concluded thataccused hav, committed willful evasion in paymerrt of tax. No.l/Compary has received sale proceeds from M/s. MytasProperty Prir, rte Limited b) The trj r1 court has misconstrued the prr:srumption underSection 278- I ol the Act and erred in holding th:rt the burden ofproof is on ti e accused to prove that there was n,r wi1lfu1 evasionofpal.mentc'tax. c) The tri rl Court erred in holding that the ar:cused failed toprove non-e) istence of culpable mental state 1r. non-payment oftaxes on the date of filing returns and as on th,: Cate of demandnotice and t1 at the trial Court failed to appreciate that in spite ofnot having irlv cogent evidence to show that ,:ill the accusedhave willfull, evaded the tax, the triai Cor-rt ha.s concluded thataccused hav, committed willful evasion in paymerrt of tax. d) The tri rl court failed to see that all the assets belong toaccused No. / Company were attached under Section 281-8 ofthe Act alcl due to paralyzing of financial actjvities of accusedNo.1, tax cor ld not be paid in time. e) The trir l court lailed to consider the admir;sion of PW3 that the amount received by Accused No. 1/ Com oany is towards share appiication money does not attract tax liability and thatthe trial Court couid not consider that accused No.l has notreceived Rs.7 crores 70 lakhs from M/s. Mytas Property PrivateLim ite d . f) The Trial Court should not have concluded that accusedNos.2 to 4 are responsible for day to day affairs of accusedNo. 1 / company arrd should have taken into consideration thenotices issued under Section 278-8 of the Act proposing theprosecution did not refer accused Nos. 2 to 4 as principai officersand thereby accused Nos.2 to 4 shouid have been acquitted. L2. Heard Sri Vinod Kumar Deshpande, learned Senior counselfor the appellants and Sri B. Narasimha Sharma, learnedStanding counsel for the income tax depa-rtment, considered theentire material on record, relevant provisions of the Act and theauthorities cited. 13. Appellants have filed an application under Section 39 ICr.P.C., along with the appeals for receiving of two documentsi.e., (1) Common order passed by the Appellate Tribunal111ITA.No.1016 of 2014, dated 22.05.2015 and (2) consequential order, datecl 21.O3.2016 passed by the As;sr:ssing Officer, Assistant Cr mmissioner of lncome Tax, Centr-al Circle-3(2),Hyderabad, a; additional evidence. As per the [,:ommon ]order ofthe Tribunal, dated 22.O5.2015 (document No.1), the assessmentorder dated )2.12.2O1O on u,hich the prosecution is initiatedwas directed ,o be modified. Basing on the orders of the IncomeTax Appellatt Tribunal, the assessment officer has modified theearlier orders dated 02.12.2O1O by re-assessrng t.he tax liability,which the ar pellants were expected to pay lor lhe assessmentyear 2OO7 -2( O8 (document No.2). Consicleringl the above, andon hearing b, [,th ]sides, this Court is of the opinion that these twodocuments i..e very relevant to consider the appeals on hand,thereby thes< documents are received. 14. It is slr rmitted vehemently by the learne<l Senior Counselfor the appt: lants that during the pendency cl' th e complaintbefore the l. ['ial ]Court, the accused have paid errtire tax asdemanded, :rcluding the penalty and intere,st and that theappellantsravechallenged the assessment orders dated02.l2.2OIO r nder Ex.D2 before the learne:d Cfl(,{). On hearingboth sides, l arned CIT(A) has found that there zrre no merits in 14. It is slr rmitted vehemently by the learne<l Senior Counselfor the appt: lants that during the pendency cl' th e complaintbefore the l. ['ial ]Court, the accused have paid errtire tax asdemanded, :rcluding the penalty and intere,st and that theappellantsravechallenged the assessment orders dated02.l2.2OIO r nder Ex.D2 before the learne:d Cfl(,{). On hearingboth sides, l arned CIT(A) has found that there zrre no merits in the contentions raised by the appellants, and dismissed theappeal upholding the orders passed by the Assessing Officer forassessment year 2008-09. Aggrieved by the same, theappellants have preferred appeal before the Income Tax AppellateTribunal (in short, "the Tribuna-i"), and on hearing both sides,learned Tribunal has partly a-llowed the appeal vide orders dated22.05.2015 in ITA.No.943lHydl2ola and batch finding that theAssessing Officer has committed error in calculating the tax tobe paid by the appellants and directed the Assessing Officer tore-assess the tax by computing the income of the appellantsfrom the transfer of lands held by accused No. l/company ascapital assets by way of development agreement and subsequentto sale of flats and bungalows received as consideration for suchtransferred amounts to stock in trade on conversion. Theseorders are passed after passing conviction vide [judgment ]dated09.Ol.2Ol4 in C.C.No.128 of 201 1 by the iearned Special Judge.It is also submitted by the learned Senior counsel that theAssessing Officer has re-assessed the tax as per the directions ofthe Tribunal and passed consequential order, dated 21.O3.2016,wherein the tax liability was substantially reduced and foundthat the tax, which was already paid to the tune of Rs.2,30,34,5.,8/- was in excess of the rer,ised tax thereby, theexcess tax pa d Rs, 1,45,16,296 l- and interest o: Rs.52,61,382/-the total of .vhich was Rs. 1,97,77,678/-, rva:; orclered to berefunded anc the sarne was also adjusted agarnst the demandfor the accc lnting year 2009-10 vide RO.No,303523 dated28.03.20t6. On cor sidering the submissions oll the learned Seniorcounsel it is :[ear that the appellants have not r>nly paid the taxdemanded aJ ,ng with interest ald penalty, but e.lso on accountof re-assessn.ent of tax, the tax already paid rvar; in excess of taxliability, anc[ that the same was adjusted lor li.t,.rre tax liabilityald hence, sr ught for allo'*,ing of the appeals. 15. karner standing counsel representing the Income TaxDepartment rtated that as on the due date, the accused have notpaid the ta: having sulficient funds and c,rrnmitted willfulevasion of pr yment of tax. It is also submitted that AccusedNo.1 /compar v has filed annual returns (trx. Pi3), through itsChartered Ar' ;ountarlt for the financial year 2OO7 -O8 relevant forthe assessmr nt yea-r 2OO8-09, according to which Accused No.1made profit < r sale of land to a tune of Rs.7,35, 19,24O I - and the bank statements show that Accused No. 1/Company has receivedpart of sa-le consideration in respect ol "Mytas Hill County" fromtime to time, but did not choose to pay the advance tax. It isfurther submitted that the balance sheet of AccusedNo.1/Company a,lso shows Rs.9,44,4O,957/- under the headreserves and surplus, so also Rs.11,87,75,050/- under the headcurrent assets of loans and advances. It is furtherby way submitted that accused No.l/Compaly having enough liquidcash during the relevant accounting year, willfully evaded inpayment of tax, thereby the accused have committed the offencepunishable under Section 276-C(2) read with Section 278-B ofthe Act and hence conviction recorded by the trial Court isproper. 16. Now, the points for determination in these appeals are: 1) Whether the conviction recorded based onthe assessment order dated 02.12.2010 can besustained, since the said assessment order dated02.12.2O1O was subsequently revised?the assessment order dated 02.12.2010 can besustained, since the said assessment order dated02.12.2O1O was subsequently revised? 2l Whether the accused have committed willfulevasion of tax? 16. Now, the points for determination in these appeals are: 1) Whether the conviction recorded based onthe assessment order dated 02.12.2010 can besustained, since the said assessment order dated02.12.2O1O was subsequently revised?the assessment order dated 02.12.2010 can besustained, since the said assessment order dated02.12.2O1O was subsequently revised? 2l Whether the accused have committed willfulevasion of tax? appellants hi, ue committed any willful evasion of tax, as definedunder Sectior 276-C ol the Act 19. Therefo e, on considering the above discus,sion, it is clearthat the findi rg of the tria-l Court that the appellernts vvere guiltyof the offen<:r s under Section 276-C(21 read with Section 278-8of the Act :; erroneous as the same is baserl on incorrectassessment rrder, dated 02.12.2OlO anrd he:rce, shall notsustain, and ['equired ]to be set aside. Considr ring the same, point No. I is decided in favour ofthe appellant ;/accused. POINT No.2.r 20. The apuellants have also raised other issues i.e., they havenot committ-t d any willful evasion in payment ol tax since, as onthe due datt there were no liquid funds in th,:ir accounts andthe appellan s - Accused Nos. 2 to 4, who are the Directors, arenot respons ble for the day to day act,ivities of accusedNo. 1/Compa 1y as on the date of the alleged default, the trialCourt has m sconstrued the presumption unde:: Section 27BE ofthe Act, the -rial Court failed to record admission of PW.3, that the amount received towards share application does not attractthe tax etc. 2l . This Court has already came to the conclusion whilediscussing point No.1 that the conviction and sentence recordedin favour of the appellants required to be set aside, on account ofthe fact that the assessment order dated O2.l2.2OlO on whichthe conviction was recorded was modified and a freshassessment order came into iorce, hence, the issues raised bythe appellants, need not be answered. 22. Learned Senior Counsel for the appellants has [placed]reliance on the authority passed by the Hon'ble Supreme Courtin the case of V.Srinivas Reddy Vs. State of Andhra Pradeshl,wherein it was held as follows: *13. It utas then urged bp Mr. Arunachalam that ifthe High Court .felt that further euidence wos necessoq.,l.for [disposal ][of ][the ][case ][then ][it ][could ][haue ][exercised its]the High Court .felt that further euidence wos necessoq.,l.for [disposal ][of ][the ][case ][then ][it ][could ][haue ][exercised its]pouter under Section 391 Cr. P.C. and ouqht not to haueset aside the order of acquittal and remctnded the matterfor fresh [disposol. ][Thb ][arqument ][also ][did ][not impress ][us]because ttrc High Court instead of recordina the additionoleuidence in terms of Section 391 Cr. P.C.; preferred toremond tlrc matter back to the trial court for disposal inset aside the order of acquittal and remctnded the matterfor fresh [disposol. ][Thb ][arqument ][also ][did ][not impress ][us]because ttrc High Court instead of recordina the additionoleuidence in terms of Section 391 Cr. P.C.; preferred toremond tlrc matter back to the trial court for disposal inaccordance with latu. It also appears from the record thatsome of the doanments includinq FDRs, loan applicationsetc., should also haue been brought on record for effectiuesome of the doanments includinq FDRs, loan applicationsetc., should also haue been brought on record for effectiue disposa of the controuersu raised in the case and to dojustice ,,?tueen the parties. It is needless 1s 5:er,l tltat thetial co Lrt utill stictlu adhere to the obsert'otions anddirectio [,.s ]giuen by the High Court in its [jt-rd17m,znt,"] The ra,ionale in the above authority of lhe Apex Courtsquarelv aptr licable to the facts of the case on h,and. disposa of the controuersu raised in the case and to dojustice ,,?tueen the parties. It is needless 1s 5:er,l tltat thetial co Lrt utill stictlu adhere to the obsert'otions anddirectio [,.s ]giuen by the High Court in its [jt-rd17m,znt,"] The ra,ionale in the above authority of lhe Apex Courtsquarelv aptr licable to the facts of the case on h,and. 23. Consic ::ring the facts and circumstances, this Court is ofthe conside :d opinion that as the assessrnent orders dated02.12.201,0 on which the prosecution was in itiated itself doesnot exist ar:r : that the same was modified al<l fresh assessmentorder datec 21.03.2016 came into force, the conviction andsentence rer ,rrded against the appellants basing on the incorrectassessment orders dated 02.12.2010 shal1 be s:l aside. 24. Accor< ingly, both these criminal appeals are disposed ofsetting asi< ,: the conviction and sentence lrtted 09.Ol.2Ol4recorded b1, Special Court for Economical Olfi:n<:es at Hyderabadand C.C.No 128 of 2Ol1 is remanded back to ta,,: trial Court witha direction to consider the documents i.e., (1 ) Common orderpassed by 1he Appellate Tribunal in ITA.I'lo 1C 15 of 2014, dated22.05.2015 and (2) consequential orcier, l;,rted 21.03.2016passed b1, the Assessing Officer, Assistant tJommissioner of \ Income Tax, Central Circle-3(2), Hyderabad, filed by theappellants and decide the complaint alresh in accordance withlau', after giving an opportunity to both sides to adduce anyfurther evidence, if any. Hou,ever, the trial Court shall not beinfluenced by the comments and observations, if aly, made bythis Court touching merits of the case while [passing ]orders. As a sequel, pending miscellaneous applications, if any,shall stand closed. Sd/.K.SRINIVASA RAOJOINT REGISTRAR@r\."t----SECTION OFFICER //TRUE COPYII To1The Special Judge for Economic Offences at Hyderabad.2The Dy. Commissioner of lncome Tax, Central Circle -9, Room No.B13, 8thFloor, Aayakar Bhavan, Basheerbagh, Hyderabad-500004.3One CC to Sri V.Surender Rao, Advocate 4One CC to Sri B.Narasimha Sharma, SC for 1.T., IOPUCI5Two CD CopiesoOne Spare CopyKj\.P 4. HIGH COURT DATED:17l0612o2rt COMMON JUDGMII: [rVT]CRLA(TR).Nos.21 i r"rd 41 of 2O18 DISPOSING OF Tt :: BOTH TR.CRL.As. _,/-::-..:--:-:-._,/,a''..,, [J;;\i l: ][, ][,.1],1//,//, ,'::r.'iltli,r' [il]II [il]*.4"ile