Crlatr/6/2018 Of D.srinivasa Raju v. Dy. Commissioner Of Income-Tax

IN THE HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD FRIDAY, THE SEVENTEENTH DAY OF JUNETWO THOUSAND AND TWENTYTWO PRESENTTHE HONOURABLE DR. JUSTICE D.NAGARJUNCRIMINAL APPEAL [(TR) ]NOS: 6 AND 72 OF 2018 CRL.A.(TR} NO.6 OF 2018: Criminal Appeal under Section 37 4(2) ot Cr.P.C against the Judgment datedOgl01l2o14 in CC No.132 of 2011 on the file of the Court of the Special Judge forEconomic Offences at Hyderabad. Between: / Shri D.Srinivasa Raju, S/o.Shri D.Satyanarayana Raju, Director of M/s.UttarashadaBio-Tech Pvt. Ltd., R/o. H.No.H-75, Madhura Nagar, Hyderabad-38. ...APPELLANT/ ACCUSED NO.2 AND Dy. Commissioner of lncome-Tax, Central Circle-9, Room No.813, 8rh floor, AayakarBhavan, Basheerbagh, Hyderabad-500004. ...RESPONDENT/ COMPLAINANT FoT the PetitioneT : SRI VINOD KUMAR DESHPANDE, SENIOR COUNSEL FORSRI.V.SURENDER RAOSRI.V.SURENDER RAO For the Respondent : SRI B.NARASIMHA SHARMA, SC FOR l.T. CRL.A.0R) NO.72 0F 2018: Criminal Appeal under Section 374(2) ot Cr.P.C against the Judgment dated0910112014 in CC No.132 of 2011 on the file of the Court of the Special Judge forEconomic Offences at Hyderabad. Between: 1. M/s. Hyderabad-72, Uttarashada Bio-Tech Pvt. rep. by its Managing Ltd.,2-13131 Director , S.S.Nagar, Shri A.V.Raghava Opp: HyderNagar,Raju,S/o.A.V.Rama Raju, aged about 48 years2. Shri K.Gopalakrishnam Raju, S/o. Shri K.Rama Raju, aged about 51 years,Director of M/s. Uttarashada Bio-Tech Pvt. Ltd., H.No.8-3-222lB17l35,36lD-92& 93, Flat No.304, Sd Ramana Enclave, Madhura Nagar, S.R.Nagar, Post,Hyderabad.S/o.A.V.Rama Raju, aged about 48 years2. Shri K.Gopalakrishnam Raju, S/o. Shri K.Rama Raju, aged about 51 years,Director of M/s. Uttarashada Bio-Tech Pvt. Ltd., H.No.8-3-222lB17l35,36lD-92& 93, Flat No.304, Sd Ramana Enclave, Madhura Nagar, S.R.Nagar, Post,Hyderabad. II 3. Shri A.V.Raqhava [Raju, S/o.A.V.Rama Raju, aged about 48 years, Director of]tvl/s. Uttarashada [Bio-Tech ][Pvt. Ltd., ][2-13131, ] [Nagar, ][Opp: ][Hyder ][Nagar,]kukatpally, Hyderabad-7 [2.]4. Sri lvl. Surayanarayana Raju, S/o.M.V.Ramakrishnam Raju, aged about [36]years, Director of M/s. Uttarashada Bio -Tech Pvt. Ltd., H.No.37, Vikaspuri,S. R.Nagar Post, Hyderabad-38.....Appellants/ Accused 1, 3, 4 & 5And Dy. Comrnissioner of lncome-Tax, Central Circle-9, Room No.813. 8th floor, AayakarBhavan, Basheerbagh, Hyderabad-500004. ...RESPONDENT/ COMPLAINANT For the Petitioner : SRI VINOD KUMAR DESHPANDE, SENIOR COUNSEL FORSRI. G.ASHOK REDDY For the Respondent : SRI B.NARASIMHA SHARMA, SC FOR l.T. The Court delivered the following : COMMON JUDGMENT THE HON'BLE DR. JUSTICE D.NAGARJUN CBI]4INA! 4EPE4! 1I& Nos.6 an4 72 of 2o18 COMMON JUDGMETN: Cr1.A.(TR).No.72 ol 2O7B is filed by Al and A3 to A5 i.e.,Company and its three Directors respectively, whereasCrl.A.(TR).No.6 of 2Oi8 is filed by A2, who is another Director ofA 1 / company, being aggrieved by the conviction and sentenceimposed by the learned Special Judge lor Economic Olfences atHyderabad in C.C.No. 132 of 2Ol1 vide Judgment datedO9.Ol.2Ol4, wherein Accused Nos. 1 to 5 were found guiity ofthe offences punishable under Section 276-C(21 read withSection 278-8 of the Income Tax Act, 196 1 (for short, "the Act")consequently accused No.I was sentenced to pay fine ofRs.1O,O00/- and in default of payment of {ine to initiateappropriate proceedingsrequired under Section 421 ofCr.P.C., whereas Accused Nos.2 to 5 were sentenced to undergorigorous imprisonment for a period of one year each and to payfine of Rs.10,0OO/- each and in default of payment of fine byaccused Nos.2 to 5, to undergo simple imprisonment [for ][a ][period]of one month each. Since the issues involved in these appeals are one and thesame, both the appeals are being disposed of by this commonjudgment. Since the issues involved in these appeals are one and thesame, both the appeals are being disposed of by this commonjudgment. 2. For convenience, the parties herein are referred to as theya,rea,rrayed before the trial Court. i.e., Appellant No.1 asAccused No.1/Company arrd Appellant Nos.2 to 5 as AccusedNos. 2 to 5 3. The genesis of these cases, which lead the appellants-accused to prefer these appeals, are narrated in brief as under: i) Accused No.l/Company - M/s. Uttarashada BiotechPrivate Limited, which was registered under the CompaniesAct with the Registrar of Companies at HyderabadASPrivate Limited Company, was engaged in the business ofacquisition and sale of lands. Appellant Nos. 2 to 5 hereinare the Directors of Accused No.1/Company. i0 Accused No.l/Company has acquired lands to anextent of Ac.7.O3 guntas in Sy.Nos.198 and 282 under thelimits of Bachupally Mandal, Ranga Reddy District duringthe financial year 2002-2003 and developed the said lands i by incurring some arrounts during the financial years2OO2-03 to 2007-O8. Accused No.1/Company along withother companies, who have lands contiguous to the landsof Accused No. 1 / Compan-\,, have agreed to develop thelands jointly with M/s. Mytas Property Private Limited. Asper the said development agreement, the built up areaagreed to be given to Accused No. 1/company, was allowedto be soid 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.llcompary has filed income tax returns on 30.09.2008under Ex.P1 by bifurcating the sale proceeds into long termcapital gains accrued from the sale proceeds of the landsarrd short term capital gains accrued from the saleproceeds of the constructed area by showing gross taxableincome as Rs.5,17,35,7751-, out of which an amount ofRs.3,28,98,1 12 /- was shown as long term capital gain andRs.1,88,37,663/- was shown as short term capital [gains.] iv) Accused No. 1/Company1Sexpected to pay theincome tax either by way of advance tax as required underSection 2OB of the Act or at least along with filing ofreturns in terms of Section i4O-A of the Act. As perSection 143 (1) of the Act, the tax 1iabi1it1' of Accused No.1was arrived at Rs.1,53,88,9 19l- by therespondent/complainant and raised a demand underSection 156 read with Section 143 of the Act and issued anintimation to Accused No.1/Company under Ex.P2.Accused No.1/company\\rasrequired to pay the taxdemanded within 30 days of service of notice, but it hascommitted default. v) Respondent/complainant has issued show-causenotice dated 17.ll.2OO9 under Section 221 (11 of the Actuntler Ex.PS, wherein the appellants were asked to showcause as to why penalty should not be levied forcommitting default in payment of tax. As there was noresponse from the appellants, the complainant has issuedanother show-cause notice dated 25.08.201O under Ex.P6under Section 221 (ll read with Section 143-A of the Act v) Respondent/complainant has issued show-causenotice dated 17.ll.2OO9 under Section 221 (11 of the Actuntler Ex.PS, wherein the appellants were asked to showcause as to why penalty should not be levied forcommitting default in payment of tax. As there was noresponse from the appellants, the complainant has issuedanother show-cause notice dated 25.08.201O under Ex.P6under Section 221 (ll read with Section 143-A of the Act Finally, one more opportunitl, u,as also given bv theDepartment by giving another show-cause notice dated12.1O.2OlO [(Ex.P7) ]under Section 221 (1) read with Section143-A 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.34,00,000/-\AI Simposed by rvay of order dated25.1O.2O1O (Ex.PB) under Section 227 read with Section140-A(3) ol the Act and the said proceedings were servedon accused No. 1 on 29 .lO .2O 10 .4. . Considering the willlul evasion ol payment of tax, therespondent/complainant has decided to initiate prosecution andaccordingly a notice was issued to accused No.l/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 repiy stating that there was nointention to evade payment of tax. Another notice was issued toaccused No.l/Company and its directors under Exs.PlO andPl1 dated 11.01.201 1 asking them as to why prosecution shall not lre: initiated under Section 276-C(2\ of the Act. Again repliesr,',,ere llled b1' accused No. 1/company and its Drrectors/ accusedNos.2 to 5 under Exs.P1l and P13 stating that there \\ras nointention of wi1lful evasion of tax. 5. As r\ccused No. 1/Company and its Directors/ accusedNos.2 to 5 have not paid the tax in response to the demandnotice isstred under Section 1a3 (1) of the Act and a-lso failed topa-y the penalty, the respondent/complalnant alter obtainingsanction order dated 16.03.2011 for launching of prosecutionfiled a complaint before the Special Court for Economic Offencesagair, st accused No.1 and accused Nos.2 to 5, the otherDirectors, alleging that they have committed offence punishableunder Section 276-C(21 read with Section 278-8 of the Act, asthev have willlully evaded tax even though they r,ere havingsufficient resources. 6. The Special Court for Economic Offences took cognizanceof the offences against Accused No,1/Company and its Directorsi.e., Accused Nos. 1 to 5, under Section 276-C(21 read withSection 278-8 of the Act and charges were framed against themunder Section 276 - C(2) read with Section 278-B(ll of the Act -/ and ali the accused have pleaded not guilty of the charges andciaimed to be tried. 7. In order to prove the charges leveled against theappeilants, 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 PW1 is that after receivingof returns of income tax filed by accused No. l/company, therespondent/complainant has processed the same under Section1a3(1) of the Act and issued intimation determining the totaltaxable income as Rs.5,17,36,320/- and tax liabilityASRs.1,69,13,4701-. T}l'e evidence of PW2/Income Tax ofhcer is tothe extent that he has considered the annual report of accusedNo.1/company for the financial year 2OO7 -O8 under Ex.P3 andtrtt\account statements of accused No.l/Company with the 8. The substance of the evidence of PW1 is that after receivingof returns of income tax filed by accused No. l/company, therespondent/complainant has processed the same under Section1a3(1) of the Act and issued intimation determining the totaltaxable income as Rs.5,17,36,320/- and tax liabilityASRs.1,69,13,4701-. T}l'e evidence of PW2/Income Tax ofhcer is tothe extent that he has considered the annual report of accusedNo.1/company for the financial year 2OO7 -O8 under Ex.P3 andtrtt\account statements of accused No.l/Company with the AXIS Bank Limited under Ex.P4 and found that accusedNo.1/Company did not pay the tax returns in spite of havingsurplus ald sufficient funds. PW3 is the Income Tax Officer,who has succeeded PW2. His evidence is th:rt he has passedpenaltl' order under Ex.P8 imposing penaltv of Rs.34 lakhs andraised demand under Ex.P9 and the same u'as served on theaccused. He also deposed that as there was no response fromthe zrccused. show cause notices under Section 276-C of the Actq,ere issued against all the accused through w'hich accused u'ereinformed that the department is initiating criminal proceedingsancl consequently the department has filed the complaint. 9. After full-fledged trial, on considering the entire material onrecord, the trial Court has found Accused No.l/Company and42 to A5, the Directors of A1 company, guilty of the offencespunishable under Sections 276-C(21 and 278-8 of the Act artdwere sentenced as stated supra. Aggrieved by the said judgmentand conviction of Special Judge for Economical Offences atHycterabad, the present appeals are filed originally before theMetropolitan Sessions Judge Court at Hyderabad. .t 10. The erstwhiie High Court for the States of Telangana andAndhra Pradesh has issued circular ROC.No.34, CriminalSection/20 17, dated 2B.OB.2Ol7, u,herein it is clarified tharagainst any orders passed by the Special Judge for EconomicOffences, Hyderabad, in the State of Teiangana 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 filed by theappellalts have been transferred from Metropolitan SessionsJudge Court, Hyderabad, to the High Court for the State ofTelangana. t J. The summary of grounds of appeal as filed by theappellants in brief are as under: a) The trial Court has failed to see that accusedNo.1/company was not having funds to pay the tax on the duedate as reflected in Ex.P4-balk statements and that accusedNo.l has not received any sale proceeds from M/s. MytasProper[z Private Limited, thereby the respondent/ complainanthas not produced any evidence to show that accused No.l /Company has received sale proceeds lrom M/s. MytasProperty Private Limited b) The trial court has misconstrued the presumption underSection 278-E of the Act and erred in holding that the burden ofploof is on the accused to prove that there \\ras no u'illful evasionof payment of tax. c) The trial Court erred in holding that the accused failed toprove non-existence of culpable menta-l state in non-payment ofta-xes on the date of filing returns and as on the date ol demandnotice and that the trial Court lailed to appreciate that in spite ofnot har.,ing arry cogent evidence to show that a1l the accusedhave willfuily evaded the tax, the tria-l Court has concluded thatacr:trsed have committed willful evasion in payment of tax. d) The triai court failed to see that all the assets belong toacc:u sed No.1/Company were attached under Section 281-B ofthe .q.ct and due to paralyzing of financial activities of accusedNo. 1, tax could not be paid in time. e) The tria.l court failed to consider the admission of PW3 thatthe amount received by Accused No.l/Company is toyards i share application money does not attract tax iiability and thatthe triai Court could not consider that accused No.1 has notreceived Rs.S crores 17 iakhs from M/s. Mytas Propert,r, PrivateLimited. d) The triai court failed to see that all the assets belong toacc:u sed No.1/Company were attached under Section 281-B ofthe .q.ct and due to paralyzing of financial activities of accusedNo. 1, tax could not be paid in time. e) The tria.l court failed to consider the admission of PW3 thatthe amount received by Accused No.l/Company is toyards i share application money does not attract tax iiability and thatthe triai Court could not consider that accused No.1 has notreceived Rs.S crores 17 iakhs from M/s. Mytas Propert,r, PrivateLimited. l) The Trial Court should not have concluded that accusedNos.2 to 5 are responsible for day to day affairs of accusedNo. l/company and should have taken into consideration thenotices issued under Section 278-8 of the Act proposing theprosecution did not refer accused Nos. 2 to 5 as principal oflicersand thereby accused Nos.2 to 5 should have been acquitted. 12. Heard Sri Vinod Kumar Deshpande, learned Senior counselfor the appellants and Sri B. Narasimha Sharma, learnedStanding counsel for the income tax department, considered theentire material on record, relevant provisions of the Act and theauthorities cited. 13. Appellant No.l/company has filed an application underSection 39 1 Cr.P.C., along with the appeal for receiving of twodocuments i.e., (1) Common order passed by the AppellateTribunal in ITA.No.1OO6 of 2014, dated 22.05.20 15 and [(2)] consequentiai order, dated 2i.03.2016 passeC by the AssessingOfficer, Assistant Commissioner of Income Tax, Central Circle3(2), Hvderabad, as additional evidence. As per the commonordel of the Tribunal, dated 22.05.2015 (doctrment No.1), theassessment order dated 02.l2.2OIO on which the prosecution isinil-ratcd ri'as directed to be modified. Basing on the orders of theIncome Ta-x Appellate TribunaJ, the assessment oflicer hasmo<lilied Lhe earlier orders daled 02.12.2010 bv re-erssessing thetax habilitr'. u hich the appellants were expected to pay lor theassessment ycar 2OO7 -2008 (document No.2). Considering theabovr-', a;rd on hearing both sides, this Court is of the opinionthat these two documents are very relevant to consider theappeals on hand, thereby these documents are received. 14. It is submitted vehemently by the learned Senior Counselfor the appellants that during the pendency of the complaintbefore the trial Court, the accused have paid entire tax asdemanded, including the penalty and interest and that theappellants have challenged the assessment orders datedO2.12.2O1O under Ex.D2 before the learned CIT(A). On hearingboth sides, learned CIT(A) has found that there are no merits in -l- the contentions raised by the appellants. and dismissed theappeal upholding the orders passed by the Assessing Oflicer lorassessment year 2OO8-09. Aggrieved by the same, theappellants have preferred appeal before the Income Tax AppellateTribunal (in short, "the Tribunal"), and on hearing both sides,learned Tribunal has partly allowed the appeal vide orders dated22.O5.2015 in ITA.No.943lHydl2Ola and others finding that theAssessing Officer has committed error in calculating the tax tobe paid by the appellants and directed the Assessing Ollicer 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.132 of 2Ol1 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 olthe Tribunal and passed consequential order, dated 2I.03.2O16,wherein the tax liability was substantially reduced and foundthat the tax, which was already paid to the tune of Rs.1,53,89,101/- u,as in excess of the revised tax thereby, theexcess tztx paid Rs. 1,00, 13,035/- and interest of Rs.29,59,900/-th€' total of s,hich was Rs.1,29 ,72,9351 -, s'as ordered to berefunded and the same was also adjusted against the demandfor the accounting year 2009-10 vide RO.No.303520 dated28.O3.2016. On co nsidering the submissions of the learned Seniorcor.rrLsel rt is clear that the appellants have not onilr paid the taxdemanded along u,ith interest and penalty, but also on accountof re-assessment of tax, the tax already paid r.,,,as in excess of taxliability, and that the same was adjusted for luture tax liabilityancl hence, sought for allowing of the appea-ls. i5. karned standing counsel representing the Income TaxDepartment stated that as on the due date, the accused have notpaid the tax having sufficient funds and committed willfu1evasion of payment of tax. It is also submitted that AccusedNo.l/company has filed annual returns (Ex.P3), through itsCharterecl Accountant for the financial year 2007-08 relevant forthe assessment year 20O8-O9, according to which Accused No. 1made profit on sale of land to a tune of Rs.4,84,39 ,8631- and the bank statements show that Accused No. 1/Company has receivedpart of sale consideration in respect of "Mytas Hill Countl"' fromtime to time, but did not choose to pay the advance tax. It isfurther submitted that the balance sheet of AccusedNo. l/Company also shows Rs.7,29,97,759/- under the headreserves and surplus, so also Rs.10,34,53,4721- under the headcurrent assets of loans ald advances. It is furtherby way submitted that accused No.1/Company having enough liquidcash during the relevant accounting year, willfully evaded inpayment of tax, thereby the accused have committed the offencepunishable under Section 276-C(21 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.l2.2OlO was subsequently revised? 2l Whether the accused have committed willfulevasion of tax? I 3) To u,hat reiieP Point No. 1: 77. The cause of action for the respondentdepzutment/ complainant to file the complaint against theappeliants is the assessment order dated 02.12.2O1O, accordingto r.vhich the appellants were asked to pay tax ofRs. 1,53,88,91.9 l- for the taxable income of Rs.5,17 .35,7751 andaccordingly an intimation was sent by the Assessing officer tothe appellarits under Section 143 (1) of the Act. Admittediy ason the date of initiating the prosecution against the appellants,demanded tax of Rs. 1,69,13,4701- was not paid by theappellants. It is also an admitted fact that after initiating theprosecution, the appellants have paid the entire tax demandedalong with penalty, interest etc. Therefore, as on the date ofpronouncement of the judgment by the tria,l Court. there was notax liability to be paid by the appeliants. 18. It [js ]to be noted that the Income Tax Appellant Tribunalhaving considered the appeals of the appellalts found that theass€:ssment order, dated 02.I2.2010 directing the appellants topay Rs. i,53,88,919/- was incorrect and the Assessment Officer { 18. It [js ]to be noted that the Income Tax Appellant Tribunalhaving considered the appeals of the appellalts found that theass€:ssment order, dated 02.I2.2010 directing the appellants topay Rs. i,53,88,919/- was incorrect and the Assessment Officer { u,as directed to assess the income tax afresh in terms of thedirections given bv rl.re Tribunal. Accordingly, the Assessmenrofficer has re-assessed the income tax and passed modifiedorders, dated 21.03.2016 determining the tax iiability, which isfar less than what was assessed at the first place. The basis forrespondent/ complainant to initiate prosecution against theappellants is the assessment order, dated O2.l2.2OlO, on theground that the appellants have committed default in payment ofthe tax as per the said assessment order. When assessmentorder dated 02.12.2OlO itself is re-assessed as per the directionsof the Tribunal which held that the assessment of tax dated02.12.2OlO is incorrect and the tax to be paid was substantiallyreduced, it cannot be alleged that the appellants have committeddefault in payment of tax and willfully evaded. When theassessment order dated 02.12.2010 itself was modihed holdingthat the Assessment Officer has incorrectly assessed the tax,whatever the consequential proceedings that have been initiated,including the initiation of prosecution of the appellants by therespondent/complainant, conviction recorded by the trial Court,cannot sustain. Basing on the fresh assessment order, dated21.03.2016, it is to be examined afresh that whether the appellants have committed an1' r'illful evasion ol tax, as definedunder Section 276-C of the Act. 19. Therefore, on considering the above discussion, it is clearthat the linding ol the trial Court that the appellants u,ere guiltyof the offences under Section 276-C(21 read with Section 278-8ol the Act is erroneous as the same is based on incorrectassessment order, dated 02.12.2O10 and hence, shall notsustain, and required to be set aside. Considering the same, point No. 1 is decided in favour ofthe a ppellan ts / accu sed. POINT No.2:- 20. The appellants have also raised other issues i.e., they havenot committed any willful evasion in payment of tax since, as onthe due date there were no liquid funds in their accounts arrdthe appellants - Accused Nos. 2 to 5, who are the Directors, areno1 responsible for the day to day activities of accusedNo. 1 / Company as on the date of the alleged default, the trialCourt has misconstrued the presumption under Section 27 8E ofthe Act, the trial Court failed to record admission of PW.3. that the amount received tou'ards share application does not attractthe tax etc. 21. 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 olthe fact that the assessment order dated O2.l2.2OlO on whichthe conviction \ [/as ]recorded \4/as modified and a freshassessment order came into force, hence, the issues raised bythe appellants, need not be answered. 22. Learned Senior Counsel for the appellants has placedreliance on the authority passed by the Hon'ble Supreme Courtin the case of V.Srinivas Reddy Vs. State of Andhra Pradeshl,wherein it was heid as follows: "13. It was then urged by Mr. Antnachalam that ifthe High Court felt that further eui.d"ence ltas necessary.for [disposal ][of ][the ][case ][then ][it ][auld ][haue ][exercised ][its]pouer under Section 391 Cr. P.C. and ought not to haueset aside the order of acquittal and remanded the matterfor fresh [disposal. ][This argument also ][did ][not ][impress ][us]because the Hiqh Court instead of recording the additionaleuidence in terms of Section 391 Cr. P.C.; [preferred ]toremand the matter back to tLe tial court .for disposal inaccordonce tuith latu. lt also appears from the record thatsome of th.e documents including FDRs, loan applicationsetc., should also haue been brought on record for effectiue "13. It was then urged by Mr. Antnachalam that ifthe High Court felt that further eui.d"ence ltas necessary.for [disposal ][of ][the ][case ][then ][it ][auld ][haue ][exercised ][its]pouer under Section 391 Cr. P.C. and ought not to haueset aside the order of acquittal and remanded the matterfor fresh [disposal. ][This argument also ][did ][not ][impress ][us]because the Hiqh Court instead of recording the additionaleuidence in terms of Section 391 Cr. P.C.; [preferred ]toremand the matter back to tLe tial court .for disposal inaccordonce tuith latu. lt also appears from the record thatsome of th.e documents including FDRs, loan applicationsetc., should also haue been brought on record for effectiue disposctl of the controuersq raised bt the case artd to dojtLsttce betuteen the parties. /l is needless to satt that thetial court will stictly adhere to the obseruations anddirections giuen bg the HAh Court in its [judgment."] The rationale in the above authoritl/ of the Apex Courtsquzrely applicable to the facts of the case on hand 23. Considering the facts and circumstances, this Court is ofthe considered opinion that as the assessment orders dated02.12.2010 on which the prosecution u'as inrtiated itself doesnot eist and that the same was modified and fresh assessmentorder dated 21.03.2076 came into force, the conviction andsentc'nce recorded again st the appellants basing on the incorrectassessment orders dated02.L2.201O shall be set aside. 24 . Accordingly, both these criminal appeals are disposed ofsettir-rg a.side the conviction and sentence dated 09.O1.2014recorded by Special Court for Economical Offences at Hyderabadand C.C.No.732 of 2Ol1 is remanded back to the trial Court witha direction to consider the documents i.e., (1) Common orderpassed by the Appellate Tribunal in ITA.No.lOO6 o1 2014, dated22.O5.2075 and (21 consequential order, dated 21.03.2016passed by the Assessing Officer, Assistant Commissioner of '.] To *{ Income Ta-x, Central Circle 3(2), Hyderabad, filed by theappeilants and decide the complaint afresh in accordance withlaw, after giving an opportunity to both sides to adduce anyfurther evidence, if an1,. Hou,ever, the trial Court shall not beinfluenced by the comments and observations, if any, made bythis Court touching merits of the case while passing orders. As a sequel, pending miscellaneous applications, if any,sha-ll stand closed. Sd/-K.SRINIVASA RAOJOINT REGISTRARSE[qWrrrcea] //TRUE COPY// 1. The Special Judge for Economic Offences at Hyderabad. z. The Dy. Commisiionerof lncome Tax, Central Circle -9, Room No.813, BthFloor, Aayakar Bhavan, Basheerbagh, Hyderabad-500004. 3. One CC to Sri G.Ashok Reddy, Advocate 4. One CC to Sri B.Narasimha Sharma, SC for 1.T., 5. One CC to Sri V.Surender Rao, Advocate 6. Two CD Copies7. One Spare Copy HIGH COI.JRTDATED:'l {iltl1[ORDERCRLA(TR).Nos .6 and 72 of 2018 I 4IDISPoSING OF THE BOTH CRL.As.(TR)vl