Crl.p/7189/2016 Of Sri. M.g. Vinay Simha v. The Income Tax Department

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25 DAY OF NOVEMBER 2016 BEFORE THE HON’BLE MR. JUSTICE ANAND BYRAREDDY CRIMINAL PETITION No.7189 OF 2016 BETWEEN: Sri. M.G.Vinay Simha, Son of Sri. M.N.Gopala Swamy, Aged 43 years, Residing at No.21/A, Pearl Gardens, Vajarahalli, Kanakapura Road, Bengaluru – 560 062. …PETITIONER (By Shri K.P.Kumar, Senior Advocate for Shri Dinesh P., Advocate) AND: The Income Tax Department, By its Deputy Commissioner of Income Tax, Central Circle -2(2), C.R.Building, Queens Road, Bengaluru – 560 032. …RESPONDENT (By Shri Jeevan J. Neeralagi, Advocate for Respondent) ***** This Criminal Petition filed under Section 482 code of Criminal Procedure, 1973, praying to quash the proceedings taking cognizance of the offences punishable under Sections 277 and 277A the Income Tax Act, registered in C.C.No.86/2014 before the Special Court (Economic Offences), Bengaluru. This Criminal Petition coming on for Admission this day, the court made the following: O R D E R Heard the learned Senior Advocate Shri K.P. Kumar appearing for the counsel for the petitioner and the learned counsel for the respondent. 2. At the outset, it is stated by the learned counsel for the respondent that the petitioner has filed an application seeking discharge under Section 245(2) of the Code of Criminal Procedure, 1973 and therefore, the present petition is an addition to such a relief sought before the Trial Court, which is pending consideration. 3. However, the learned Senior Advocate Shri K.P. Kumar points out that the proceedings initiated against the petitioner in Case No.C.C.No.86/2014 before the Special Court for Economic Offences, Bangalore, is a duplication of an earlier criminal case which is already registered and where charge sheet has been filed in C.C.No.52528/2015 on the file of the XI Additional Chief Metropolitan Magistrate, Mayo Hall, Bangalore. The brief facts are as follows: The petitioner is said to be a qualified Chartered Accountant. He was authorized under a power of attorney to appear on behalf of Shri H. Nagaraja and his group concerns before the Assessing Officer under the Income Tax Act, 1961 (hereinafter referred to as ‘the IT Act’, for brevity). It transpires that a search under Section 132 of the IT Act was conducted in the premises of one Dayanand Pai and his employee Smt. Adlene Kagoo on 12.04.2011. Based on the information collected in the search, the Assessing Officer had proceeded to reopen assessments for the Assessment years 2005-06 to 2010-11 in the group of cases of Shri H. Nagaraja and others. He had quantified the assessments under separate assessment orders dated 13.03.2013, as under: Aggrieved by such re-assessment order, appeals were preferred before the Commissioner of Income Tax. The appeals were said to be pending consideration before the Appellate Commissioner. In the meanwhile, the Assessing Officer has proceeded to raise a demand in respect of the amount quantified in the re-assessment proceedings and directed part payment of Rs.4,57,53,000/- pending adjudication of the appeals before the Appellate Commissioner. 2005-06 to 2010-11 in the group of cases of Shri H. Nagaraja and others. He had quantified the assessments under separate assessment orders dated 13.03.2013, as under: Aggrieved by such re-assessment order, appeals were preferred before the Commissioner of Income Tax. The appeals were said to be pending consideration before the Appellate Commissioner. In the meanwhile, the Assessing Officer has proceeded to raise a demand in respect of the amount quantified in the re-assessment proceedings and directed part payment of Rs.4,57,53,000/- pending adjudication of the appeals before the Appellate Commissioner. The petitioner on behalf of the assessees group of Shri H. Nagaraja had been requesting for extension of time to make part payments of the arrears of taxes demanded pursuant to reassessment orders. The Assessing Officer had been insisting on part payment. The petitioner in order to further gain time to make payment, had made a false statement that part of the arrears were being paid. It is further alleged that the petitioner had produced false challans before the Assessing Officer stating that the demand raised has been paid. On verification, it was found that the amount of arrears of taxes stated to have been paid had not been actually deposited. The Assessing Officer had proceeded to record the statements of Shri H. Nagaraja from the group of assesses of Shri H. Nagaraja who had revealed that the amount stated to have been paid by the petitioner had not been paid under those challans produced by the petitioner. But Nagaraja and others had however paid the amount of taxes demanded as per separate challans, which has been duly acknowledged by the Income Tax Department. The respondent – Assessing Officer in this background had lodged a police complaint that the petitioner without making payment, had produced false challans as aforesaid and as on 1.2.2014, an FIR has been registered by the Commercial Street Police Station and the police after investigation, had proceeded to charge sheet the petitioner in C.C.No.52528/2015 as already sated. The Magistrate has taken cognizance and has proceeded to issue summons to the petitioner. The offences alleged are punishable under Sections 177, 193, 196, 465, 468 477-A, 471, 201 and 420 of the Indian Penal Code, 1860. The petitioner had entered appearance before the Magistrate and obtained bail. Thereafter, the Assessing Officer has independently lodged a complaint under Section 200 Cr.P.C. for offences punishable under Sections 277 and 277A of the IT Act before the Special Court for Economic Offences, notwithstanding the criminal complaint that is already lodged as aforestated. It is this which is the crux of the matter, namely that the petitioner could not be prosecuted twice over in respect of the same set of facts and circumstances. Therefore, the present petition. 4. The learned Senior Advocate while elaborating on the primary ground that is raised, would submit that Section 277 of the IT Act would apply only to an assessee and the petitioner admittedly was not the assessee. He was only representing the assessee. Further, Section 277A of the IT Act would apply only in a situation where there are false entries in the Books of Accounts. In the present case on hand, it is not a case of alleged false entries being made in the books of accounts. The assessment had been completed, appeals had been preferred against the assessment order and re-assessment order and the same is pending. Therefore, the question of invoking Section 277-A would not arise. The learned Senior Advocate would also draw attention to other grounds raised in the present petition. 4. The learned Senior Advocate while elaborating on the primary ground that is raised, would submit that Section 277 of the IT Act would apply only to an assessee and the petitioner admittedly was not the assessee. He was only representing the assessee. Further, Section 277A of the IT Act would apply only in a situation where there are false entries in the Books of Accounts. In the present case on hand, it is not a case of alleged false entries being made in the books of accounts. The assessment had been completed, appeals had been preferred against the assessment order and re-assessment order and the same is pending. Therefore, the question of invoking Section 277-A would not arise. The learned Senior Advocate would also draw attention to other grounds raised in the present petition. 5. However, it would not be prudent for this court to enter upon the several legal grounds raised for the reason that since the application for discharge is pending before the court below, this court is confident that the very grounds raised in this petition would be urged in support of the discharge application and it is for the court below to take a call and pass appropriate orders, in accordance with law. Therefore, without prejudice to the case of the petitioner, the present petition stands disposed of. Sd/- JUDGE KS