Income Tax Officer, Ward-1(1), Bathinda v. Geeta Devi And Other

CRR-1317-2015(O&M) -|- IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. CRR-1317-2015(0&M)Date of decision:-22.5.2018 Income Tax Officer, Ward-1(1), Bathinda _.Petitioner Versus (Geeta Devi and other ...Respondents CORAM:HON'BLE MR.JIUSTICEK H.S.MADA Present:Mr.Dinesh Goyal, Advocatefor the petitioner.Mr.Amit Aggarwal, Advocatefor the respondents No.1! to 4 Mr.Saurav Khurana, DAG, Punjab, 8888 H.S. MADAAN, J. Complainant - Income Tax Officer,Ward-1(3), Bathinda hadfiled a complaint under Sections 276 C and 277 read with Section 278 Bof Income Tax Act, 1961 (hereinafter referred to asthe Acf) against M/sSharma Misthan Bhandar and others on the allegations that accused hadbeen drawing considerable income by sale of sweets, meals and other CRR-1317-2015(O&M) -~) eatables running their business under the name and style of M/s SharmaMisthan Bhandar situated at The Mall, Bathinda; that such concern hadfiled return of income tax for the assessment year 1987-88 at Rs.64,720on 27.7.1987 duly signed and verified by accused Pardeep Kumar aspartner of the firm; that statement was accompanied by the statement ofcomputation of income for the year ending 31.3.1987 along with fourchallans of tax, total amounting to Rs.4,708/- as well as Form No.12 Le.for making declaration under Section 184(7) of the Act for continuation ofregistration of the firm; that the income was processed under Section143(1) of the Act and the return of income was accepted, however,subsequently on perusal of the documents attached with the returnAssessing Officer found that certain new credits had been introduced,therefore, with the prior permission from the Deputy Commissioner,Income Tax, Bathinda Range, Bathinda, the Assessing Officer reopenedthe assessment under Section 143(2)(b); that when permission wasgranted, notice dated 30.3.1989 and 9.5.1989 under Sections 142(1) and143(2) were issued to accused to produce evidence in support of the return1.e. all books of the account, purchase and sale of vouchers, pass booksdetails of the new cash credit introduced during the year; that during thecourse of assessment, accused Pardeep Kumar along with his Accountantand Advocate attended the proceedings and produced the account booksbefore the Assessing Officer, which were examined and it was found thatthe purchase of empty card board boxes had not been accounted for in thebooks of account; that as regards the card board boxes, it was admittedthat those were included in weight of the sweets at the time of the sale and CRR-1317-2015(O&M) -3- the sales were not vouched and no day to day stock register wasmaintained and bill books were also not maintained, therefore, theaccused had intentionally created such circumstances to enable itself toevade the tax and penalty chargeable and imposable under the Act,therefore, proviso of Section 145(1) was made applicable and the saleswere estimated at Rs.6,50,000 against the declared sales of Rs.5,07,724/-and the gross profit at 45% was applied as against 41.43% shown in thereturn; that according to return of the income, the assessee had introducednew cash credits as under: |. Smt.Geeta DevRs.8,500/- 2. Smnt.Savitri Devi w/o Sh.Som DuttRs.5,000/- CRR-1317-2015(O&M) -3- the sales were not vouched and no day to day stock register wasmaintained and bill books were also not maintained, therefore, theaccused had intentionally created such circumstances to enable itself toevade the tax and penalty chargeable and imposable under the Act,therefore, proviso of Section 145(1) was made applicable and the saleswere estimated at Rs.6,50,000 against the declared sales of Rs.5,07,724/-and the gross profit at 45% was applied as against 41.43% shown in thereturn; that according to return of the income, the assessee had introducednew cash credits as under: |. Smt.Geeta DevRs.8,500/- 2. Smnt.Savitri Devi w/o Sh.Som DuttRs.5,000/- Those cash credits were found to be bogus. The AssessingOfficer vide order dated 11.7.1989 required the Assessee to produceSavitri Devi and Geeta Devi, however, they failed to put in appearance. Inthe reply filed, it was stated by Geeta Devi and Savitri Devi, that thecreditors were not inclined to come in the Court since that was prohibitedby their customs. The Assessing Officer deputed the Inspector to recordthe statement of the accused Nos.4 and 5 at their residence and theirStatements were recorded on 28.7.1989, trom the perusal of which, theAssessing Officer find that they could not earn the net income ofRs.18,200/- from their respective jobs and credits were found to be bogus,in that way amount of Rs.8500/- and Rs.5,000/- belongs to accused No.1and these credits had been shown to deflate the income and with intent toevade the tax and penalty chargeable and imposable under the Act, assuch, the said amount was added to the income of accused No.1. Geeta CRR-1317-2015(O&M) Devi is said to be wite of Pardeep Kumar and Savitri Devi is wife of SomDutt, partners of the firm. Accused Nos. 4 and 5 had assisted the accusedfirm in evading the tax, penalty, chargeable and imposable by giving falseatfidavits and statements of account knowingly it to be false, thuscommitting offence under Sections 276 C and 278 of the Act. Penaltyproceedings under Sections 271 (1)(c) and 273(2)(a) were ordered to beinitiated. Accused was aggrieved by the order dated 31.7.1989 passed bythe Assessing Officer and preferred an appeal, which however, upheld theaddition made on account of cash credits i.e. 13,500/- and 6,000/- onaccount of sale of bardana. Accordingly it was so done. Departmentalproceedings of assessment in the income tax office had been going on. On a complaint having been filed, accused were summonedand they put in appearance and admitted to bail. During the pre-charge evidence, the complainant examinedITO Gopi Chand as CW1, who supported the case of complainant andRaghuvirsain Jain (ITO Retd.) as CW2. During the proceedings, accusedSom Dutt had died, as such proceedings against him stood abated.Regarding remaining accused, they were charge-sheerted under Section2/76-C read with Section 277 & 278(B) of the Act, to which, they pleadenot guilty and claimed trial. The trial Court had formulated the following points fordetermination, which are as under; 1) Whether accused Pardeep Kumar, is the partner ofaccused No.1 and has willfully attempted to evade thetax, penalty and interest chargeable, imposable under under: the Income tax Act? 2) Whether accused Geeta Devi and Savitri Devi havassisted accused firm in evading the tax, penalty andinterest chargeable, imposable under the Income TaxAct? 3) Whether the complainant has been able to prove itcase, as alleged? The trial Court in the concluding para No.24 has observed as The trial Court had formulated the following points fordetermination, which are as under; 1) Whether accused Pardeep Kumar, is the partner ofaccused No.1 and has willfully attempted to evade thetax, penalty and interest chargeable, imposable under under: the Income tax Act? 2) Whether accused Geeta Devi and Savitri Devi havassisted accused firm in evading the tax, penalty andinterest chargeable, imposable under the Income TaxAct? 3) Whether the complainant has been able to prove itcase, as alleged? The trial Court in the concluding para No.24 has observed as But with the evidence on file it is duly proved onrecord that accused No.1 M/s Sharma Mishthan Bhandarand accused No.2 Pardeep Kumar being the partner of thefirm, filed the income tax return which was processed and itwas found that new credits have been introduced and uponpermission of the Deputy Commissioner,Income Tax, theassessment was reopened under Section 143(2)(b). Noticewas issued which was attended by the accused. During thecourse of assessment, accused Pardeep Kumar along withaccountant and its Advocate attended the proceeding andproduced the account books before the Assessing Officer.The same were not relied upon as their maintenance wassuch which was not subject to verification. On examination ofthe same, it was found that the purchase of empty GattaBoxes (Dabbas) have not been accounted in the books ofaccount. The sales were not vouched and no day to day stock CRR-1317-2015(O&M) register was maintained. No bill books were also maintainedand as such accused deliberately had created suchcircumstances to enable itself to evade the tax and penaltychargeable and imposable under the IT. Act 1961.Therefore, the proviso of Section 145(1) was madeapplicable and the sales were estimated at Rs.6,50,000/-against the declared sales of Rs.5,07,724/- and the grossprofit at 45% was applied as against 41.43% shown in thereturn and it was found that since the assessee No.1 enjoysthe income of the sale of sweets meals, Puri, Kachori, Lassietc. and does purchase sugar, maida, vanaspati etc., no saleon account of Bardana has been credited in its books ofaccount and consequently, on account of said sale ofBardana, Rs.6,000/- were added to its income. The totalincome was assessed at Rs.2,67,540/- u/S 143(3). Penaltyproceedings u/S 271(1)(c) and 273(2) (a) were initiated forfurnishing inaccurate particulars of income. Accusedaggrieved against that order dated 31.7.89 passed by theAssessing Officer, preferred an appeal, who however, upheldthe addition made on account of cash credits 1.e. Rs.13,500/-and Rs.6,000/- on account ofsale ofBardana. An addition ofRs.58,855/- has been confirmed on account ofsale ofsweets,meals etc. The assesseefiled second appeal against the orderofLd. CIT(A) before the ITAT, Amritsar which was dismissedand upheld the addition. The penalty proceedings were CRR-1317-2015(O&M) -/- initiated and Assessing Officer imposed penalty at the rate of200% vide order dated 26.2.1992. The accused aggrievedagainst the said order preferred an appeal before theCommissioner of Income Tax (Appeals), who upheld thepenalty regarding unexplained credits of Rs.13,500/- andsale ofBardana amounting to Rs.6,000/-. Second appeal waspreferred and ITAT, Amritsar set aside the order dated16.6.1992 passed by the CIT(A) and remanded the case toCIT(A) for fresh decision. The CIT(A), Bathinda vide orderdated 22.4.1999 again confirmed the penalty ofRs.9,500/- atthe rate of 100% of the tax sought to be evaded. As such,accused No.1 firm through accused No.2 partner of the firmattempted to evade the tax,penalty chargeable and imposableunder the Act| The trial Court acquitted accused Geeta Devi and SavitriDevi, whereas convicted accused Pardeep Kumar for the offences underSections 276-C, 277 and 278-B of the Act and sentenced him thereunder. The trial Court acquitted accused Geeta Devi and SavitriDevi, whereas convicted accused Pardeep Kumar for the offences underSections 276-C, 277 and 278-B of the Act and sentenced him thereunder. Aggrieved by this judgment, the complainant had preferredan appeal to the Court of Sessions, which was marked to learnedAdditional Sessions Judge (Fast Track Court), Bathinda, who disposed otthe appeal vide order dated 22.9.2014 finding that there was no illegalityin the impugned judgment of acquittal passed by the trial Court, therefore,the acquittal of respondents No.l] and 2 was upheld. Learned AdditionaSessions Judge (Fast Track Court), Bathinda has given the followingreasoning while arrived at this conclusion: CRR-1317-2015(O&M) -8- After hearing the rival submissions and going throughthe evidence on record, it is made out that the appellantfileda complaint against the respondents with the allegations thatrespondents have willfully made an attempt to evade tax,penalty, chargeable and imposable under the Act andaccused No.4 & 5(now respondents No.l & 2) abettedaccused no.I to 3 (now respondents no.3,4, 5) to deflate theincome and to enable them to evade tax and penalty andfurther for furnishing wrong information in the income taxreturn, respondent no.3, the assessee firm submitted itsreturn of income for the assessment year 1987-1988 showingits income as Rs.64,720 which was duly signed by respondentPardeep Kumar. Upon scrutiny of documents the AssessmentOfficer found that some new credits have been shown in thereturn in the name of Mrs.Sawitri Devi and Mrs.GeetaDev1,who were also partners of the assessee firm. It was alsofound that purchase of empty gatta boxes(dabbas) have notbeen accountedfor in the account books however admittedlythe boxes were included in the weight ofsweets at the time ofsale of sweets and it was not vouched and no bill book wasmaintained with respect to sale purchase of these gattaboxes. Therefore, by invoking provisions of Section 145(1)the sales income of the firm was assessed as Rs.6,50,000which also included the deposits shown in the name of GeetaDevi and Savitri Devi to the tune ofRs.13,500/-. This amount CRR-1317-2015(O&M) -9- was shown in the income of assessee firm by the assessmentofficer on the ground that they have failed to show that theywere earning this much amount. The assessment officeradmitted in his cross-exaqmination that both therespondents were summoned, who before him in connectionwith the deposits shown by them in the income tax returns butthey did not appear before the assessment officer, then hedeputed one Rajinder Singh Inspector to record theirstatements and on the basis of that statements he came to theconclusion that they could not earn this amount so it cannotbe taken their income. Then he included this amount in theincome of assessee firm 1.e. respondent No.3. It has beenrightly contendedfor the learned counsel for the respondentthat Rajinder Singh has not been examined as a witness inthe Court who recorded their statements so those statementscannot be taken into evidence as per rules oflaw of evidence.A criminal Court has to decide the case on the basis ofindependent evidence. It cannot base the conviction on thereport submitted by the Assessment Valuation Officer, on thebasis ofwhich the department has made the assessment oftheincome ofthe assessee. Asfar as allegations of abetment are concerned,this fact is also be required to be proved by way of cogentand convincing evidence that respondent Nol and 2 abettedthe offence by conspiring with the principal accused. In order CRR-1317-2015(O&M) -10- to prove the ingredients of the offence of abetment, the Courtrequires an independent and cogent evidence, which is notthere in the instant case, so the learned trial Court hasrightly came to the conclusion that the offence of abetmenthas not been proved to be committed by respondent No.1 and2. Asfar as allegations of abetment are concerned,this fact is also be required to be proved by way of cogentand convincing evidence that respondent Nol and 2 abettedthe offence by conspiring with the principal accused. In order CRR-1317-2015(O&M) -10- to prove the ingredients of the offence of abetment, the Courtrequires an independent and cogent evidence, which is notthere in the instant case, so the learned trial Court hasrightly came to the conclusion that the offence of abetmenthas not been proved to be committed by respondent No.1 and2. From the aforesaid discussion, it is made outthat there is no illegality in the impugned judgment ofacquittal, passed by learned lower Court. Consequently, theimpugnedjudgment ofacquittal of respondents /accused no.and 2, dated 23.9.2011, passed by the learned trialMagistrate are upheld and the appeal being devoid of anymerit, 1s dismissed. Being dissatisfied by the said judgment passed by learnedAdditional Sessions Judge (Fast Track Court), Bathinda, the petitioner hasfiled the present revision petition, notice of which was issued to therespondents, who put in appearance through counsel. I have heard learned counsel for the revisionist — accused andlearned counsel for the complainant besides going through the record. The law is well settled that the revisional jurisdiction of thisCourt is quite limited. This Court is to interfere only if there is anillegality or infirmity apparent on the face of the judgment/order passedby a Court below or the same is perverse and not otherwise, I do not find any illegality or infirmity with the impugnedorders, which might have called for interference by this Court while CRR-1317-2015(O&M)exercising revisional jurisdiction, Finding no merit in the petition, the same stands dismissed.Necessary information be sent to the quarter concerned. 22 52018BriWhether reasoned/speaking :Whether reportable (H.S.MADAAN)JUDGEYes/NoYes/No