State Rep. By,The Income Tax Officer,Film Ward Iii,Shafi Ahamed Road,Chennai-600 006 v. Https://Hcservices.ecourts.gov.in/Hcservices

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR.JUSTICE T.SUDANTHIRAMCrl.R.C.Nos.465, 466 and 467 of 2010 and M.P.Nos.1+1+1 of 2010 Vijayalalitha ..Petitioner in all the petitions/Accused State rep. by,The Income Tax Officer,Film Ward III,Shafi Ahamed Road,Chennai-600 006. Versus ..Respondent/Complainant Prayer: Petitions filed under Section 397 and 401 of Cr.P.C againstthe order dated 27.03.2010 passed by the learned Additional ChiefMetropolitan Magistrate, (E.O-I) Egmore, Chennai in Crl.M.P.Nos.102,100, 101 of 1999 in E.O.C.C.Nos.1646of 1989, 180 of 1988 & 1645 of1989 dismissing the petitions for discharge. For Petitioner :Mr.V. KrishnamurthiFor P. Ramesh KumarFor Respondent: Mr.K. RamasamySpl.P.P. for IT casesC O M M O N O R D E R The petitioner in all these criminal revision cases is one andthe same. He is the accused in E.O.C.C.Nos.180 of 1988, 1645 of 1989and 1646 of 1989 on the files of the learned Additional ChiefMetropolitan Magistrate, (E.O-I), Egmore, Chennai. Complaints havebeen filed by the respondent against the petitioner under Section276C(1) of the Income Tax Act, 1961 r/w Section 193 IPC. 2. The case of the complainant in brief is that a raid wasconducted in the premise of the accused / petitioner herein andduring the raid, two agreements for construction of a building dated04.02.1985 were found. One of the agreement shows the total value asRs.6,63,250/- and the other one was for a value of Rs.3,08,400/-.Though the two agreements are for the same purposes, they wereshowing different values, Income Tax department filed three https://hcservices.ecourts.gov.in/hcservices/ complaints stating that the petitioner might have suppressed herincome by resorting to the agreements for construction of similarprojects. Three complaints were filed by the department against thepetitioner for three different assessment years namely 1985-1986,1986-1987 and 1987-1988. 3. The petitioner herein filed an application under Section 245(i) Cr.P.C. seeking to discharge him in all the three cases. LearnedAdditional Chief Metropolitan Magistrate, (E.O-I), Egmore, Chennaihad dismissed all the three applications. Aggrieved by the orders ofthe learned Magistrate, the petitioner has preferred these threecriminal revision applications. 4. Mr. V. Krishnamurthi, learned counsel appearing for thepetitioner would submit that Section 193 IPC is not attracted.Section 193 IPC would be complied only if the person gives falseevidence in any judicial proceedings or fabricates false evidence forthe purpose of any judicial proceedings. Here, no judicialproceedings are pending and no proceedings initiated also. Learnedcounsel for the petitioner further submitted that even as per theallegations made by the complainant, there is no malafide to showthat the petitioner wilfully attempted to evade any tax imposed. Merepossession of two agreements may not lead to presumption that thepetitioner wilfully attempted to evade the tax. Even otherwise, itmust be said that the accused is at the stage of preparation and notreached the stage of attempting. Learned counsel for the petitionerrelied on the decisions of this Court reported in N. Srinivasan Vs.Uma Rani in (2004 ITR Pg. 77) and A. Radhakrishnan Vs. ITO CityCircle I(4) Madras in (1991 L.W.(Crl.) Pg. 87). 5. Per contra, learned Special Public Prosecutor for IT Caseswould submit that after tracing out the two agreements with differentvalues, the revision petitioner / accused admitted that the secondagreement was made for the lower amount for the purpose of evadingincome tax, though the actual cost for construction of the house isRs.6,63,250/-. Her statement is marked before the trial Court asEx.P.11. Learned Special Public Prosecutor also submitted that thepossession of two different documents is only for the purpose ofevading tax and it cannot be merely construed as preparation tocommit the offence, but willful attempt has been made by the accused.The attempt made by the petitioner can be construed as willfulattempt, since as per Section 278E of the Income Tax Act, theculpable mental state on the part of the accused should be presumedby that. 6. This Court considered the submissions made on either side andperused the materials available on record. 7. The main allegation against the petitioner is that a searchwas conducted at the residence of the petitioner on 09.04.1986 and in https://hcservices.ecourts.gov.in/hcservices/ the bank lockers. At that time, it came to light that the petitionerhad entered into an agreement with the contractor for a total amountof Rs.6,63,250/-, but with the view to suppress the actual cost, shehad entered into another agreement with him for Rs.3,08,400/-. Boththe documents have been seized by the Income Tax authorities andbased on which, three complaints have been filed against thepetitioner. 8. This court is not able to understand as to why threedifferent complaints have been filed. According to the complainant,the act committed by the petitioner is only one relating topreparation of two sets of agreements. From that, the complainantmakes accusation against the petitioner under Section 276C of theIncome Tax Act. Though learned Special Public Prosecutor for IT Casessubmitted that subsequently, three income tax returns were filed bythe petitioner relating to the assessment years 1985-1986, 1986-1987and 1987-1988 and on that basis, three complaints have been filed andthis Court is unable to accept such contention. The complainant oughtto have filed only one complaint against the petitioner. 9. It is to be seen whether as per case of the complainant,prima facie charge can be framed for offence under Section 193 IPC,which is as follows: "Whoever intentionally gives false evidence in any stage of ajudicial proceeding, or fabricates false evidence for the purposeof being used in any stage of a judicial proceeding, shall bepunished with imprisonment of either description for a term whichmay extend to seven years, and shall also be liable to fine;and whoever intentionally gives or fabricates false evidence inany other case, shall be punished with imprisonment of eitherdescription for a term which may extent to three years, and shallalso be liable to fine" At the time of seizure of the documents, no proceedings was initiatedand further, it cannot be said that the documents were prepared bythe petitioner for using it for any judicial proceedings in future.Therefore, this Court is of the view that no charge can be framedagainst the petitioner under Section 193 IPC. 10. Now, it is to be seen whether any prima facie case for theoffence under Section 276C of the Income Tax Act is made out. It wascontended by the learned counsel for the petitioner that it cannot besaid that by mere preparation of two documents, the petitioner madewillful attempt to evade tax and the petitioner has not filed anyreturns on the basis of the documents. The contention of the learnedcounsel for the petitioner cannot be accepted in view of theexplanation given under Section 276C of the Income Tax Act, whichreads as follows: 10. Now, it is to be seen whether any prima facie case for theoffence under Section 276C of the Income Tax Act is made out. It wascontended by the learned counsel for the petitioner that it cannot besaid that by mere preparation of two documents, the petitioner madewillful attempt to evade tax and the petitioner has not filed anyreturns on the basis of the documents. The contention of the learnedcounsel for the petitioner cannot be accepted in view of theexplanation given under Section 276C of the Income Tax Act, whichreads as follows: "2.If a person wilfully attempts in any manner whatsoever toevade the payment of any tax, penalty or interest under this Act,he shall, without prejudice to any penalty that may be imposableon him under any other provision of this Act, be punishable withrigorous imprisonment for a term which shall not be less thanthree months but which may extend to three years and shall, in thediscretion of the court, also be liable to fine. Explanation: For the purposes of this section, a willful attemptto evade any tax, penalty or interest chargeable or imposableunder this Act or the payment thereof shall include a case whereany person; i)has in his possession or control any books of accountor other documents (being books of account or otherdocuments relevant to any proceeding under this Act)containing a false entry or statement; or ii)makes or causes to be made any false entry orstatement in such books of account or other documents; oriii)wilfully omits or causes to be omitted any relevantentry or statement in such books of account or otherdocuments; oriv)causes any other circumstances to exist which willhave the effect of enabling such person to evade any tax,penalty or interest chargeable or imposable under this Actor the payment thereof." As per the Explanation (i), if any person is in possession or controlof any document containing false entry or statement, it should betaken as wilful attempt made by such person to evade the tax. Hence,the decision cited by the learned counsel for the petitioner reportedin 2004 ITR Pg. 77 (N. Srinivasan Vs. Uma Rani) is not applicable tothe facts of the case. The allegation against the accused in thatcase is that the accused made a false statement during search, he didnot disclose owning of the locker thereby attempted to evade tax.Only on such allegation, it was held that Section 276C was not madeout. 11. The decision reported in 1991 L.W.(Crl.) Pg. 87 (A.Radhakrishnan Vs. ITO City Circle I(4) Madras) also is not applicableto the facts of this case. It is observed at the Paragraph No.9 ofthat order as follows: "The Explanation to the section does not in any way restrictor cut done the ambit of the expression "wilfully" occurring inS.276-C(1) of the Act. Therefore, mens rea is important, and if,there was any wilful attempt to evade tax, will necessarily https://hcservices.ecourts.gov.in/hcservices/ depend upon the facts of each case. Though the line ofdemarcation between 'preparation' and 'attempt' ma be thin,before a person can be prosecuted for an offence punishable underS.276-C(1) of the Act, there must be material available, that thestage of preparation had been crossed and attempt to evadewilfully, payment of tax, was the only conclusion possible, onfacts." Therefore, the prosecution case was that the petitioner in that case,who was legally by express provisions of law to state the truth andmake a declaration regarding the market value of the property havingfailed to do so, has reference to the alleged declaration of thepetitioner in Form 37-G prescribed under Rule 48-G of the Income TaxRules. https://hcservices.ecourts.gov.in/hcservices/ depend upon the facts of each case. Though the line ofdemarcation between 'preparation' and 'attempt' ma be thin,before a person can be prosecuted for an offence punishable underS.276-C(1) of the Act, there must be material available, that thestage of preparation had been crossed and attempt to evadewilfully, payment of tax, was the only conclusion possible, onfacts." Therefore, the prosecution case was that the petitioner in that case,who was legally by express provisions of law to state the truth andmake a declaration regarding the market value of the property havingfailed to do so, has reference to the alleged declaration of thepetitioner in Form 37-G prescribed under Rule 48-G of the Income TaxRules. 12. In this particular case, there is a specific allegation thatthe petitioner / accused was in possession of two documents ofagreements for the same purpose with different values. As alreadyobserved and as per the explanation under Section 276C of the IncomeTax Act, prima facie material is available against the petitioner toframe charge under Section 276C of the Income Tax Act. 13. Therefore, for the above said reasons, the first complaintfiled by the prosecution in E.O.C.C.No. 180 of 1988 is maintainable,but the proceedings in E.O.C.C.Nos. 1645 and 1646 of 1989 have to bequashed, since the complaint is for the same offence mentioned inE.O.C.C. No. 180 of 1988. 14. In the net result, with the above observation, the CriminalRevision Petition No. 466 of 2010 is dismissed and the other twoCriminal Revision Petition Nos. 465 and 467 of 2010 are allowed andthe proceedings in E.O.C.C.Nos. 1645 and 1646 of 1989 are quashed.Consequently, connected miscellaneous petitions are closed. 15. The complaints were filed in the year 1988 and 1989.Petitions seeking discharge were filed by the accused in the year1999 and they were pending for more than 10 years for disposal. 13Presiding Officers during the said period did not dispose thosepetitions. The present Presiding Officer Mr. P. Velmurugan disposedthem by passing orders within four months from the date of hisassuming charge, which this Court appreciates. sd/-Asst.Registrar/True copy/ ar https://hcservices.ecourts.gov.in/hcservices/ To 1. The Additional Chief Metropolitan Magistrate, (E.O-I) Egmore, Chennai. 2. The Income Tax Officer, Film Ward III, Shafi Ahamed Road, Chennai-600 006. Film Ward III, Shafi Ahamed Road, Chennai-600 006. 3. The Special Public Prosecutor for IT Cases, High Court, Madras. High Court, Madras. + 3 c.cs. to Mr. P. Ramesh Kumar, Advocate. SR.Nos.48270 to 48272. Crl.R.C.Nos.465, 466 and 467 of 2010RK (CO)GSK 19.07.2010.