M K MIRANI INCOME TAX OFFICER vs. M/S RAVINDRA INDUSTIRIES

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CR.A/1122/1997HC GujaratGJHC24021590199705 September 2012Author: HONOURABLE MR. JUSTICE Z.K.SAIYED6 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court considered the submissions and perused the record. It acknowledged that the prosecution was launched under Section 276C read with Section 277 of the Income-tax Act. The Court noted that while Section 276C might not have been in force in April 1975, Section 277 was applicable for the assessment year under consideration. The Court found that the learned Magistrate had not considered this aspect of the matter while deciding the case. Consequently, the appeal was partly allowed. The impugned judgment and order of acquittal were quashed and set aside. The case was remanded to the trial court with a direction to decide it on merits and in accordance with law within six months from the date of receipt of the order. No specific issue was left undecided, but the matter was sent back for a fresh decision on merits.

What were the facts?

The appellant, M K Mirani, Income Tax Officer, challenged the acquittal order dated January 31, 1997, passed by the Additional Chief Metropolitan Magistrate, Ahmedabad, in Criminal Case No. 80 of 1986. The case was registered against M/s Ravindra Industries & 3 others for offences under Sections 276C and 277 of the Income-tax Act and Section 181 of the Indian Penal Code. The prosecution alleged that the accused filed an income-tax return for assessment year 1975-76 on April 25, 1975, showing a lower profit and failing to disclose a significant balance sheet amount, thereby attempting to avoid tax, penalty, and interest. Investigation, arrest, and charge-sheet followed. The accused pleaded not guilty. After trial, the Magistrate acquitted the respondents.

What were the issues?

1. Whether the trial court erred in its appreciation of the evidence, particularly Exhibits 34 and 35, which allegedly showed verification of false accounts by respondent No. 2, and whether the Magistrate's observations were legally proper, thereby warranting setting aside the acquittal order? (Mixed law and fact, concerning Sections 276C and 277 of the Income-tax Act and Section 181 of the IPC). Assessee's Contention: The prosecution was launched under Section 276C read with Section 277 of the Income-tax Act. Even if Section 276C was not in force in April 1975, Section 277 was applicable. The trial court failed to appreciate the evidence, specifically Exhibits 34 and 35, indicating false accounts verified by respondent No. 2. The Magistrate's observations were improper. Revenue's Contention: The offence occurred prior to January 25, 1975. Section 276C of the Income-tax Act was amended on October 1, 1975, and no retrospective effect was given. Therefore, no offence was made out under Section 276C. The Magistrate rightly concluded that the respondents committed no wrong.

Which sections of the Income-tax Act were involved?

Section 276C,Section 277,Section 181

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
CR.A/1122/1997 1/6 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD CRIMINAL APPEAL No. 1122 of 1997 For Approval and Signature: HONOURABLE MR.JUSTICE Z.K.SAIYED ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= M K MIRANI INCOME TAX OFFICER - Appellant(s) Versus M/S RAVINDRA INDUSTIRIES & 3 - Opponent(s) ========================================================= Appearance : MRS MAUNA M BHATT for Appellant(s) : 1,MR BB NAIK for Appellant(s) : 1, MR RC JANI for Opponent(s) : 1 - 3. MS JIRGA JHAVERI, APP for Opponent(s) : 4, ========================================================= CORAM : HONOURABLE MR.JUSTICE Z.K.SAIYED Date : 05/09/2012

ORAL JUDGMENT

1.

By way of present appeal the appellant has  challenged  the   judgment  and  order  of acquittal   dated   31.1.1997   passed   by   the

CR.A/1122/1997 2/6 learned   Additional   Chief   Metropolitan Magistrate,   Ahmedabad,   in   Criminal   Case No.80 of 1986. The said case was registered against   the   respondents–original   accused for the offences punishable under Sections 276­C   and   277   of   the   Income­tax   Act   and under Section 181 of the Indian Penal Code.

2.

According   to   the   prosecution   case,   the accused persons filed income­tax return on 25.4.1975 for the assessment year 1975­76, in   which   clear   profit  of  Rs.24,247/­   was shown  instead  of  Rs.37,937/­   and  did   not show difference of balance­sheet amount of Rs.1,11,872/­   and   thereby   the   accused persons   tried   to   avoid   tax,   penalty   and interest on the amount of Rs.1,25,562/­ and committed offence punishable under Section 276­C   of   the   Income­tax   Act.   Hence   the complaint came to be lodged.

3.

Thereafter,  investigation   was   carried   out and   statements   of   several   witnesses   were recorded.

During

the course

of investigation,

accused

persons

were arrested and, ultimately, charge­sheet came to be filed against them in the Court of learned Metropolitan Magistrate Court.

CR.A/1122/1997 3/6

4.

Thereafter,  charge  came  to  be  framed   and explained to the accused persons, to which the accused persons pleaded not guilty and claimed to be tried.

5.

In order to bring home the charges against the   accused   persons,   prosecution   has examined   several   witnesses   and   also produced documentary evidence.

6.

Thereafter, after filing closing pursis by the prosecution, further statements of the accused  persons  under  Section  313  of   the Code   of   Criminal   Procedure,   1973   were recorded. The accused persons have denied the case of the prosecution and submitted that a false case is filed against them.

7.

At   the   conclusion   of   trial   and   after appreciating   the   oral   as   well   as documentary

evidence,

the learned Magistrate   vide   impugned   Judgment   and order, acquitted the respondents – accused.

8.

Being aggrieved by and dissatisfied with the  said   judgment  and  order  of  acquittal dated   31.1.1997   passed   by   the   learned Additional   Chief   Metropolitan   Magistrate, CR.A/1122/1997 4/6 the   appellant   has   preferred   the   present appeal before this Court.

9.

Heard Ms.Mauna Bhatt, learned counsel for the   appellant.   Notice   is   served   to   the other   side.   Mr.R.C.Jani,   learned   counsel has appeared for respondent Nos.1 to 3 and Ms.Jirga Jhaveri, learned APP has appeared for respondent No.4 – State.

10.

Ms.Mauna  Bhatt,  learned   counsel  for   the appellant   has   contended   that   the   trial Court has erred in appreciating that, the prosecution was launched under Section 276­ C read with Section 277 of the Income Tax Act. Assuming that Section 276­C was not in force in April, 1975, but Section 277 was there   for   the   year   under   consideration. Language   of   Section   277   is   clear   and unambiguous.   She   has   contended   that   the trial Court has erred in not appreciating the   evidence   available   on   record,   more particularly, Ex.34 and 35, which goes to show that, the false accounts are verified by   the   respondent   No.

2.

Lastly,   she   has read observations of the learned Magistrate and contended that the observations made by the  learned  Magistrate   are  not   proper  in the eye of law and therefore, judgment and

CR.A/1122/1997 5/6 order of the learned Judge is required to be set aside.

11.

Mr.R.C.Jani, learned counsel appearing for the   respondent   Nos.1   to   3   has   contended that   the   offence   occurred   prior   to 25.1.1975. Section 276­C of the Income Tax Act was amended on 1.10.1975, therefore no retrospective  effect   is  given.    Hence  no offence is made out under Section 276­C of the Income Tax Act. He has contended that the   learned   Magistrate   has   rightly considered   that   the   respondents   have   not committed   any   wrong,   as   alleged   by   the Income Tax Department.

12.

I have perused the record and considered the submissions made by the parties. It is true   that   prosecution   was   launched   under Section 276­C read with Section 277 of the Income   tax  Act.  Though  Section   276­C  was not   in   force   in   the   year   April   1975, Section 277 was there for the year under consideration.   It   is,   therefore,   apparent that,   the   learned   Magistrate   has   not considered   the  said  aspect  of  the  matter while deciding the case.

13.

In   the   result,   this  Appeal   is   partly

CR.A/1122/1997 6/6 allowed.   The   impugned   judgment   and   order dated   31.1.1997   passed   by   the   learned Additional   Chief   Metropolitan   Magistrate, acquitting   the   respondents,   is   hereby quashed and set aside. The case is remanded to   the   trial   Court   with   a   direction   to decide the same on merits and in accordance with   law.   The   learned   Chief   Metropolitan Magistrate, Ahmedabad is directed to notify the said Criminal Case before the concerned court with a direction to decide the case within a period of six months from the date of receipt of the writ of this order. R & P, if received, be sent back to the trial Court, forthwith. (Z.K. SAIYED, J.) kks

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