PEROORKADA CO-OPERATIVE BANK LIMITED vs. THE INCOME TAX OFFICER
What did the High Court hold?
The High Court set aside the impugned order dated April 5, 2024, and allowed the petitioner's application to cross-examine prosecution witnesses PW1 and PW2 and to adduce defence evidence. The Court acknowledged that while the failure to cross-examine could be attributed to the petitioner, the omission could lead to prejudice and delay. Therefore, as a last chance, an opportunity was granted. The Court directed that the cross-examination be completed within a specific period to avoid further delay. The petitioner was ordered to pay a cost of Rs. 2,500/- to the Kerala Legal Services Authority by June 19, 2024, and file the receipt before the Trial Court. PW1 and PW2 are to be made available for cross-examination between July 22, 2024, and July 29, 2024. The petitioner will also bear the cost of procuring the witnesses again. If the petitioner fails to cross-examine within the stipulated period, the Chief Judicial Magistrate is free to proceed with the case. The Court did not explicitly leave any issue undecided.
What were the facts?
The petitioner, P.M. Abdul Nazeer, is the accused in C.C. No. 1128 of 2017 before the Additional Chief Judicial Magistrate Court (Economic Offences), Ernakulam, facing prosecution under Sections 276C and 276CC of the Income Tax Act, 1961. After the trial commenced, the petitioner's counsel failed to cross-examine prosecution witnesses PW1 and PW2 when they were examined on January 10, 2024, and February 1, 2024, respectively. Subsequently, the petitioner filed an application under Section 311 of the Code of Criminal Procedure, 1973 (Cr.P.C.) seeking to reopen evidence to cross-examine these witnesses. This application, C.M.P. No. 1639/2024, was dismissed by the Additional Chief Judicial Magistrate by an order dated April 5, 2024. The petitioner has challenged this dismissal by filing the present Original Petition (Criminal).
What were the issues?
1. Whether the Additional Chief Judicial Magistrate erred in dismissing the petitioner's application under Section 311 Cr.P.C. to reopen evidence for cross-examination of prosecution witnesses PW1 and PW2, and to adduce defence evidence, considering the circumstances of the case? Assessee's Contention: The petitioner argued that the failure to cross-examine the witnesses was an omission that could lead to prejudice and potentially delay the proceedings in the long run. An opportunity to cross-examine was essential for a fair trial. Revenue's Contention: The respondent (State of Kerala and Assistant Commissioner of Income Tax) contended that the application was vague, incomplete, and an attempt to delay the proceedings. They argued that the relevancy of the evidence sought to be adduced was not ascertainable and not specifically stated in the application.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT Petitioner is the accused in C.C.No.1128/2017 on the files of the Additional Chief Judicial Magistrate Court (Economic Offences) Ernakulam. He is being prosecuted for the offences under Section 276C and 276 CC of the Income Tax Act, 1961. After the trial commenced, when PW1 was examined on 10.01.2024, the counsel appearing for the accused did not cross-examine the witness. Subsequently, when PW2 was examined on 01.02.2024, again, the witness was not cross-examined by the defence. The learned Chief Judicial Magistrate thereafter, proceeded with the trial. Later an application under Section 311 Cr.P.C, seeking to reopen the evidence to enable the petitioner to cross-examine PW1 and PW2. The said application, filed as C.M.P.No.1639/2024, has been dismissed by the impugned order dated 05.04.2024. 2. I have heard Sri. M.P.Shameem Ahamed, the learned counsel for the petitioner as well as Sri. Jose Joseph, the learned Standing Counsel for the Income Tax Department.
The learned Chief Judicial Magistrate has, by an elaborate order, dismissed the application under Section 311 Cr.P.C, after observing that the application is vague and incomplete and also that it is an attempt to delay the proceedings. The learned Chief Judicial Magistrate also held that the relevancy of the evidence sought to be adduced is not at all ascertainable, nor is it specifically stated in the application.
Though this Court cannot find any infirmity in the reasons stated in the impugned order, considering the totality of the circumstances, it is essential that an opportunity be granted to the petitioner to cross- examine the witnesses and to adduce his evidence. During the trial, none of the witnesses were cross-examined. Though the failure can be attributed to the petitioner himself, the omission to cross-examine the prosecution witnesses can lead to prejudice, which in turn may delay or drag the proceedings in the ultimate analysis. Therefore, an opportunity ought to be granted, as a last chance. To avoid a possible delay due to a one sided prosecution, this Court is of the view that the application of the petitioner to recall the witnesses for cross-examination and to adduce defence evidence be allowed on terms.
Since the respondent had vehemently contended that the attempt of the petitioner is only to delay the matter, it is appropriate to fix a specific period within which the cross examination is completed. Having regard to the circumstances, the prosecution witnesses PW1 and PW2 can be made available for cross examination on a particular date and the cross examination be completed by the petitioner without delay.
In view of the above, the impugned order dated 05.04.2024 is set aside, and the application of the petitioner for cross examining the prosecution witnesses PW1 and PW2 and also to adduce the defence evidence, if any, is allowed on payment of a cost of Rs.2,500/- on or before 19.06.2024, to the Kerala Legal Services Authority and the receipt shall be filed before the Trial Court. PW1 and PW2 shall be cross-examined between 22.07.2024 and 29.07.2024. In case, petitioner fails to cross examine the witnesses within the above stipulated period, the learned Chief Judicial Magistrate will be free to proceed with the case. Needless to mention that the cost for procuring the witnesses once again, shall also be borne by the petitioner. Original petition is disposed of as above. BECHU KURIAN THOMAS JUDGE AMV/05/06/2024
Appendix — schedule of exhibits
More judgments on Section 276C
- Joydeep Mukherjee, Presently Residing at Usa vs DCIT, Intl Taxation Circle 1(2), Bangalore…ITA 2017/BANG/2025[2018-19]Status: Disposed23 Feb 2026AY 2018-19
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- DCIT(It)-3(2)(2), Mumbai vs Murex Southeast Asia Private Limited…ITA 1453/MUM/2025[2014-15]Status: Disposed30 Jun 2025AY 2014-15
- Deputy Commissioner of Income Tax Central… vs M/S. Marico Industries Ltd, MumbaiITSSA 27/MUM/2003[Block Period 1988-1997]Status: Disposed25 Oct 2023
- M/S. Marico Industries Ltd, Mumbai vs Deputy Commissioner of Income Tax, Central…ITSSA 661/MUM/2002[1988-97]Status: Disposed25 Oct 2023AY 1988-97
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