WARIS ALI EBRAHIM KHAN vs. THE INCOME TAX DEPARTMENT AND ANR

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WP/5670/2024HC BombayHCBM01038508202406 January 2025Author: HON'BLE SHRI JUSTICE R. N. LADDHA4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that while a Magistrate is not required to record detailed reasons for issuing process, the order must demonstrate an application of mind. Issuing process as a routine formality without cautiously examining the material and appreciating statutory provisions can lead to summoning innocent individuals. The Magistrate must carefully exercise judicial discretion, scrutinize the material, and satisfy themselves that sufficient grounds exist to summon the accused, recording this opinion in the order. Since the impugned order failed to reflect such application of mind, it was quashed and set aside. However, to avoid consequences for the complainant due to the Magistrate's failure, the Magistrate was directed to pass a fresh order on its own merits in accordance with the law. The criminal writ petition was disposed of accordingly.

What were the facts?

The petitioner, Waris Ali Ebrahim Khan, challenged an order dated August 2, 2018, passed by the Additional Chief Metropolitan Magistrate, 38th Court, Ballard Pier, Mumbai. This order, in CC No.328/SW/18, had issued process against the petitioner for an alleged offence punishable under Section 276CC of the Income Tax Act, 1961. The petitioner contended that the Magistrate's order lacked application of mind and was unreasonable. The Income Tax Department was respondent No.1, and the State of Maharashtra was respondent No.2. The High Court of Judicature at Bombay heard arguments from the petitioner's counsel and the Special Public Prosecutor for respondent No.1.

What were the issues?

1. Whether the order issuing process against the petitioner, dated August 2, 2018, passed by the Additional Chief Metropolitan Magistrate, demonstrates sufficient application of mind as required by law, particularly in relation to Section 276CC of the Income Tax Act, 1961? Assessee's Contentions: The petitioner argued that the impugned order was unreasonable and did not reflect any application of mind by the Magistrate. The petitioner relied on the Supreme Court decision in Lalankumar Singh Vs State of Maharashtra, 2022 SCC OnLine 1383, which emphasizes the need for careful scrutiny and judicial discretion by the Magistrate before issuing process. Revenue's Contentions: The judgment does not record specific arguments made by the revenue (Income Tax Department) in response to the petitioner's challenge regarding the application of mind.

Which sections of the Income-tax Act were involved?

Section 276CC

AI-generated summary — verify with the full judgment below

sg 40.wp5670-24.docx IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION Criminal Writ Petition No.5670 of 2024 Waris Ali Ebrahim Khan Adult Indian Inhabitant, Aged about 37 years, Permanent resident of L-1-A, 502 Oakland Park, Off. New Link Road, Andheri (W), Mumbai-69 … Petitioner versus

1.

The Income Tax Department, through Pankaj Eknath Nigam, an officer attached to Income Tax Department, having office situated at Room No.406, C-12, 4th Floor, Tratakshakar Bhawan, BKC, Bandra (E), Mumbai 400 051

2.

The State of Maharashtra, to be served Through Public Prosecutor, High Court (A.S.), Mumbai … Respondents ---- Mr Ashok M Saraogi, for the petitioner. SPP Shabnam Latiwala, for respondent No.

1.

Mr MG Patil, APP, for respondent No.2/ State. ---- Coram: R.N. Laddha, J. Date: 6 January 2025. __________________________________________________ 6 January 2025 SMITA JOHNSON GONSALVES JOHNSON GONSALVES Date: 2025.01.07 00:00:30 +0530

sg 40.wp5670-24.docx P.C.: . Heard Mr Ashok Saraogi, the learned Counsel for the petitioner and Ms Shabnam Latiwala, the learned Special Public Prosecutor representing respondent No.1/ Income Tax Department.

2.

By this petition, the petitioner seeks to challenge the order dated 2 August 2018 (the impugned order passed by the Additional Chief Metropolitan Magistrate, 38th Court, Ballard Pier, Mumbai, in CC No.328/SW/18), whereby the learned Magistrate issued the process against the petitioner. The order reads thus: “ORDER BELOW EXHIBIT-1 Perused the complaint and documents. Heard the learned Advocate for the complainant. The complainant has made out his prima facie case to issue process, hence process be issued against the accused for an offence punishable U/s. 276 CC of the Income Tax Act, 1961.”

3.

A bare perusal of the impugned order shows that it is unreasonable and does not demonstrate any application of mind. __________________________________________________ 6 January 2025

sg 40.wp5670-24.docx

4.

It is a settled position in law that the Magistrate is not required to record detailed reasons while passing an order of issuing the process. However, such orders are not an empty formality, and doing so as a matter of routine without cautiously examining the material available on record, and appreciating the statutory provisions, may result in putting the criminal law in motion and summoning an innocent individual to stand trial. Before issuing a process, the Magistrate must carefully exercise his judicial discretion and scrutinise the material on record. He must satisfy and determine whether sufficient grounds exist to summon the accused to stand trial. Once he forms such an opinion, he must record it in his order. When an issue process order fails to reflect such application of mind, it is liable to be set aside. A reference in this regard may be made to the decision of the Hon'ble Supreme Court in the process dated 2 August 2018 passed in CC No.328/SW/18 by the learned Additional Chief Metropolitan Magistrate, 38th Court, Ballard Pier, Mumbai, is quashed and set aside. However, at the same time, it must be considered that the __________________________________________________ 6 January 2025

sg 40.wp5670-24.docx complainant should not be held responsible or have to endure any consequences due to the Magistrate's failure in fulfilling his duty. The learned Magistrate is, therefore, directed to pass an order afresh on its own merits in accordance with the law.

6.

The criminal writ petition stands disposed of accordingly. (R.N. Laddha, J.) __________________________________________________ 6 January 2025

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