ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 35(1) (DEEPAK KUMAR) vs. STATE & ANR

[1]

$~34 * IN THE HIGH COURT OF DELHI AT NEW DELHI + CRL.M.C. 4186/2014 ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 35(1) (DEEPAK KUMAR)

..... Petitioner New Delhi Through: Mr. Sanjay Kumar and Ms. Easha Kadian, Advocates.

versus

STATE (NCT) OF DELHI

..... Respondent No.1

NARESH KUMAR VERMA A-19, ANAND VIHAR, DELHI-110092

..... Respondent No.2

Through: Mr. Dhruv Rajput, Advocate for R-2. CORAM: HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV

O R D E R %

09.09.2022 1. Heard learned counsel appearing on behalf of the parties. 2. This petition under Section 482 of the Code of Criminal Procedure, 1973 (in short, „Cr.P.C.‟) is directed against the order dated 26.10.2013, passed by the learned Additional Session Judge-02, Central Delhi in Crl.Rev.P. 88/2013, whereby, the order dated 22.01.2013 passed by the learned ACMM (Spl. Acts), Central Delhi in C.C.No.121/4 has been affirmed discharging the respondents. 3. The facts of the case show that the petitioner/Department filed a complaint under Section 276 C (1)/277 of the Income Tax Act, 1961(in short, „the Act‟) for the assessment year 2004-05 against respondent No.2.

[2]

After recording the evidence of the complainants/witnesses, the learned ACMM vide order dated 22.01.2013 did not find any prima facie evidence against the respondent No.2 to show any wilful attempt to evade tax, penalty or interest and accordingly, the respondent No.2 was discharged. The petitioner/Department filed a revision before the court of Additional Sessions Judge, who, vide impugned order dated 26.10.2013, affirmed the view taken by the ACMM and has dismissed the revision; therefore, the petitioner/Department is in the instant petition under Section 482 of the Cr.P.C. 4. Learned counsel appearing on behalf of the petitioner/Department submits that both the courts have gravely erred in not considering the true interpretation of Section 278E of the Act. According to him, the court concerned had to presume the culpable mental state of the accused, and it is for the accused to rebut the presumption. The court, at the stage of framing of charges, is not empowered to assume the fact that there was no culpable mental state unless the proper rebuttal is discharged by way of adducing evidence by the accused. According to him, in view of the scheme of the Income Tax Act, the court below has erred in discharging respondent No.2, and, therefore, appropriate interference is called for. The learned counsel has placed reliance on the following decisions: (i) Prakash Nath Khanna and Anr. v. Commissioner of Income- Tax and Anr.1, (ii) Commissioner of Income-Tax v. HCIL Kalindee Arsspl2, (iii) N. K. Jain v. Union of India and Ors.3,

1 2004 266 ITR 1 SC 2 2013 37 taxmann.com 347 (Delhi) 3 2002 254 ITR 388 (Del)

[3]

(iv) V. P. Punj v. Assistant Commissioner of Income-Tax and Anr.4 and (v) Asstt. Commissioner of Income Tax v. Nilofar Currimbhoy5

4 2022 253 ITR 369 (Del) 5 2013(3) AD (Delhi)

[4]

Section 10(B) of the Act to respondent No.2 with respect to the sale made to the M/s. ASCOM (India) Pvt. Ltd. in respect of which a bank certificate of realisation was submitted. It is, thereafter, submitted that the penalty was already deposited; however, the effect of relief granted to respondent No.2 by CIT (Appeal) under Section 154 of the Act, and confirmed by the ITAT was yet to be given to him, reducing the aforesaid amount of penalty. He thus submitted that under the facts of the present case, there arises no justification for prosecution under Section 276C (1) /277 of the Act. 6. In rejoinder, learned counsel appearing on behalf of the petitioner/Department submits that the relief granted to respondent No.2 was only in-part, i.e. with respect to foreign exchange fluctuation and business income; however, the amount of penalty has not been interfered with by any of the authority. 7. In view of the above facts, it is to be considered, whether the assessee is entitled for deductions under Section 10B of the Act on the basis of Deemed Export and secondly, whether the assessee/accused deliberately submitted or made any false statement of income and verified the same knowingly. 8. Having considered the submissions made by the parties, it is seen that the learned ACMM vide order dated 22.01.2013 has considered the material available on record. It has been found that respondent No.2 had relied upon the services of an expert Chartered Accountant while claiming deductions and also complied with all relevant provisions as even accepted by the prosecution witnesses. Respondent No.2 had brought to the notice of the Department all the facts and completed all the formalities towards the claim

[5]

of such direction. It has also been found that records as well as Export/ Import Policy and the concept of such deemed export/import policy was prevalent w.e.f. 01.04.2002 to 31.03.2007, and the Foreign Trade Policy of the Government of India was applicable to the relevant period. Learned ACMM has noted that none of the prosecution witnesses denied existence of the policy of the Government. The learned court thereafter noted that the action of respondent No.2 could not be considered malicious or wilful in default at all. It has also been found that there was no deliberate attempt to suppress any fact, nor he made any concealment of income while submitting the Return. The Department also did not issue any show-cause notice to respondent No.2, while denying his claim under Section 10B of the Act, nor was any opportunity granted to him to explain the reason despite the respondent No.2 filing all documents in that respect. It is under the aforesaid facts and circumstances that the learned ACMM was of the considered view that no prima facie evidence on record to show any wilful attempt to evade tax, penalty or interest on behalf of respondent No.2, was found. 9. The learned revisional court has considered the submissions made by the petitioner/ Department and has found in paragraph No.8 of the impugned order that the plea considered in the conduct of respondent No.2 to claim the deduction in the wake of the Export/ Import Policy of Government of India, which permitted the transaction between EOUs even in Indian currency termed as „deemed export‟ was duly followed by submission of all requisite certificates and documents in that respect. The fact of payment of penalty, after his claim was rejected, has also been noted therein. It has been found by the revisional court that respondent No.2 was liable to be prosecuted

[6]

criminally only in case of deliberate and wilful attempt to evade tax, penalty or interest chargeable or imposable under the Act. The learned Additional Session Judge, did not find any infirmity with the order passed by the learned ACMM, therefore, revision has been dismissed. 10. Having perused both the orders passed by the ACMM and the revisional court, this court does not find any justification to interfere with the limited jurisdiction under Section 482 of Cr.P.C. The material available on record, which had already been considered by both the courts, clearly shows that there was no intention to evade the tax. The proceedings with respect to penalty were taken up to the higher courts, and finally, the same was deposited, after appropriate recourse was taken by respondent No.2; and the relief with respect to the benefit of Section 10B of the Act, as stated above, has already attained finality by the order dated 29.02.2012 passed by ITAT dismissing revision of the petitioner/Department. 11. The learned revisional court, while affirming the order of discharge passed by the learned MM, has held that the accused can rebut the presumption only by leading evidence once the charges are framed, however, the trial court at the stage of framing of charge is under an obligation to take into consideration the unrebutted evidence of the prosecution witnesses. It has also been held that unless it is found that the learned MM has committed grave error of law, the revisional court should not interfere into the view taken by the court below. Paragraph No.8 of the order dated 26.10.2013 is being reproduced as under: “However in the instant matter, pre-charge evidence has already been led and the documentary evidence concerning the case is already on record. The plea concerning the conduct of respondent to claim the

[7]

deduction in the wake of export/import policy of Government of India which permits the transaction between EOUs even in Indian currency termed as deemed export followed by submission of all the requisite certificates and documents in this respect and coupled with payment of penalty after his claim was rejected by the Income Tax department, leaves no doubt with the court with respect to the default on part of the respondent not being willful or attempt to suppress the true facts to evade tax and merely for that reason the case is not required to be stretched any further for the same outcome in future. The assessee is liable to be prosecuted criminally only in the case of deliberate and willful attempt to evade tax, penalty or interest chargeable or imposable under the Act, which cannot be said to be a case here and I do not find any infirmity or illegality in the order of Ld. Trial Court in accepting the plea with respect to the action of accused/respondent not malicious or willful default. Accordingly, present revision petition is dismissed. TCR alongwith copy of order be sent back to the Trial Court. Revision file be consigned to record room.”

[8]

no case is made out to proceed against the respondent, therefore, this court is not inclined to substitute its own opinion in place of the opinion expressed by the court below. 13. The decision of the Hon‟ble Supreme Court relied upon by the learned counsel appearing on behalf of the petitioner in the case of Prakash Nath Khanna (supra) is concerned, the same relates to an appeal under Section 276CC of the Act. In the context of the issue involved therein, the Hon‟ble Supreme Court has held that there is a statutory presumption prescribed in Section 278E and the court has to presume the existence of culpable mental state and absence of such mental state can be pleaded by an accused as a defence in respect of the act charged as an offence in the prosecution. The position of law expounded therein is not disputed. But in the instant case, the initial burden to show a prima facie case has not been discharged by the petitioner. So far as another decision of this court in the case of V.P. Punj (supra) is concerned, the same relates to a case where the cognizance was taken by the concerned court and revision was dismissed, therefore, this court has held that the high court should not interfere with the order passed by the trial court at the initial stage of framing the charges merely on hypothesis/imagination and far-fetched reasons which in law amount to interdicting the trial against the accused persons. So far as the decision in the case of N. K. Jain (supra) of this court is concerned, the same also relates to dismissal of the application of the accused therein for his discharge and the Hon‟ble Supreme Court did not interfere into the same. So far as the decision in the case of Assistant Commissioner of Income Tax (supra) is concerned, in that case undisputedly the assessee did not file

[9]

Return for the assessment year 1994-95 within the prescribed period and did not respond to the communications of the Department. In the instant case, the facts are different. Certain exemptions were claimed and on interpretation of the applicable policy as per Department, the assessee was not entitled for the same. So far as the last decision in the case of Asst. Commissioner of Income Tax (supra) of this court is concerned, the same relates to appeal with respect to deletion of the penalty under Section 271(1)(c) of the Act. The same is distinguishable on facts. 14. In view of the aforesaid analysis, this court does not find any substance in the instant petition and the same is, therefore, dismissed.

PURUSHAINDRA KUMAR KAURAV, J SEPTEMBER 9, 2022/p

Click here to check corrigendum, if any