Commissioner of Income Tax [TDS] vs. M/s Madhucon sino Hydro.,

IN THE HIGH COURT OF JHARKHAND AT RANCHI

Criminal Revision No. 526 of 2014

Munna Chatterjee, D/o Sri Amal Kumar Chatterjee, resident of 41/2-3, Taldanga Housing Colony, P.O.- Sarisapahari, P.S.- Chirkunda, District- Dhanbad … … … Petitioner

-Versus-

For the Petitioner

: Ms. Jasvinder Mazumdar, Adv.

: Mr. Rohan Mazumdar, Adv.

For the State

: Mr. Shailesh Kumar, A.P.P.

For the Opposite Party No.2 : Mr. Rahul Lamba, Adv.

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Through Video Conferencing

--- 09/18.08.2020

of default of payment of fine, she has been further sentenced to undergo rigorous imprisonment for three months. 5. Learned counsel appearing for the petitioner submitted that this criminal revision application relates to the Assessment Year 2003-2004. She submitted that the appeal was decided by the learned appellate court on 16.05.2014 which was numbered as Criminal Appeal No.212 of 2013. Arguments of the petitioner 6. The prosecution case, in brief, is that the petitioner, Mrs. Munna Chatterjee, being income tax assessee, had filed Income Tax Return on 28.07.2003, for the Assessment Year 2003-2004, along with TDS certificate purported to be issued by L.I.C. and other documents before the Income Tax Department, Dhanbad by putting signature on the verification portion of the said return and thereby claimed refund of Rs.40,437/- on account of excess deduction of tax at source and repayment of housing loan and others. It was alleged that in course of inquiry from L.I.C., Chirkunda Branch and Bank of India, Chirkunda Branch, it was found that the claim of refund of Rs.40,437/- was not genuine as T.D.S. Certificate was not issued by the office of L.I.C. and the Housing Loan account as shown by the petitioner in her return, was non- existent. A show cause was issued to the petitioner asking her to explain the discrepancies in the return and to submit an explanation as to why a prosecution under Section 277 of Income Tax Act be not initiated against her. Pursuant to the show cause, the petitioner submitted explanation under her signature pleading complete ignorance about the documents attached with the return, however admitting the signature over verification portion and other documents as well, which is not excusable in the eye of law. It was alleged that the petitioner had willfully furnished false particulars in verification of the return, knowing it either to be false or at

least, having reason to believe the same, and thus, held herself liable for the offence punishable under Section 277 of Income Tax Act. 7. The learned counsel for the petitioner further submitted that the main point involved in the present case is that the learned courts below have failed to consider that the petitioner had put her signature on blank income tax return forms and the petitioner had no intention to commit any crime. It is submitted that the allegations are at best a case of avoidance of tax and there is no pecuniary benefit to the petitioner as the refund has not been made to the petitioner. 8. The learned counsel for the petitioner referring to the evidences of the prosecution witnesses submitted that PW-1 Balram Kumar Mandal, in his cross examination, admitted that he has no personal acquaintance with the facts and circumstances of the case and the sanctioning authority had not signed in his presence. PW-2, in his cross-examination, admitted that he does not know the history of the case. PW-3 Sanjit Kumar Mitra, in his cross examination in Para-11, stated that the petitioner did not put her signature over any documents in his presence and in Para-12, he admitted that he does not identify the petitioner. Exhibits-4, 4/1 and 4/2 are typed copies which mean that these were not filled up by the petitioner and the petitioner had signed the unfilled form of the return and she had no knowledge that the said document can be misused. Para 13 of the judgement clearly states that she had signed unfilled form of the return and had no knowledge that the said document can be misused. 9. The learned counsel also submits that culpable mental state includes knowledge of fact, intention or motive or reason to believe a fact but in this case as the petitioner in a bonafide

manner signed the unfilled form so culpable mental state of the petitioner has not been proved by the prosecution. At best, the case is that the petitioner was avoiding to pay the tax and no pecuniary benefit has been gained by the petitioner as refund has not be made to the petitioner. 10. The learned counsel for the petitioner further advanced her arguments that the learned courts below have failed to take into consideration that the petitioner had signed on some blank forms which were misused. She also submitted that the essential elements for establishing the criminal case are wholly lacking on record as there is no finding regarding mens-rea against the petitioner and accordingly, there was no criminal intent on the part of the petitioner. She also submitted that sanctioning authority has not been examined as a witness by the prosecution and on this account as well, the impugned orders cannot be sustained. She referred to a judgment passed by the Hon’ble Supreme Court reported in 1999 (5) SCC 241 (Prem Dass –versus- Income Tax Officer), Paragraph-8 and submitted that in view of the law laid down by the Hon’ble Supreme Court, no case is made out against the petitioner and the impugned judgments are fit to be set aside. Arguments of the opposite party – Income Tax Department 11. Mr. Rahul Lamba, the learned counsel appearing on behalf of the O.P. No.2, on the other hand, referred to Section 278E of the Income Tax Act and submitted that for offence committed under the Income Tax Act, the statute prescribes a presumption to culpable mental state. Accordingly, there was a presumption against the petitioner so far as mens-rea is concerned and the petitioner has not made any attempt to dislodge the presumption and admittedly, she has not led any evidence. Learned counsel further submitted that though the presumption is required to be rebutted by preponderance of probability, but no such attempt was made by the petitioner

and even in the statements made under Section 313 of the Cr.P.C., no explanation of any kind has been given by the petitioner in her defence. Learned counsel submitted that there is no dispute that the sanction for prosecution was granted and P.W.-1 has proved the sanction order which was exhibited without any objection from the side of the defence. He also submitted that no case has been made out by the petitioner that she has been prejudiced in any manner on account of non- examination of the sanctioning authority. He submitted that the basic ingredients of the offence are fully made out against the petitioner and the judgments passed by the learned courts below are well speaking and reasoned judgments. Findings of this Court 12. This Court finds that a complaint petition was filed by Income Tax Officer, Dhanbad, after obtaining due sanction, as required under Section 279(1) of Income Tax Act, before the court of Special Judge (Economic Offences), Dhanbad and charge was framed against the petitioner under Section 277 of the Income Tax Act on 29.11.2011. During trial, the prosecution examined three witnesses namely, Balram Kumar Mandal (PW-1), Sudhir Kumar Ganguly (PW-2) and Sanjit Kumar Mitra (PW-3). PW-1 was a Steno in I.T. Department and is a formal witness, PW-2 was posted as the Manager in Chirkunda branch and had inquired into the matter relating to the case and PW-3 is the Complainant and is an Income Tax Officer in the Department. All the three prosecution witnesses were duly cross-examined on behalf of the petitioner and thereafter, the statements of the petitioner was recorded under Section 313 of Cr.P.C on 20-05-2013. The petitioner was also given an opportunity to examine defence witnesses, if any, but she did not avail such opportunity and after hearing the arguments of both the parties, the judgment was delivered.

Following documents were exhibited before the learned trial court: (i) Ext.-1, Sanction order (ii) Ext.-2, Letter of Branch Manager, B.O.I., Chirkunda Branch (iii) Ext.-3, Original Return (SARAL) (iv) Ext.-4, 4/1 & 4/2, Computation of Income and T.D.S. purported to be issued by L.I.C. (v) Ext.-5, Copy of Letter issued to Assessee. (vi) Ext.-6, Reply of Assessee (vii) Exts.-7 and 8, Letters issued to Branch Managers, S.B.I. and B.O.I. (viii) Ext.-9, Letter issued to Branch Manager, L.I.C., Chirkunda (ix) Ext.-10, Letter issued from Branch Manager, L.I.C., Chirkunda, (x) Ext.-11, Show cause to Munna Chatterjee (xi) Ext.-11/1, Reply of show cause by Munna Chatterjee and Complaint Petition. 13. This Court finds that the learned trial court examined the oral as well as documentary evidences on record and meticulously dealt with each and every evidence on record and has recorded the following findings:

“If the evidence available on record is critically examined in the light of ingredient mentioned above, then it is quite evident that the witnesses examined on behalf of the prosecution are consistent on the point that accused person had filed a return relating to the assessment year 2003-04 and thereby claimed refund of Rs.40,437/- on the basis of T.D.S, purported to be submitted by the LIC, Chirkunda branch, repayment of housing loan etc., but during course of inquiry, these documents were not found genuine. This factum further stands proved with the oral testimony of P.W.-2 Sudhir Kumar Ganguly, who has categorically deposed that housing

loan account no.1243 with respect to accused Mrs. Munna Chatterjee was never opened in his branch. Again this fact further conclusively corroborates with Ext – 2 (Letter of Branch Manager, B.O.I. Chirkunda Branch). Apart from above, Ext. 10 (Letter issued from Branch Manager, LIC Chirkunda) also corroborates that accused person had claimed refund on the basis of false papers. It has categorically been reported by Branch Manager, LIC, Chirkunda Branch vide letter dated 13.10.2003 (Ext 10) that aforesaid policy and agent code, as mentioned in Income Tax Return are non-existent in his branch.

The accused person has nowhere denied her signature over the documents attached with return, however it has been claimed that she had put her signature over unfilled form of Return. If plea taken by the accused person in the light of evidence available on record, then it becomes crystal clear that the accused person having knowledge of the fact that the said document can be misused put her signature and thus agreed to bear the risk, because the law does not permit such type of lame excuses and thus same cannot be considered.

Thus under the circumstances the court is of the opinion that prosecution has been able to establish the factum of furnishing false particulars by the accused person in verification portion of return, by cogent, credible and consistent evidence.” 14. The learned trial court also dealt with the arguments of the defence including the point of mens-rea and the plea that the petitioner was ignorant with the provisions of Income Tax Act and that being suggested by the L.I.C. agent had put her signature under bonafide belief on blank paper which was later on misused. The learned trial court also considered the plea of non-examination of the sanctioning authority and was of the view that the sanction order has been duly proved and the court was of the opinion that no prejudice has been caused to the petitioner due to non-examination of the sanctioning

authority and after considering each and every defence and the pleas raised by the petitioner, the learned trial court was of the view that prosecution has successfully been able to establish the case beyond shadows of all reasonable doubts that the petitioner had consciously furnished wrong statement, knowing or at least having reason to believe it to be false, and thereby committed the offence punishable under Section 277 of Income Tax Act. The learned trial court was of the view that when a person signs a document there is a presumption that the person has read the document properly and only then affixes the signature thereon, unless there is proof of force or fraud which requires to be proved by cogent evidences. The learned trial court also considered the fact that the petitioner had admitted that she had put her signature on the return and rejected the arguments of the defence that the Income tax return was signed under mistaken beliefs particularly when the assessee is an educated person. The learned trial court also considered Section 278E of the Income Tax Act that in any prosecution for any offence under this Act which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state, but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution. The learned trial court also considered that the explanation appended to the provision of Section 278E which says that “culpable mental state” includes intention, motive or knowledge of a fact or belief in, or reason to believe a fact. Hence, the arguments advanced by the learned defence counsel with regard to absence of animus is of no help because culpable mental state on the part of the accused has to be presumed in the prosecution for any offence under the Act, and the onus lies on the accused to rebut the same, but hopelessly, the accused has failed to discharge this onus.

“12. On perusal of the documentary evidence adduced by the prosecution, it appears that “SARAL” Form furnished by the appellant Munna Chatterjee for the year 2002-2003 is Ext.3 in which she has shown her annual income to be Rs.82,397/- by business or profession. She has also shown her agricultural income to be Rs.53,997/- and Rs.40,437/- was tax deducted at source. This includes rebate under Section 88 of Income Tax Act from L.I.C. Policy No.540707562 and housing loan installment of Rs.20,000/-. The return has been signed by the appellant Munna Chatterjee. From Ext.4/1 and 4/2 it appears that the appellant was claiming rebate in view of the insurance premium given by the appellant on the life policy held and interest paid on the housing loan. From letter of Branch Manager, L.I.C. Chirkunda it was informed that policy no.540707562 did not belong to Munna Chatterjee as she has filed under the policy.

show cause (Ext.11/1) she has admitted that she had signed some blank papers as she had fallen prey to the human weakness of greed.” 17. This Court finds that that learned courts below have passed well-reasoned judgments considering each and every aspect of the matter including the arguments advanced by the petitioner which have been again raised in this revision petition. The learned courts below have returned consistent findings. The learned counsel for the petitioner during the course of arguments has also referred to the evidence on record but has not advanced any arguments pointing out any material evidence which could indicate any perversity in the judgements. There is no scope for re-appreciation of evidences/materials on record to come to a different finding by the revisional court in absence of any perversity. 18. So far as non-examination of the sanctioning authority is concerned, this aspect of the matter was raised by the petitioner before the learned court below also but the same was rejected on the ground that the sanction for prosecution was duly exhibited and no prejudice has been caused to the petitioner on account of non-examination of the sanctioning authority. In the present case also, the point regarding non- examination of the sanctioning authority has been raised but no arguments have been advanced as to how the petitioner has been prejudiced by non-examination of the sanctioning authority and the grant of sanction to prosecute the petitioner is not in dispute. Accordingly, the point raised by the petitioner challenging the impugned judgements on account of non-examination of the sanctioning authority is hereby rejected. 19. So far as the judgment passed by the Hon’ble Supreme Court reported in 1999 (5) SCC 241 (Prem Dass –versus- Income Tax Officer) is concerned, the same does not apply to the facts and circumstance of this case in view of the fact that

the assessment year relating to the said case was 1980-1981 and the provision of Section 278E has been inserted in the Income Tax Act only with effect from 10.09.1986. Otherwise also, in the aforesaid judgement, the tribunal had come to a positive finding that there was no act of concealment on the part of the assessee and he had returned the income on estimate basis and the Tribunal further found that it is a case purely on difference of opinion as to the estimates and not a case of concealment of income or even furnishing of inaccurate particulars of income. The Hon’ble Supreme Court interalia held that a statement made by a person in any verification under the Act can be an offence under Section 277 if the person making the same either knew or believe the same to be false or does not believe to be true. In the present case, there is a clear finding that the petitioner had herself stated in the show-cause reply that she had fallen prey to greed and in her statement made under section 313 of Cr.P.C there is only general denial and she has not led any defence evidence. This is coupled with the presumption prescribed under Section 278E of the Income Tax Act as considered and fully discussed by the learned court below while convicting the petitioner. 20. In such circumstances, considering the nature of offence and the minimum sentence of six months prescribed under Section 277 of the Income Tax Act, this Court is of the considered view that no sympathetic view can be taken in favour of the petitioner on the point of sentence as the petitioner has been convicted for 6 months only with fine. Accordingly, the present criminal revision application is hereby dismissed. 21. The bail bonds furnished by the petitioner are cancelled.

(Anubha Rawat Choudhary, J.) Saurav/