Chief Commissioner of Income Tax vs. Sri Talasila Srinivasa Rao

HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT JAMMU

Reserved on 16.08.2021 Pronounced on: 23 .08.2021

CRMC No. 303/2012

Nazir Ahmed Choudhary

…..Appellant(s)/Petitioner(s)

Through: Mr. P. N. Raina, Sr. Advocate with Mr. J. A. Hamal, Advocate

State of J&K and others

.…. Respondent(s)

Through: Mr. Raman Sharma, AAG

Coram: HON’BLE MR. JUSTICE RAJNESH OSWAL, JUDGE

JUDGMENT

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after receipt of the questionnaire, submitted the detailed response to the said questionnaire touching all the aspects of the matter and clearly demonstrated in his reply that the properties those have been attributed to him and taken to be his assets are in fact the properties belonging to his family and for which proper accounts have been maintained and income tax returns filed from time to time. It is further submitted that after the reply submitted by the petitioner to the questionnaire, the Vigilance Organization, respondent No. 3 herein has wrote to the General Administration Department for accord of sanction qua prosecution of the petitioner and the petitioner also made a representation to the General Administration, respondent No. 2 herein dated 28.01.2012. Thereafter, respondent No. 2 had sought reply to the said representation from the respondent No. 3 and the respondent No. 3 submitted its reply to respondent No. 2 by way of a communication dated 03.04.2012. 3. It is further stated that after the reply filed by the respondent No. 3 to respondent No. 2, the matter seems to have been decided by the respondent No. 2 haphazardly and without proper application of mind leading to issuance of Government order No. 30-GAD (Vig) of 2012 dated 10.09.2012 (supra) by virtue of which sanction for the prosecution of the petitioner has been accorded. 4. The present petition has been filed by the petitioner on the following grounds: (a) That the action of the respondents both in filing FIR bearing No. 14/2017 (supra) as also for grant of sanction for prosecution of

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the petitioner is bad in the eye of law in as much as the properties which are legal properties of the family members of the petitioner and the assets to which the contributions have been made by the father, brother and wife of the petitioner and those have been properly documented with the Income Tax Department, cannot be taken as exclusive properties of the petitioner. (b) That once the sanctioning authority has accepted the representation filed by the petitioner and sought reply from the Vigilance Organization, Jammu, respondent No. 3 herein, then there is no justification under law not to evaluate the representation, therefore, the order for grant of sanction for prosecution of the petitioner is a result of non application of mind. (c) That the sanctioning authority granting sanction for prosecution under section 6 of the J&K Prevention of Corruption Act does not and cannot act mere as a post office by granting the sanction on the mere asking of the prosecution without considering the contours of the case. (d) That no case much less a case punishable under section 5(1)(e) read with section 5(2) of the Jammu and Kashmir Prevention of Corruption Act is made out against the petitioner. 5. Response stands filed by the Vigilance Organization, Jammu respondent No. 3 herein, in which it is stated that the instant case was registered in Police Station, Vigilance Organization, Jammu on 30.05.2007 for alleged possession of assets disproportionate to the known source of income possessed by the petitioner. On the basis of oral and documentary evidence collected during the course of investigation, it has been established that the petitioner, the then Assistant Executive Engineer, TLCD-1, Jammu had raised assets which were disproportionate to his known source of income of Rs.

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54,21,951/-. It is further stated that a prima facie case for commission of offence under section 5(2) of the Jammu and Kashmir Prevention of Corruption Act, 2006 was established against the petitioner and sanction in this regard has also been obtained from the Government for trial of the petitioner in the competent court of law. 6. It is also stated in the response that the petitioner in reply to the questionnaire has tried to establish that the properties attributed belong to the joint family whereas the investigation conducted and records seized has revealed otherwise. The record seized from the society reveals that the title of the land over which the Maloofa Complex has been constructed is in the name of the petitioner and his family members (i.e. wife and son), as such the expenditure incurred on the construction of Maloofa Complex is attributed to the petitioner as disproportionate assets. Further it is submitted that after receiving the reply to the questionnaire by the petitioner, was considered by the Investigating Officer and after considering the reply to his questionnaire, still the petitioner was found possessing disproportionate assets more than his known source of income, as such, the matter was referred to the General Administration Department for accord of sanction to prosecute the petitioner. It is further stated that pursuant to the representation made by the petitioner, reply was sought from the respondent No. 3 and the reply was submitted to the General Administration Department by the Central Vigilance Office. It is stated that the father of the petitioner, Late Haji Fakar Din started filing IT returns during the period 1998

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to 2007 before the IT authorities. During the investigation of the case, Income Tax return submitted by the father of the petitioner to the Income Tax Department in August, 1999 vide receipt No. 752 for the assessment year, 1999-2000 was obtained and perused. The perusal of the Income Tax returns reveals that the father of the petitioner had mentioned in the said income tax return that he had invested Rs. 19,98,515/- on a joint family property situated at Sector- C, Sainik Colony, Bye Pass Road, Jammu during the period ending March, 1998 from the savings and earnings out of agriculture income for the last 60 years which included gifts from friends/relatives and has also shown investment of Rs. 20,000/- on the building at Sainik Colony during the assessment year, 1999-2000. 7. It is further submitted that a perusal of the returns filed for the assessment year 1998-1999 reveals that the father of the accused has not mentioned anything in the Income Tax return about the investment made on the joint property at Sainik Colony, Jammu or any other building. The father of the accused in his income tax return for the year 2000-01 has also mentioned investment of Rs. 18,600/- on the building without mentioning place. It is further submitted that except the above stated Income Tax returns, the father of the petitioner has not mentioned anything about the investment made on the building at Sainik Colony belonging to the petitioner. It is further submitted that from perusal of the Income Tax returns by the father of the petitioner it is revealed that he had shown his income as commission from the sale/purchase of plots and nothing has been

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mentioned about the agricultural income. No evidence came forth which could demonstrate that Haji Fakar Din had purchased any property in Sainik Colony area on his name which could be considered as joint property. However, the petitioner has purchased a plot in parts measuring about three kanals at Sainik Colony in his name and in the name of his wife and son, on which the petitioner constructed a commercial complex under the name and style Maloofa Complex. Neither any gift deed nor any other document has been found from which it could be gathered that the father of the petitioner had gifted the said land at Sainik Colony to his son (i.e. the petitioner or his wife or son). It has also been found that the father of the petitioner is having 02 joint bank accounts with his son, petitioner herein, in the State Bank of India, Branch Kaluchak and J&K Bank Branch, Gujjar Nagar opened in the year, 1999 and 2006 respectively. It has also been found that the wife of the petitioner in her income tax return has shown an investment of Rs. 18,65,710/- on the construction of the Maloofa Complex from her business of cutting and tailoring. However, the wife of the petitioner was not found running any business of cutting and tailoring. It has been found that the petitioner received Rs. 12 lacs from his brother through cheque during check period and the said amount received by the petitioner has been considered as income of the petitioner. 8. It is further submitted that after the completion of the investigation, the case was sent to the Central Vigilance Office, where after scrutiny of the same, along with complete record was sent to the

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respondent No. 2 for accord of sanction. Thereafter, the Government after applying its mind and going through the record seized during the investigation, accorded sanction for the prosecution of the petitioner. 9. Mr. P. N. Raina, learned senior counsel appearing for the petitioner has vehemently argued that neither the Investigating Officer has considered the reply filed by the petitioner to the questionnaire nor the sanctioning authority has examined the whole of the record and further he laid stress that the residential house and Maloofa Complex building is a joint family property. Learned counsel has relied upon the judgment of the Supreme Court in State of Tamil Nadu v M. M. Rajendran, (1998)9 SCC 268. 10. Per contra, Mr. Raman Sharma, learned AAG has vehemently argued that the FIR discloses the commission of a cognizable offence by the petitioner and the issue with regard to the validity of sanction cannot be questioned by the petitioner through the medium of the present petition and the same is a matter of trial. 11. Heard and perused the record. 12. A perusal of the record reveals that pursuant to the verification of the assets of the petitioner, it was found that the petitioner has acquired number of immovable and movable properties which includes palatial building Maloofa Complex, 679-C, located at Sainik Colony Jammu, a house under construction at Chowadhi, Jammu, a single storey building at Gujjar Colony, Jammu, one Chaverlet Car bearing

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registration No. JK02AD 1878, one Maruti 800 Car bearing registration No. JK02 AC 6782 and in addition to the above mentioned assets, the petitioner owns other expensive household articles/costly electronic gadgets and bank deposits. It was also revealed that the expenditure incurred by the petitioner in acquiring these assets is much more than the legitimate income earned by him during his service career. A perusal of the FIR reveals that it cannot be said that there are no allegations against the petitioner and the FIR does not disclose commission of any offence. The FIR reveals the allegations regarding the commission of cognizable offence and the same were required to be investigated and after completion of investigation, even sanction for prosecution has been accorded. 13. So far as the contention of the petitioner with regard to the sanction is concerned. A perusal of the order issued by the Government vide Government Order No. 30-GAD(Vig) of 2012 dated 10.09.2012 reveals that the sanctioning authority after examining the record and evidence collected in the case by the Investigating Agency and applying its mind to the fact and circumstances of the case, accorded the sanction for prosecution of the petitioner. 14. In the sanction order, it has been revealed that the petitioner has acquired assets worth Rs. 1,25,85,549/- and besides that the petitioner was also found to have incurred an expenditure of Rs. 40,01,304/- which includes expenditure of 33 % of the salary of the petitioner earned during the check period on non-verifiable items. It is also mentioned in the order that the total value of the assets

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disproportionate to the known sources of the income of the petitioner were found to be Rs. 54,21,951/-. 15. The contention of Mr. Raina, learned senior counsel that the sanctioning authority has not applied its mind as the whole of the record of the investigation was not submitted before the sanctioning authority, is misconceived as the perusal of the sanction order reveals that the sanctioning authority after examining the record and evidence collected in the case by the Investigating Agency has accorded the sanction for prosecuting the petitioner. 16. Be that as it may, in nutshell, the case of the petitioner is that the sanction has not been property granted. The Apex Court in Central Bureau of Investigation v Ashok Kumar Aggarwal, (2014) 14 SCC 295 has observed in paragraphs 58 and 59 as under: “58. The most relevant issue involved herein is as at what stage the validity of sanction order can be raised. The issue is no more res integra. In Dinesh Kumar v. Chairman Airport Authority of India, this Court dealt with the issue and placing reliance upon the judgment in Parkash Singh Badal & Anr. v. State of Punjab, came to the conclusion as under: “13. In our view, having regard to the facts of the present case, now since cognizance has already been taken against the appellant by the trial Judge, the High Court cannot be said to have erred in leaving the question of validity of sanction open for consideration by the trial court and giving liberty to the appellant to raise the issue concerning validity of sanction order in the course of trial. Such course is in accord with the decision of this Court in Parkash Singh Badal…” (emphasis supplied)”.

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(3) Notwithstanding anything contained in the Code of Criminal Procedure, Samvat 198-(a) no finding, sentence or order passed by a Special Judge shall be reversed or altered by a court in appeal, confirmation or revision on the ground of any error, omission or irregularities in, the sanction required under sub-section (1), unless in the opinion of that court, a failure of justice has in fact occasioned thereby; (b) no court shall stay the proceedings under this Act on the ground of any error, omission or irregularity in the sanction granted by the authority, unless it is satisfied that such error, omission or irregularity has resulted in a failure of justice; (c) no court shall stay the proceedings under this Act on any other ground and no court shall exercise the powers of revision in relation to any interlocutory order passed in any enquiry, trial, appeal or other proceedings.” 18. Thus, it is clear that no finding, sentence or order passed by a Special Judge can be reversed or altered by a court in a appeal, confirmation or revision on the ground of any error, omission or irregularity in the sanction unless in the opinion of that court a failure of justice in fact has been occasioned thereby. So far as the validity of the sanction is concerned, the same is required to be considered during the course of trial and also it is to be seen whether because of any error or omission in the sanction, any failure of justice has occasioned to the accused or not. In State of Bihar and others v. Raja Mangal Ram reported in AIR 2014 SC 1674, the High had quashed the criminal

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proceedings on the ground that the Law Department was not the competent authority to grant sanction for the prosecution and also because sanction was passed mechanically. The Hon’ble Apex Court observed that even in such a case, it was necessary for the High Court to reach to the conclusion that a failure of justice has been occasioned and further that one of the grounds taken by the High Court for quashing the criminal proceedings that the sanction order in question was passed mechanically and without consideration of relevant facts, should have been considered only after evidence in the cases have been led on the issue in question. 19. For all what has been discussed above, this Court is of the considered opinion that the issue with regard to the validity of the sanction order cannot be questioned by the petitioner prior to the filing of the charge-sheet and it can be considered only after the evidence is led on the said issue and even in that eventuality it is to be seen whether any error or omission effecting the validity of the sanction has occasioned failure of justice to the accused or not. 20. In view of the aforesaid discussion, there is no merit in the present petition, as such, the same is dismissed.

(Rajnesh Oswal) Judge Jammu 23.08.2021 Rakesh

Whether the order is speaking: Yes

Whether the order is reportable: Yes