2002 (3) TMI 25 - HC - Income Tax

Summary

Issues Involved:
1. Quashing of entire proceedings including the order of the Special Judge, Economic Offences, Patna.
2. Cognizance of offences under sections 277 and 278 of the Income-tax Act, 1961.
3. Confessional statement under section 164 of the Code of Criminal Procedure.
4. Claim of immunity from prosecution under the Income-tax Act based on assurance of pardon.
5. Tender of conditional pardon and its implications under section 306 of the Code of Criminal Procedure.
6. Status and obligations of an approver under section 306 of the Code of Criminal Procedure.
7. Pending appeal against the assessment order.

Detailed Analysis:

1. Quashing of Entire Proceedings:
The petitioner sought the quashing of the entire proceedings, including the order dated June 6/7, 2000, by the Special Judge, Economic Offences, Patna. The court found no reason for interference and dismissed the petition.

2. Cognizance of Offences:
The Special Judge, Economic Offences, Patna, took cognizance of offences under sections 277 and 278 of the Income-tax Act, 1961, against Dipesh Chandak and others. The court found a prima facie case against the accused based on the allegations of filing false returns and abetment.

3. Confessional Statement:
Dipesh Chandak made a confessional statement under section 164 of the Code of Criminal Procedure before the Special Judge, C.B.I., Patna, admitting his involvement in misappropriation of funds and fraudulent withdrawals from the State exchequer.

4. Claim of Immunity:
The petitioner claimed immunity from prosecution under the Income-tax Act based on an assurance of pardon by the Special Judge, C.B.I., Patna. The court noted that the Central Government, under section 291 of the Income-tax Act, 1961, has the sole power to grant immunity from prosecution, which was not granted in this case.

5. Tender of Conditional Pardon:
The Special Judge, C.B.I., Patna, tendered conditional pardon to Dipesh Chandak, which he accepted. The pardon was granted under section 306 of the Code of Criminal Procedure for obtaining true evidence related to the offences.

6. Status and Obligations of an Approver:
Upon acceptance of the pardon, Dipesh Chandak's status changed to that of an approver, making him a witness. Section 306(4) of the Code mandates that an approver must be examined as a witness and detained in custody unless on bail. The court emphasized that the approver must fulfill all terms of the pardon, and until the trial concludes and the approver is examined, he continues to hold the position of an accused.

7. Pending Appeal:
The petitioner had an appeal against the assessment order, which was allowed by the appellate authority for the assessment year 1991-92. However, the complaint case pertained to returns filed for the years 1988-89 to 1996-97, and the matter was pending before the Income-tax Appellate Tribunal.

Conclusion:
The court concluded that the petitioner, having accepted conditional pardon, must fulfill all terms and conditions of the pardon. The pending trials and the necessity of examining the approver as a witness preclude any claim of immunity from prosecution. The petition for quashing the proceedings was dismissed.