1987 (1) TMI 3 - HC - Income Tax

Issues Involved:
1. Application of mind by the Magistrate.
2. Investigation under the Criminal Procedure Code.
3. Summons content.
4. Ingredients of Section 120B IPC.
5. Misjoinder of charges and persons.
6. Premature prosecution under Section 277 of the Income-tax Act.
7. Liability under Section 271(1)(c) of the Income-tax Act.
8. Competency of the complainant under Sections 172 to 178 IPC.
9. Competency of the complainant under Sections 199 to 201 IPC.

Issue-wise Detailed Analysis:

1. Application of Mind by the Magistrate:
The accused argued that the Magistrate did not apply his mind when issuing the process, as evidenced by the use of a rubber stamp. The court found no merit in this argument, noting that each accused was provided with a copy of the complaint detailing the offences under the Indian Penal Code (IPC) and the Income-tax Act. Therefore, the accused were not prejudiced by the summons mentioning only Section 277 of the Income-tax Act.

2. Investigation under the Criminal Procedure Code:
The accused contended that the prosecution was vitiated because the offences under the IPC were not investigated as per the Criminal Procedure Code. The court held that the accused could raise these points before the trial court under Sections 245(1) or (2) of the Criminal Procedure Code. However, since the stage for discharge under Section 245(2) had passed, the accused could only seek discharge after evidence under Section 244 was recorded.

3. Summons Content:
The accused claimed that the summons mentioned only Section 277 of the Income-tax Act, omitting the IPC offences, causing surprise. The court dismissed this point, stating that the accused were provided with the complaint detailing all offences, thus no prejudice was caused.

4. Ingredients of Section 120B IPC:
The accused argued that no ingredients of criminal conspiracy under Section 120B IPC were made out. The court did not find this argument convincing, as the detailed complaint provided sufficient material to establish a prima facie case of conspiracy.

5. Misjoinder of Charges and Persons:
The accused claimed misjoinder of charges and persons. The court did not find this argument persuasive, as the complaint detailed a conspiracy involving multiple accused and offences, justifying their joint trial.

6. Premature Prosecution under Section 277 of the Income-tax Act:
The accused argued that prosecution under Section 277 was premature without complying with Sections 271(1)(c) and 273(a) of the Income-tax Act. The court held that the prosecution was not premature and that the accused could raise this defense during the trial.

7. Liability under Section 271(1)(c) of the Income-tax Act:
The accused contended that only an assessee could be held liable under Section 271(1)(c). The court found this argument irrelevant at the current stage, as the complaint was based on conspiracy and other IPC offences, not solely on Section 271(1)(c).

8. Competency of the Complainant under Sections 172 to 178 IPC:
The accused argued that the Chief Commissioner (Admn.) was not competent to file a complaint for offences under Sections 172 to 178 IPC. The court agreed, noting that the complainant was not administratively superior to the Income-tax Officers at Trivandrum or Bombay. Thus, the charges related to offences at these locations were quashed.

9. Competency of the Complainant under Sections 199 to 201 IPC:
The accused claimed that the Chief Commissioner (Admn.) was not competent to file a complaint under Sections 199 to 201 IPC, as he was not a court. The court agreed, quashing the proceedings concerning offences under Section 195(1)(b) of the Criminal Procedure Code.

Conclusion:
The petitions were allowed in part. The court quashed the proceedings related to offences alleged to have taken place at Trivandrum and Bombay, except for evidence related to conspiracy. Additionally, the proceedings concerning offences under Section 195(1)(b) of the Criminal Procedure Code were quashed.

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