2015 (1) TMI 975 - HC - Income Tax

Responsibility to pay tds - false documents - Order for acquittal - assessee had claimed the refund on the basis of forged TDS certificates submitted in his income tax return, through respondent-accused Sudesh Kumar, Advocate - Held that - As is evident from the record that the complainant-ITO claimed that the main assessee has submitted the income tax return for the assessment year 1987-88 claiming a refund of ₹ 3395/- based on false TDS certificate through respondent-accused Sudesh Sharma, Advocate. Strange enough, the complainant ITO had not filed any complaint against the main assessee and only arrayed the respondent Advocate as an accused, who was stated to have submitted the income tax return on his behalf. Meaning thereby, the respondent-accused had only submitted the income tax return along with all the pointed documents on behalf of main assessee. In other words, all the TDS certificates, which were purported to have been issued by the Northern Railway, were supplied by the main assessee to his Advocate. It was the main assessee, who had procured the documents from the concerned authorities and claimed the refund. In case, the main assessee had claimed the refund on the basis of forged TDS certificates, then, the Income Tax Authorities were competent and well within their jurisdiction to reject his claim of refund under the relevant provisions of The Income Tax Act. Thereafter, the aggrieved party had a right to file the statutory appeal in this relevant connection. Be that as it may, therefore, in that eventuality, the respondent-accused, who was an Advocate, had just submitted the income tax return on behalf of main assessee, cannot possibly be and indeed could not be held liable for criminal prosecution for procuring the documents by main assessee in order to attract the penal provisions of indicated offences, as contrary urged on behalf of complainant-ITO Meaning thereby, the trial Court has examined the matter in the right perspective and correctly acquitted the respondent-accused. The learned counsel for petitioners did not point out any material, much less cogent, so as to warrant any interference in the impugned judgments of acquittal. Such articulated impugned judgments of acquittal, containing valid reasons, cannot possibly be interfered with in exercise of limited jurisdiction under section 378(4)Cr.PC by this court, unless and until, the same are illegal, perverse and without jurisdiction. Since no such patent illegality or legal infirmity has been pointed out by the learned counsel for petitioners, so, the impugned judgments of acquittal deserve to be and are hereby maintained for the reasons mentioned here-in-above in the obtaining circumstances of the case.

Summary

Issues Involved:
1. Legality of acquittal of the respondent-advocate.
2. Maintainability of the appeal by the complainant-ITO.
3. Jurisdictional error or patent illegality in the trial court's judgment.
4. Bar of limitation under Section 468 Cr.PC.
5. Role and liability of the advocate in submitting the income tax return.

Detailed Analysis:

1. Legality of Acquittal of the Respondent-Advocate:
The main assessee engaged the respondent-advocate to file an income tax return for the assessment year 1987-88, claiming a refund based on TDS certificates later found to be false. The trial court acquitted the respondent-advocate, and the appellate court dismissed the complainant-ITO's appeals as not maintainable. The High Court upheld these judgments, stating that the respondent-advocate merely submitted the return on behalf of the main assessee and could not be held criminally liable for the alleged forgery by the main assessee.

2. Maintainability of the Appeal by the Complainant-ITO:
The complainant-ITO filed time-barred petitions for leave to appeal against the acquittal judgments. The High Court noted that the delay of 547 days had been condoned but found no merit in the petitions. The appellate court's jurisdiction in cases of acquittal was discussed, emphasizing that substantial and compelling reasons are required to overturn a trial court's acquittal, such as palpable errors or grave miscarriages of justice, none of which were present in this case.

3. Jurisdictional Error or Patent Illegality in the Trial Court's Judgment:
The High Court examined whether the trial court committed any jurisdictional error or patent illegality in acquitting the respondent-advocate. It concluded that the trial court's judgment was sound, as the respondent-advocate was not shown to have procured the false documents or benefitted from the refund claim. The trial court correctly found that the advocate's role was limited to filing the return based on documents provided by the main assessee.

4. Bar of Limitation under Section 468 Cr.PC:
The High Court highlighted that the maximum sentence for the offences under Sections 177 and 182 IPC is six months, and the limitation period for taking cognizance of such offences is one year under Section 468 Cr.PC. The respondent-advocate submitted the return in 1989, but the complaint was filed in 1999, well beyond the limitation period. The court emphasized the importance of adhering to statutory limitations to prevent abuse of process and ensure fairness and speedy trials.

5. Role and Liability of the Advocate in Submitting the Income Tax Return:
The High Court reiterated that the respondent-advocate's role was limited to submitting the return on behalf of the main assessee, who provided the documents. The court noted that the Income Tax Authorities should have scrutinized the documents and rejected any fraudulent claims. The advocate could not be held criminally liable for the main assessee's actions, especially in the absence of evidence proving the advocate's involvement in procuring false documents.

Conclusion:
The High Court upheld the trial court's acquittal of the respondent-advocate, finding no substantial or compelling reasons to overturn the judgment. The petitions for leave to appeal were dismissed, reaffirming that the advocate's role in filing the return did not constitute criminal liability for the alleged forgery by the main assessee. The court emphasized the importance of adhering to statutory limitations and the principles of fair and speedy trials.