1981 (4) TMI 14 - HC - Income Tax

Summary

Issues Involved:
1. Enhancement of sentences under Section 277 of the Income Tax Act.
2. Adequacy of fines imposed under Section 193 of the Indian Penal Code.
3. Consideration of extenuating circumstances for leniency in sentencing.

Detailed Analysis:

1. Enhancement of Sentences under Section 277 of the Income Tax Act:

The Union of India appealed for enhancement of the sentences awarded to the accused under Section 277 of the Income Tax Act. The learned Magistrate had sentenced the second accused to imprisonment till the rising of the court, citing extenuating circumstances such as the accused being first offenders, the offences being committed ten years back, and the subsequent submission of revised returns showing correct figures. The High Court noted that fourteen years had passed since the offences were committed and that penalties had already been levied by the Department. Additionally, the account books were written by a part-time employee, and there was no evidence that the accused were conversant with English. The High Court found that the reasons given by the Magistrate for not imposing the minimum imprisonment were adequate, and therefore, the sentence of imprisonment till the rising of the court for the offence under Section 277 of the Income Tax Act was upheld.

2. Adequacy of Fines Imposed under Section 193 of the Indian Penal Code:

The fines imposed by the Magistrate under Section 193 of the Indian Penal Code were contested as being inadequate. The High Court enhanced the fines for the second and third accused. For the second accused, the fine was increased by Rs. 1,000, making it a total of Rs. 2,000, with a default sentence of rigorous imprisonment for six months. For the third accused, the fine was increased by Rs. 500, making it a total of Rs. 1,000, with a default sentence of rigorous imprisonment for six months. The High Court found that the initial fines were insufficient given the gravity of the offences.

3. Consideration of Extenuating Circumstances for Leniency in Sentencing:

The Magistrate had considered several extenuating circumstances for showing leniency in sentencing, including the fact that the offences were committed ten years prior, the accused were first offenders, and they had submitted revised returns with correct figures. The High Court agreed with this assessment and added that fourteen years had passed since the offences, penalties had been imposed by the Department, and there was no evidence that the accused were conversant with English or had committed similar offences thereafter. The High Court found these reasons adequate for not imposing the minimum imprisonment prescribed under Section 277 of the Income Tax Act.

Conclusion:

The High Court allowed the appeal in part by enhancing the fines under Section 193 of the Indian Penal Code but upheld the sentences of imprisonment till the rising of the court under Section 277 of the Income Tax Act, considering the extenuating circumstances and the passage of time since the offences were committed. The appeal was accordingly allowed with modifications to the fines imposed.