2020 (11) TMI 875 - HC - Income Tax

Criminal complaint u/s 276-D - separate criminal complaints u/s 276-C (1) and Section 277 - Seeking clubbing of the three complaints and joint trial - information was received from the Government of France that petitioner is having an account in HSBC Bank, Zurich, Switzerland with the mala fide intention to evade tax and to hide money transactions - HELD THAT - The petitioner is facing three separate trials in all the three complaints before the same Magistrate for allegedly not declaring the fact of having a foreign account to the Income Tax authorities, though the material and evidence relied upon by the respondent/department is similar in all the three complaints. Whether the petitioner is holding a foreign account or not is a matter of trial in the first complaint and the assumption that he holds an undisclosed foreign account, which forms basis of other two complaints, is also subject matter of trial. The respondent has preferred these complaints on the very same material, evidence and documents and allegations in all the three complaints are to a large extent quite same. The petitioner is, thus, facing three separate trials in all the three complaints before the same Magistrate for not declaring the fact of having a foreign account to the Income Tax Authorities. The ingredients of Section 220 of Cr.P.C. have been defined in Chandni Srivastava Vs. CBI Ors. 2016 (2) TMI 1289 - DELHI HIGH COURT in which it was held that Sec. 220 of the Cr.P.C. permits of one trial even if many offences are committed, if such offences form part of the same transaction, the rationale for such an exception being that in such circumstances, separate trials may lead to conflicting judgments. The three complaints in fact are a part of the same transaction. The first complaint has been filed on the assumption that petitioner is holding an undisclosed foreign account and two subsequent complaints are nothing but to arrive at a figure to meet the ingredients of the first offence. The chart given above reveals that the allegations, documents and nature of evidence are same in all the three complaints. In these circumstances, it will be in the interest of justice to have a common trial for all the three complaints. This petition is allowed. The order dated 30th June, 2018 passed by the Ld. Trial Court rejecting the application of the petitioner for clubbing of the three complaints and joint trial is set aside

Issues Involved:
1. Whether the petitioner can be subjected to multiple criminal prosecutions for the same offence based on the same material, evidence, and witnesses.
2. Whether the offences alleged in the complaints form part of the same transaction, warranting a joint trial.
3. Whether the filing of separate complaints by the respondent/department constitutes an abuse of the process of law.

Issue-wise Detailed Analysis:

1. Multiple Criminal Prosecutions for the Same Offence:
The petitioner argued that the respondent/department has filed three separate criminal complaints based on the same material, evidence, witnesses, and documents, with allegations that are largely identical. The petitioner contended that this constitutes an abuse of the process of law and violates Article 20(2) of the Constitution of India, Section 71 of IPC, Section 300 of Cr.P.C, and Section 26 of the General Clauses Act. The petitioner sought the quashing of the order dated 30th June 2018, which rejected the application for clubbing the three complaints and conducting a joint trial.

2. Offences Forming Part of the Same Transaction:
The petitioner maintained that the alleged offences are part of the same transaction, as they all revolve around the core allegation of maintaining an undisclosed foreign account. The petitioner cited the decision in 'Chandni Srivastava Vs. CBI & Ors.' and 'Mohan Baitha vs. State of Bihar' to support the argument that separate trials may lead to conflicting judgments and that the offences should be tried together if they form part of the same transaction. The petitioner argued that the learned trial court's conclusion that each instance of filing an income tax return without disclosing foreign funds constitutes a separate and distinct act is erroneous.

3. Abuse of Process of Law:
The petitioner asserted that the filing of three different complaints by the respondent/department is an abuse of the process of law. It was argued that the respondent/department has not been able to distinguish between 'assessment proceedings' and 'prosecution proceedings.' The petitioner contended that importing the concept of 'Assessment Year' into the definitions of 'offences' triable by Special Courts is contrary to constitutional safeguards and criminal jurisprudence. The petitioner also invoked the 'Doctrine of Issue Estoppel,' which prevents second prosecution on the same set of facts for which a person could be prosecuted.

Respondent's Stand:
The respondent/department argued that during the search proceedings on 28th July 2011, the petitioner admitted to having an undeclared account in HSBC Bank, Zurich, Switzerland, with the intention to evade tax. The respondent contended that the offences committed in each complaint are separate and distinct, and each assessment year is separate and distinct under the provisions of the Income Tax Act. The respondent submitted that the offences under Sections 276C, 276D, and 277 of the Income Tax Act are assessment year specific and can lead to separate complaints. The respondent also pointed out that the offences under Section 276C and Section 277 of the Income Tax Act are warrant triable cases, while the offence under Section 276D is a summons triable offence, and these cannot be tried together.

Court's Analysis and Judgment:
The court noted that the genesis of the trial of the three petitions is the complaint under Section 276-D of the Income Tax Act, and the other two complaints rest on the same. The court observed that the facts and evidence are the same in all the complaints, and the allegations, documents, and nature of evidence are largely identical. The court referred to the decision in 'Chandni Srivastava Vs. CBI & Ors.' and 'Mohan Baitha vs. State of Bihar' to conclude that the offences form part of the same transaction.

The court held that the three complaints are part of the same transaction, and it would be in the interest of justice to have a common trial for all the three complaints. The court allowed the petition, set aside the order dated 30th June 2018, and directed that a common trial in all the three complaints shall take place before the concerned court. The stay order dated 25th February 2020 was vacated, and the petition, along with the pending application, was disposed of. The order was directed to be uploaded on the website of the court forthwith.

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