2022 (9) TMI 112 - HC - Income Tax

Offence punishable u/s 276CC - Non filing of return - Maintainability of criminal appeals against Magistrate orders - Stoppage of proceedings - appeals are filed by the Income Tax Department u/s 378 of the Code of Criminal Procedure, 1973 instead of invoking revision provisions of Section 397 of Cr.P.C . - HELD THAT - On a bare reading of the provision of Section 258 of Cr.P.C., it is clearly held in the last line that stoppage of proceedings is made after the evidence of the principal witnesses has been recorded, pronounce a judgment of acquittal, and in any other case, release the accused, and such release shall have the effect of discharge . The very provision of Section 258 of Cr.P.C. defines, any stoppage of the proceedings is made after evidence of the principal witnesses has been recorded, pronounce a judgment of acquittal. Therefore, once a case ended in acquittal then the aggrieved complainant has to file an appeal under Section 378 of Cr.P.C. but not a revision, as evidence of some of the witness was already recorded, therefore, it cannot be said as discharge . The definition of Section 258 of Cr.P.C. reads in any other case, release the accused and such release shall have the effect of discharge . That means, without recording evidence of the parties, if the proceedings were closed by way of stopping the proceedings, then it amounts to discharge and such order shall have to be challenged only under Section 397 of Cr.P.C. before the learned Sessions Judge or before the High Court. Thus the orders under challenge passed by the Magistrate, stopping proceedings and releasing the accused, is nothing but an order of discharge, which is challengeable under the revisional provisions of Section 397(1) of Cr.P.C. As per Section 372 of Cr.P.C., no appeal lies unless and otherwise provided by the Code of Criminal Procedure. Such being the case, the appellant-Income Tax Authority cannot invoke the provisions of either Section 372 or Section 378 of Cr.P.C. Hence, in the present case on hand, the appellant has to challenge under the revisional provisions of Section 397 of Cr.P.C. Appellant wants to file a memo for converting the criminal appeals into criminal revision petitions, but the same is objected by the respondents counsel stating that the respondents will lose one more opportunity of challenging the order before the High Court if the revision petition filed before the High Court. The objection of the respondents is sustainable under law. The question of giving permission to the appellant for converting the criminal appeals into criminal revision petition cannot be granted here, as the respondents will lose an opportunity of appeal to the High Court either under Section 482 or Section 397 of Cr.P.C. Therefore, I hold that these criminal appeals are not maintainable and liable to be dismissed and liberty can be granted to the appellant to file an application for condonation of delay, for having spent time in wrong forum, while filing revision petition before the learned Sessions Judge. Accordingly, all the criminal appeals are dismissed as not maintainable. However, liberty is granted to the appellant to file a revision petition under Section 397 of Cr.P.C. before the learned Sessions Judge with liberty to file necessary application for condonation of delay under Section 14 of the Limitation Act for spending time before this Court.

Summary

Issues:
Appeal under Section 378 of Cr.P.C. vs. Revision, Order of Discharge vs. Acquittal, Maintainability of Criminal Appeals, Interpretation of Section 258 of Cr.P.C., Conversion of Appeals into Revision Petitions.

Analysis:
The High Court heard appeals by the Income Tax Department challenging the Magistrate's order closing complaints against the accused under Section 276CC of the Income Tax Act, 1961. The Department sought remand for fresh consideration. The respondents argued that the closure was a discharge, not an acquittal, making it challengeable by revision, not appeal. The appellant contended the orders were acquittals, thus appealable under Section 378 of Cr.P.C. The Court examined the orders and records, noting the complaint was for non-filing of returns, but the accused claimed refunds, rendering the complaints infructuous.

The Court considered judgments from the Madhya Pradesh and Allahabad High Courts on discharge vs. acquittal. It concurred with both, emphasizing the distinction and the need for revision in discharge cases. Referring to Section 258 of Cr.P.C., the Court analyzed the Magistrate's order and found it aligned with stopping proceedings after recording principal witnesses' evidence, leading to discharge. This distinction was crucial in determining the appropriate legal remedy.

The Court highlighted that Section 258 mandated acquittal if principal witnesses' evidence was recorded before stopping proceedings. It clarified that in such cases, appeal under Section 378 was the proper recourse, not revision. Conversely, releasing the accused without recording evidence amounted to discharge, necessitating challenge under Section 397 of Cr.P.C. The Court emphasized that no appeal lay unless specified by the Code, directing the Income Tax Authority to pursue revision under Section 397.

Regarding the conversion of appeals into revision petitions, the Court denied the request, citing the respondents' right to challenge the order before the High Court. It dismissed the criminal appeals as not maintainable but granted liberty to file revision petitions with a condonation of delay application. The Court directed the Registry to circulate the order for future reference in similar cases, ensuring clarity on legal procedures.