2022 (11) TMI 684 - HC - Indian Laws

Illegal gratification/bribe - allegation against the person working in Income Tax Office as Tax Assistant - demand of rupees eight thousand from the complainant for processing the refund claim of the income tax assessee Smt. Sundaramani Singh for the financial year 2010-11 - HELD THAT - In view of the prevaricating and inconsistent statement given by P.W.11 at different stages, it is very difficult to accept him as a truthful and reliable witness and his evidence becomes unworthy of credence. In the case of Suraj Mal 1979 (2) TMI 203 - SUPREME COURT , it is held that where witnesses make two inconsistent statements in their evidence either at one stage or at two stages, the testimony of such witnesses becomes unreliable and unworthy of credence and in the absence of special circumstances, no conviction can be based on the evidence of such witnesses. Since the prosecution relies only upon the version of P.W.11 regarding the demand aspect of Rs.8,000/- (rupees eight thousand) prior to the date of trap, it cannot be said that the same has been proved beyond all reasonable doubt. There is difference in evidence as to what was the exact conversation between P.W.11 and the appellant outside the office. When as per the evidence of the T.L.O. (P.W.13), it was decided at the pre-trap proceeding that after reaching the Income Tax Office, P.W.11 would proceed to the office of the appellant inside the office and P.W.6 would follow him closely, it is not known why P.W.11 called the appellant outside over phone and handed over the tainted money to him outside and who had given instruction to him to do that and when, after they left C.B.I. Office, Rourkela - P.W.11 has not stated that it was P.W.6 who accompanied him to the office of the appellant in a motor cycle and overheard the conversation between himself and the appellant and saw the transaction. In view of the available materials on records, it is very difficult to hold that the prosecution has successfully established that on the date of trap also, there was demand made by the appellant to P.W.11. When the appellant as Tax Assistant had no role in the refund of income tax to the assessee except processing the same to the I.T.O. Sri K.C. Barik (P.W.8), which he had already done as per the evidence of P.W.4, I am of the humble view that there is substantial force in the contention of the learned counsel for the appellant that no work was pending with the appellant for which there was no occasion on his part to raise any demand of bribe - there is force in the submission of the learned counsel for the appellant that P.W.3 is not the competent authority to accord sanction for launching prosecution against the appellant, which is very much essential under section 19 of the P.C. Act and that the sanction order (Ext.8) is a defective one which was mechanically prepared without any application of mind. When the prosecution has not successfully established the demand aspect of bribe by the appellant beyond all reasonable doubt, the defence plea put forth by the appellant has been established by preponderance of probability and there is defect in the sanction order (Ext.8), it would not be legally justified to hold the appellant guilty of the offences charged - the impugned judgment and order of conviction of the appellant under section 7 and section 13(2) read with section 13(1)(d) of the 1988 Act and the sentence passed thereunder is hereby set aside - appeal allowed.

Summary

Issues Involved:
1. Demand and acceptance of bribe.
2. Validity of the sanction order for prosecution.
3. Defense plea of repayment of loan.

Detailed Analysis:

1. Demand and Acceptance of Bribe:
The appellant, a Tax Assistant, was accused of demanding and accepting a bribe of Rs.8,000/- for processing an income tax refund. The prosecution's case relied heavily on the testimony of P.W.11, the complainant, who alleged that the appellant demanded the bribe on 09.03.2012 and accepted it on 12.03.2012. During the trial, P.W.11 was declared hostile, and his testimony became inconsistent and unreliable. The court noted that P.W.11 failed to identify the appellant in the dock and contradicted himself regarding the demand and acceptance of the bribe. The court emphasized that the prosecution must prove the demand for illegal gratification beyond reasonable doubt, which it failed to do in this case.

2. Validity of the Sanction Order for Prosecution:
The sanction order (Ext.8) for prosecuting the appellant was issued by P.W.3, the Assistant Commissioner of Income Tax. However, it was established that the Commissioner of Income Tax, Odisha, Bhubaneswar, was the actual appointing and removal authority for the Tax Assistant. P.W.3 admitted that he had not filed any document to show he was the removal authority of the appellant, and the sanction order did not disclose the mode of receiving documents or the names of witnesses whose statements were perused. The court concluded that the sanction order was defective and mechanically prepared without any application of mind, making it invalid.

3. Defense Plea of Repayment of Loan:
The appellant's defense was that the money received was a part repayment of a loan from B.D. Gupta, not a bribe. P.W.5, the income tax assessee, confirmed that B.D. Gupta had taken a loan from the appellant and had not repaid it, leading to a misunderstanding. P.W.11 also stated that he handed over the money to the appellant as per B.D. Gupta's instruction. The court found this defense plausible and concluded that the appellant had established his plea by the preponderance of probability, successfully rebutting the presumption under section 20 of the 1988 Act.

Conclusion:
The court held that the prosecution failed to prove the demand for bribe beyond reasonable doubt. The defense plea of loan repayment was established by the preponderance of probability. Additionally, the sanction order for prosecution was found to be defective. Consequently, the appellant was acquitted of all charges, and the impugned judgment and order of conviction were set aside. The appellant was discharged from liability of his bail bond, and the personal and surety bonds were canceled.