2023 (1) TMI 96 - SCH - Income Tax

Discharging the accused for the offences punishable u/s 276B r.w.s. 278B confirmed by the High Court - HELD THAT - Criminal complaints were filed against the Respondent-Company and one another, namely, S. Sunil V. Raheja, for the offences punishable u/s 276B r.w.s. 278B of the Act. In the complaints, accused No.2/S. Sunil V. Raheja is shown as Managing Director and is treated as the Principal Officer of the accused-Company. Trial Court discharged both the accused on the ground that Respondent No.2 was wrongly treated as the Principal Officer by the Department. Reliance was placed on Section 2(35) of the Act. The order of discharge has been confirmed by the High Court, by the impugned judgment and orders passed in revision petitions. Number of submissions have been made by learned counsel appearing for the respective parties in support of their rival submissions on the respondent No.2-accused No.2/S. Sunil V. Raheja treated as a Principal Officer. After making some submissions, Mr. Preetesh Kapur, learned Senior Advocate, appearing for Respondent No.2, under the instructions, has stated at the Bar that if the orders passed by the learned trial Court discharging the accused confirmed by the High Court are set aside and the trial is ordered to be proceeded further in accordance with law and on its own merits and keeping all the defences which may be available to the accused open, respondents have no objection. We do not further enter into the rival submissions made on behalf of the respective parties. The order(s) passed by the learned trial Court discharging the accused for the offences punishable under Section 276B read with Section 278B of the Act confirmed by the High Court are hereby quashed and set aside. Now the trials are ordered to be proceeded further which shall be decided and disposed of by the learned trial Court in accordance with law and on its own merits. It goes without saying that all the defences which will be available to the accused shall be considered by the learned trial Court in accordance with law and on its own merits and on the basis of the evidence led. We direct the learned trial Court to conclude the trial within a period of 12 months from the date of receipt of the present order.

Summary

Issues:
1. Dismissal of Revision Petitions by High Court
2. Discharge of accused under Income Tax Act
3. Identification of Principal Officer
4. Trial proceedings and directions

Analysis:
1. The Supreme Court addressed the issue of dismissal of Revision Petitions by the High Court, where the Department was dissatisfied with the judgment and orders dated 11.03.2022 and 07.03.2022. The High Court had confirmed the trial court's decision to discharge the accused for offenses under Section 276B read with Section 278B of the Income Tax Act, 1961. The Revenue/Department appealed against this decision.

2. The accused, including the Managing Director treated as the Principal Officer of the Company, were discharged by the trial court based on the argument that the identification of the Principal Officer was incorrect as per Section 2(35) of the Act. The High Court upheld this decision, leading to various submissions by the counsels representing the parties regarding the accused being treated as the Principal Officer.

3. During the proceedings, the Senior Advocate for Respondent No.2 expressed no objection if the orders discharging the accused were set aside, and the trial proceeded further while considering all defenses available to the accused. Consequently, the Supreme Court quashed the orders discharging the accused and directed the trial to proceed in accordance with the law, ensuring all defenses available to the accused were considered.

4. The Supreme Court instructed the trial court to complete the trial within 12 months from the date of the order, emphasizing that all defenses available to the accused should be evaluated based on the evidence presented. The Appeals were allowed with these directives, ensuring a fair and timely trial process in the case.