2024 (12) TMI 323 - HC - Income Tax

Proceedings initiated u/s 120B r/w section 420, 467, 468 and 471 of the Indian Penal Code - Family conspiracy to cheat the Income Tax Department - A1 namely the brother of the petitioner is the Income Tax Consultant and he had employed number of persons to assist him in his consultancy business. The petitioner is a Secondary Grade Teacher and has studied Income Tax related special course, without obtaining the permission from the department. A1, A2 and A3 conspired together and collected particulars of the numerous persons and they manipulated their signature and obtained the income tax refund amount and swindled the amount by making credit in their own account and there was a deposit in the petitioner's account also HELD THAT - Admittedly, in the petitioner's account, there is a fraudulent entry of Rs.21,83,150/-. His digital signature also was used by A1. The entire family members namely, A1, A2 and A3 swindled the income tax amount. They have contrived scientific fraud in withdrawing the refund of Income Tax amount belonging to other tax payers, which is clearly revealed from the approvers statements. In the said circumstances, this Court need not go into further deliberation on the argument of the learned counsel appearing for the petitioner. If any further deliberation is made, it would affect the defence of the petitioner, during the course of the trial. Hence, this Court is not inclined to quash the petition by making the detailed deliberation on the defence raised by the petitioner in his written submission and oral submission. As rightly pointed out by the second respondent's counsel that on the basis of the judgment of 2009 (4) TMI 906 - SUPREME COURT and 2014 (2) TMI 1399 - SUPREME COURT , this Court has no jurisdiction to entertain the defence of the accused at this stage. More over, in this case, prima facie case is made out by the CBI for framing the charges against the petitioner. More particularly, the digital signature of the petitioner was misused by A1 and deposit of amount of Rs.21,83,150/- in his account is found and the petitioner in this quash petition, also admitted that without obtaining permission, he had undergone the course of the income tax Department. These incriminating circumstances are sufficient to frame the charges against the petitioner and hence, this Court is not inclined to entertain the quash petition at this stage. Criminal Original Petition is dismissed. The Petitioner is at liberty to raise all the points before the learned Chief Judicial Magistrate, Madurai, and substantiate his defence during the course of the trial.

Summary

Issues:
Petition to quash proceedings under Sections 120B, 420, 467, 468, and 471 of the Indian Penal Code and Prevention of Corruption Act, 1988.

Analysis:
The petitioner, accused No.2, sought to quash proceedings initiated against him for alleged offenses involving conspiracy, cheating the Income Tax Department, and swindling a substantial amount. The prosecution alleged that the petitioner, along with other accused, conspired to manipulate income tax refund amounts, involving misuse of digital signatures and depositing funds in the petitioner's account. The CBI filed a supplementary final report against the petitioner, leading to the present petition.

The petitioner contended that he was not involved in the offenses and highlighted lapses in the investigation, alleging bias and illegal conduct by the investigating agency. He argued that no offenses were established against him and sought to quash the proceedings. Additionally, he claimed that he was falsely implicated, presenting evidence of a demand for bribe by a CBI officer to clear him of criminal charges.

The Special Public Prosecutor for the CBI argued that there was substantial evidence against the petitioner, including the misuse of his digital signature and significant funds deposited in his account. It was asserted that the petitioner's defense required a full-fledged trial, and the court should not assess the defense at this stage.

The counsel for the Income Tax department supported the CBI's submissions, emphasizing the petitioner's involvement in cheating the department and misappropriating funds. Referring to relevant Supreme Court judgments, it was argued that there was adequate material to prosecute the petitioner.

After considering the submissions and precedents, the court found incriminating circumstances against the petitioner, such as the fraudulent entry in his account, misuse of his digital signature, and his unauthorized pursuit of an income tax course. The court held that these circumstances were adequate to frame charges against the petitioner. Consequently, the court dismissed the petition, directing the petitioner to present his defense during the trial before the Chief Judicial Magistrate, Madurai, without considering the defense raised in the quash petition.

In conclusion, the court dismissed the Criminal Original Petition, allowing the petitioner to assert his defense during the trial and instructing the Chief Judicial Magistrate to consider his submissions in accordance with the law, independent of the observations made in the quash petition.