1972 (7) TMI 26 - HC - Income Tax

These seven petitions being Criminal Revisions Nos. 49 to 55 of 1971, result from the recommendation made by an Additional Sessions Judge, Delhi u/s 438 of the Criminal Procedure Code that the sentences awarded to the respondents be enhanced so as to make them in conformity with the provisions of section 276B - Whether it is necessary to state particulars of each deduction from each employee and date of deduction in the notice regarding prosecution for failure to deposit the tax deducted amount with Central Government in time - whether an offence under s. 276B is committed, when deduction was made before 1st April 1968 and not deposited by that date

Issues Involved:
1. Validity of the complaints filed.
2. Application of Section 247 of the Code of Criminal Procedure (CrPC).
3. Application of Sections 242 and 247 of the CrPC.
4. Competence of orders summoning the accused.
5. Applicability of Section 276B of the Income-tax Act.
6. Compliance with Section 234 of the CrPC.
7. Imposition of sentences under Section 276B of the Income-tax Act.

Issue-wise Detailed Analysis:

1. Validity of the Complaints Filed:
The respondents contended that the complaints were not validly instituted as they should have been filed by the Commissioner of Income-tax, not by the Income-tax Officers. Section 279(1) of the Income-tax Act mandates that proceedings for certain offences can only be initiated at the instance of the Commissioner. The Supreme Court in T. S. Baliah v. T. S. Rangachari clarified that "at the instance of the Commissioner" means "on his authority," and it is sufficient if the complaint is filed by an authorized officer. However, the complaints were presented by counsel, not directly by the complainants, raising questions about the delegation of authority. The court noted that this objection was not raised at the trial stage, and if it had been, evidence could have been provided to prove the authority of the counsel.

2. Application of Section 247 of the CrPC:
Section 247 of the CrPC mandates that if the complainant does not appear on the appointed date, the Magistrate shall acquit the accused unless the hearing is adjourned. The court found that the trial records did not show the presence of either the complainant or their counsel on the dates when the accused appeared, which should have led to acquittal or adjournment with recorded reasons.

3. Application of Sections 242 and 247 of the CrPC:
Section 242 requires the Magistrate to state the particulars of the offence to the accused. In these cases, the particulars were not adequately stated, and the complainants or their counsel were often absent. The court noted that stating particulars to the counsel of the accused instead of the accused themselves (unless the accused is a juridical person) is not compliant with Section 242.

4. Competence of Orders Summoning the Accused:
The orders summoning the accused did not specify the offences for which they were summoned, which is a requirement under Section 204 of the CrPC. The court concluded that while this omission does not necessarily vitiate the trial, it is a procedural irregularity that should have been addressed.

5. Applicability of Section 276B of the Income-tax Act:
Section 276B, effective from 1st April 1968, mandates rigorous imprisonment and a fine for failure to deduct or pay tax. The court found that the defaults persisted after the section came into force, making the accused liable under Section 276B. However, the trial court did not distinguish between defaults before and after the section's applicability, leading to improper convictions under both Sections 276(d) and 276B.

6. Compliance with Section 234 of the CrPC:
Section 234 allows for the trial of multiple offences of the same kind committed within a year. The court noted that each deduction and failure to deposit tax constituted a separate offence, and the complaints did not specify these offences, leading to a violation of Section 234. The complaints were omnibus allegations rather than specific charges.

7. Imposition of Sentences under Section 276B of the Income-tax Act:
Section 276B mandates rigorous imprisonment and a fine, which cannot be imposed on juridical persons like companies. The trial court's imposition of fines and imprisonment in default of payment was inappropriate for companies. The court emphasized that the provision leaves no discretion for alternative sentencing.

Conclusion:
The court found that the trials were vitiated by significant procedural and legal irregularities, including the improper institution of complaints, non-compliance with Sections 242 and 247 of the CrPC, and the inappropriate application of Section 276B of the Income-tax Act. Consequently, the convictions in all seven cases were set aside.

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