1973 (11) TMI 9 - HC - Income Tax

Prosecution proceedings for non-production of books without issue of notice under section 142 - when does the question of reasonable cause for the non-production of books arise - when the books were not produced and the assessee does not give any reason for the non-production, there is no question of reasonable cause for the non-production - Failure to issue a notice under section 142 does not bar a prosecution

Summary

Issues Involved:
1. Non-production of account books.
2. Making a false statement under section 193 of the Indian Penal Code.
3. Conviction under section 276(1)(c) of the Income-tax Act.

Detailed Analysis:

1. Non-production of Account Books:
The petitioners, a partnership firm and its managing partner, were required to produce account books for the years 1961-1966. The Income-tax Officer (P.W. 1) found discrepancies in the day book (Exhibit P-7) for 1963, which contained an entry from 1965, suggesting it was written later. Notices were issued under section 142(1) of the Income-tax Act to produce all account books. The petitioners produced some books but claimed they had no others. However, evidence showed they had other books signed by Commercial Tax Officers that were not produced, indicating intentional non-compliance.

2. Making a False Statement under Section 193 of the Indian Penal Code:
The petitioners stated under oath (Exhibit P-22) that they had no other account books, which was found to be false. The District Magistrate and Sessions Judge confirmed that the petitioners had other books signed by tax officers, which were not produced. This false statement was made intentionally, fulfilling the criteria for conviction under section 193 of the Indian Penal Code.

3. Conviction under Section 276(1)(c) of the Income-tax Act:
The prosecution established that:
1. A notice was issued to produce account books.
2. The notice was served.
3. The petitioners failed to produce the books without reasonable cause.
4. The books existed and were not produced intentionally.

The court concluded that the petitioners had other account books, which were not produced despite being called upon. The non-production was without reasonable cause or excuse, leading to a conviction under section 276(1)(c) of the Income-tax Act.

Judgments Delivered:
- The District Magistrate convicted the firm and its managing partner under both sections, imposing fines and imprisonment.
- The Sessions Judge affirmed the findings, confirmed the fines, and reduced the imprisonment to one day till the rising of the court.
- In revision, the High Court confirmed the convictions but reduced the fine under section 193 to Rs. 500 with a default sentence of two months' simple imprisonment, while maintaining the fines under section 276(1)(c).

The criminal revision case was dismissed with the modification in the sentence, and any excess fine collected was ordered to be refunded.