2024 (12) TMI 119 - HC - Income Tax

Charge u/s 277 of the Income Tax Act - petitioner had consciously furnished wrong statement knowingly or at least having reason to believe it to be false and committed the offence under section 277 of Income Tax Act, 1961 - scope of mens rea i.e. culpable mental state - sanction for prosecution of the petitioner was obtained from the Commissioner of Income Tax, Dhanbad - petitioner had taken a specific stand that one Satyaban Roy also an employee of Mugma Open Cast Area who deals with affairs of accounts had taken his signatures and signatures of his wife on several income tax forms and also on blank papers and he claimed himself to be illiterate and uneducated. HELD THAT - Section 278E of the Income Tax Act clearly provides that in any prosecution under the Income Tax Act, which requires a culpable mental state on the part of the accused, the court shall presume the existence of such culpable mental state , but it shall be a defence for the accused to prove the fact that the accused had no such culpable mental state with respect to the act charged as an offence in that prosecution - if the accused has to prove a fact to dislodge the presumption under Section 278E of the Income Tax Act, the accused has to prove the fact in such a manner that the court believes it to exist beyond reasonable doubt and such a presumption of culpable mental state cannot be dislodged by mere preponderance of probability . This Court finds that in the present case, the foundational facts to convict the petitioner have been duly proved by the prosecution. The learned courts have rightly relied upon the legal presumption of culpable mental state on the part of the petitioner in terms of Section 278E of the Income Tax Act. Nothing credible has been brought on record by the petitioner to dislodge the presumption of culpable mental state . The petitioner was required to prove his case beyond all reasonable doubts and not on the touchstone of preponderance of probabilities , which the petitioner has failed to do. This Court is of the considered view that both the learned courts have duly considered the materials and attending facts on record and also the provisions of law and have recorded concurrent findings while convicting the petitioner for the offence under Section 277 of the Income Tax Act, 1961. There is no perversity, illegality or material irregularity in the impugned judgments and therefore, there is no scope for reappreciation of materials and coming to a different finding under revisional jurisdiction. Accordingly, the impugned judgements of conviction and sentence do not call for any interference. Compoundable nature of the offence as raised under the grounds in the criminal revision petition is concerned, the learned counsel for the Income Tax Department has no instruction in the matter and the petitioner is also not present before this Court to pursue the matter. Considering the totality of the facts and circumstance of the case, this Court finds no merit in this criminal revision petition, which is hereby dismissed. Bail bond furnished by the petitioner is cancelled.

Summary

Issues Involved:
1. Legality and validity of the judgments passed by the trial and appellate courts.
2. Failure of prosecution to establish charges against the petitioner.
3. Alleged ill-motivation of the prosecution case.
4. Mens rea and culpable mental state of the petitioner.
5. Compoundable nature of the offence under the Income Tax Act.

Detailed Analysis:

1. Legality and Validity of Judgments:
The petitioner challenged the judgments of the trial court and appellate court, claiming they were illegal, perverse, and perfunctory. The petitioner argued that both courts failed to exercise jurisdiction judiciously, leading to a judgment that suffers from illegality. However, the High Court found that both lower courts had duly considered the materials on record and had recorded concurrent findings regarding the petitioner's false refund claim based on forged documents. The High Court upheld the judgments, finding no perversity, illegality, or material irregularity.

2. Failure of Prosecution to Establish Charges:
The petitioner contended that the prosecution failed to establish charges, as the complainant did not support the case. The High Court noted that the prosecution had presented sufficient evidence, including the petitioner's admission of his signature on the income tax return and the forged nature of the TDS certificate and housing loan claim. The prosecution's evidence was deemed credible and consistent, leading to the petitioner's conviction under Section 277 of the Income Tax Act.

3. Alleged Ill-Motivation of the Prosecution Case:
The petitioner argued that the prosecution case was ill-motivated, as a simple colliery worker was not expected to be an expert in filling technical forms. The petitioner claimed to have relied on an office assistant for filling the forms. The High Court found that the petitioner had knowingly furnished false particulars and had admitted his signature on the return. The court rejected the petitioner's argument, emphasizing that the law does not permit such excuses and that the petitioner bore the risk of signing the documents.

4. Mens Rea and Culpable Mental State:
The petitioner argued that there was no mens rea, as any lapses were technical and without intent to evade tax liability. The High Court referred to Section 278E of the Income Tax Act, which presumes a culpable mental state unless the accused proves otherwise beyond reasonable doubt. The court found that the petitioner failed to dislodge this presumption, as he did not present credible evidence to prove his lack of culpable mental state. The court concluded that the petitioner had consciously furnished false statements.

5. Compoundable Nature of the Offence:
The petitioner raised the issue of the compoundable nature of the offence. However, the High Court noted that the petitioner's counsel had no instructions on this matter, and the petitioner was not present to pursue it. Consequently, the court did not address this issue further.

Conclusion:
The High Court dismissed the criminal revision petition, upholding the concurrent findings of the lower courts. The court found no merit in the petitioner's arguments and emphasized the importance of dealing severely with such offences to prevent economic disruption. The petitioner's bail bond was cancelled, and the pending interlocutory application was closed.