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TMI Blog2004 (6) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... By the impugned judgment (dated February 27, 1996) in C.C. No. 116 of 1990, the Judicial Magistrate No. 1, Poonamallee, has acquitted the accused, Uma Rani, the wife of Arumugam, under sections 181, 193 of the Indian Penal Code read with section 136 Income-tax Act, sections 276C(1) and 277 of the Income-tax Act, in C.C. No. 116 of 1990. C.A. No. 838 of 1996: By the impugned judgment (dated February 27, 1996), in C.C. No. 117 of 1990, the Judicial Magistrate No. 1, Poonamallee, has acquitted the accused, Arumugam and Uma Rani, under sections 181, 193 read with section 136 of the Income-tax Act, sections 276C(1) and 277 Income-tax Act in C.C. No. of the 117 of 1990. The respondents/accused in both the appeals are husband and wife. Since common points for consideration are involved, both the appeals are taken up together and disposed of by this common judgment. The facts which led to the present appeals could be stated thus: A search under section 132 of the Income-tax Act, 1961, was organised on January 28,1982, in the case of S. Arumugam, No. 35, 1st Main Road, Chromepet, Madras-44, on the strength of warrants issued by the Commissioner of Income-tax, Tamil Nadu-IV. On th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plea raised by the respondents/accused is that the departmental proceedings ended favourably and hence pleaded for absolving of their criminal prosecution also. Upon consideration of the evidence adduced by the Department and the defence plea and relying upon Uttam Chand v. ITO [1982] 133 ITR 909 (SC), the trial court has acquitted the accused, finding that there was no intention on the part of the accused to defraud the Department. The learned trial magistrate further held that there was no attempt by the accused to evade the tax and on this finding, both the accused were acquitted. Aggrieved over the order of acquittal, the Department has preferred these appeals. Placing reliance upon many decisions, the learned Special Public Prosecutor has submitted elaborate arguments, contending that the trial court has not approached the evidence with proper perspective and that the trial court has misdirected itself on every issue and the reasonings for acquittal are unsustainable. It is the further contention that only when the penalty is cancelled under section 273A of the Income-tax Act, criminal proceedings cannot be maintained and in all other instances, the criminal proceedings are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing an appeal against an order of conviction. But the court will not interfere with an order of acquittal solely because a different plausible view may arise on the evidence and the court thinks that the view taken by the trial court of the evidence is not correct. In other words, the court must come to the conclusion that the view taken by the trial judge while acquitting cannot be the view of a reasonable man on the materials on record. The court of appeal must examine the reasons on which an order of acquittal is based and must reach the conclusion that the view taken by the acquitting judge was clearly unreasonable. If the evaluation of the evidence made by the courts below while recording an order of acquittal does not suffer from any illegality or manifest error and the grounds on which the said order of acquittal is based are not unreasonable, then the High Court should not disturb the order of acquittal." Bearing in mind the above principles, we may proceed to consider whether the case in hand is within the above parameters fixed for interference with the order of acquittal. The respondents/accused are alleged to have made false statements during the search under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 277, the prosecution is required to establish that the accused made a statement in any verification under the Act which he either knows or believes to be false, or does not believe to be true. Wilful attempt to evade any tax, penalty or interest chargeable or imposable under the Act under section 276C is a positive act on the part of the accused which is required to be proved to bring home the charge against the accused. Similarly, a statement made by a person in any verification under the Act can be an offence under section 277 if the person making the same either knew or believed the same to be false or did not believe it to be true. Necessary mens rea, therefore, is required to be established by the prosecution to attract the provisions of section 277 or section 276C. Section 132 of the Income-tax Act deals with search and seizure and subsection (4A) thereof stipulates that where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found to be in the possession or control of any person in the course of a search, then it may be presumed that such books of account or other documents belong to such person and that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities would find concealment of income by holding that the asseesees were not inclined to disclose about the bank lockers. Accordingly, it cannot be concluded that there was an attempt to evade payment of tax, etc. The point is, whether the act of attempt is complete or not and this depends upon the facts and circumstances of each case. In the instant case, there was ample time to file the return and there was chance for the respondent to explain about the amount seized by adducing cogent and convincing evidence. Even before filing the return, it cannot be anticipated that he would not explain and, accordingly, it cannot be presumed that the respondent attempted to evade tax, etc. Thus, even before the act of attempt to evade is started, on a mere anticipation or contemplation that there was possibility of accruing liability after finalization of regular assessment proceedings, it cannot be said that the respondents are liable for conviction under section 276C(1) of the Income-tax Act. The search was only under section 132 of the Income-tax Act and the statements are alleged to have been made during the search. The accused were yet to be assessed; they still had time t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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