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TMI Blog1997 (2) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... erprises (P.) Ltd. of which company he himself was the managing director. It was found in the assessment proceedings of Dillu Cine Enterprises (P.) Ltd. that actually an amount of Rs. 1,00,000 was paid to the respondent-accused under the head " building account additions ". When explanation was sought, the respondent-accused replied that, on April 18, 1984, he had transferred his share of Dillu Cine Enterprises (P.) Ltd. to one Mr. P. K. Ramaiah and before that he did not charge his fees as an architect being its shareholder and the managing director but at the time of changing over of the management, he demanded his fees of Rs. 1,00,000 out of which Rs. 50,000 was paid to him in cash on April 3, 1984, and an amount of Rs. 50,000 was credited in the account of his proprietorship concern styled as K. A. Siddique and Associates and only on receiving the advice, the remaining amount of Rs. 50,000 was to become taxable and, therefore, it was not shown in the relevant return. He filed a revised statement of income showing the said amount of Rs. 50,000. He was assessed accordingly but the explanation was not accepted by the complainant-Income-tax Officer and for suppressing the income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the respondent-accused and the Income-tax Officer as also the order of penalty and the modified assessment order dated November 2, 1992, are also relevant and material and, therefore, they should also be taken on record as additional evidence. The letters dated March 5, 1992, and January 27, 1992, are private documents and they may require proof by oral evidence whereas the certified copies of the orders passed by the appellate court on December 21, 1995, on March 30, 1992, and on January 21, 1992, are public documents and they have been passed by the complainant and their superior officers. These orders appear to be material and important and the cause for not filing them before the trial court appears to be reasonable and sufficient. The interests of justice demands that these documents may be taken on record for doing substantial justice to the parties to the appeal. Simply because the appellant has preferred further appeal against the appellate order dated December 21, 1995, and which appeal is pending, it is no ground to reject the application for additional evidence. What value is to be attached to these orders is altogether a different matter. Under these circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the respondent-accused that, as no advice had been received by him from Dillu Cine Enterprises (P.) Ltd., that the remaining amount of Rs. 50,000 of remuneration has been shown in its account books as paid by adjustment, he had not shown that amount of Rs. 50,000 in his income-tax return, exhibit P-3, but immediately on receipt of the advice, a revised statement of income has been submitted before the assessing authority to take into consideration as income for the year 1985-86 and it was accordingly accepted. This amount had also been shown in the income-tax return for the subsequent year voluntarily and when this amount had been accepted as income for the previous year, the respondent-accused had furnished a revised assessment for the year 1986-87, deleting the amount of Rs. 50,000 as income from profession and it was also accepted by the assessing authority. The penalty imposed had been set aside by the Commissioner of Income-tax (Appeals), holding that there was no wilful suppression of income and, therefore, the prosecution itself has become bad in law. In the case of B. Ravindra Kumar v. ITO [1989] 175 ITR 568 (AP), the petitioner had failed to show the agricu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much more onerous burden on the Department to prove their case of concealment of income and other charges in the criminal proceedings. " In the case of Mohamed I. Unjawala v. Asst. CIT [1995] 213 ITR 190 (Mad), it is held that the findings of the Tribunal on the facts are final and the High Court has no jurisdiction to go behind the statements of fact made by the Tribunal. Therefore, the criminal court is bound to accept the findings of the Tribunal on questions of fact. When the Tribunal in the penalty proceedings gives a finding against the assessee, who is facing criminal prosecution, he cannot be convicted on the basis of the findings of the Tribunal because the criminal court has to follow the procedural law for trying an offender according to the Criminal Procedure Code, 1973, and, therefore, the High Court cannot deviate from the Code for the reason that a finding has been arrived at by the authorities under the Income-tax Act, 1961. But the facts found by the Tribunal in favour of the assessee cannot be disturbed by the High Court as the Tribunal is the fact-finding authority. In this case, the Tribunal had held in the penalty proceedings that the assessees did not inten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultimate income-tax authority is conclusive and binding on the criminal court. But an assessee cannot be convicted merely on the basis of the finding recorded against him by the ultimate assessing authority. It is necessary for the prosecution to establish mens rea which is an essential ingredient for the offence under sections 276C and 277 of the Act. The question that looms large for consideration is whether the respondent-accused had wilfully attempted to evade payment of income-tax and had falsely verified the income-tax return for the assessment year 1985-86 ?. P.W.-1 has assessed the income of the respondent-accused for the assessment year 1985-86. He has testified that in the income-tax return, exhibits P-3, the respondent-accused has put his signature. Instead of showing correctly that Dillu Cine Enterprises (P.) Ltd., had paid him an amount of Rs. 1,00,000 as his remuneration, he had shown an income of Rs. 50,000 only. When this fact was detected, the respondent gave an unacceptable explanation that regarding the adjustment of the amount of Rs. 50,000 he had no knowledge because no advice was sent to him by the managing director of Dillu Cine Enterprises (P.) Ltd., sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccused-respondent had the knowledge about the payment by adjustment on April 18, 1984. There is no iota of evidence on record that subsequent to the payment by adjustment, vide the entries in the cash book, exhibit P9-a, the advice was sent to the accused-respondent before he had signed and submitted the return of income-tax for the assessment year 1985-86. Under these circumstances, the defence of the respondent-accused cannot be brushed aside that he did not receive the advice before submitting the return of income-tax for the assessment year 1985-86. From a perusal of the order passed by the Commissioner of Income-tax (Appeals)-IV, Hyderabad, dated December 21, 1985, it is clear that it has not only referred to a relevant portion of the judgment of acquittal passed by the trial court but has also mentioned in para 1.2 of its order that the Assistant Commissioner of Income-tax had issued a letter to the respondent relating to levy of penalty that the accused-respondent should pay the amount of Rs. 2,37,522 immediately and should intimate the withdrawal of appeal forthwith before his application for dropping the penalty proceedings could be considered. Thereafter, the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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