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TMI Blog1991 (5) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... mber 4, 1982, set aside the conviction and sentence. This appeal is by the Income-tax Officer. A criminal complaint was filed by the Income-tax Officer against Krishan Lal Kathuria under section 277 of the Act. The accused, Krishan Lal Kathuria, was carrying on business of manufacturing cast iron under the name and style of Messrs. Indian Castings, Faridabad. Krishan Lal is the proprietor. He had submitted income-tax return on July 29, 1972, for the assessment year 1972-73, accounting year being 1971-72. Along with the return, balance-sheet, profit and loss account, list of sundry creditors and debtors were furnished. The return was verified by Krishan Lal. The Income-tax Officer directed the assessee to file copies of closing stock and cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Officer, and P. W.-4, Shri M. L. Gari, Assistant in the State Bank of India. The accused, while making the statement under section 313, Criminal Procedure Code, admitted to being the proprietor of the firm and having filed the return and other documents. He, how ever, denied for want of knowledge that any information was sought by the Income-tax Officer directly from the bank. He further asserted that the penalty of Rs. 12,000 imposed by the Income-tax Officer was ultimately set aside by the Income-tax Appellate Tribunal in appeal. He pleaded false implication. In defence, he produced five witnesses. Shri A. K. Mittal, the advocate who appeared on behalf of the appellant, has argued that the approach of the learned Sessions judge in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n evaded if the statement or account had been accepted as true, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine; (ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine." The aforesaid provision contemplates two things. Firstly, that a person in his statement in any verification or in any account had made a false statement and, secondly, that he knew or believed that the same was false, or did not believe it to be true. It is on proof of these ingredients that it can be said that he had committed the offence and could be puni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77 of the Act are independent and simply because assessment proceedings were set aside was no ground to set aside the conviction. A perusal of the judgment shows that the decision of the Supreme Court in P. Jayappan v. S. K Perumal [1984] 149 ITR 696, 700 was relied upon and the following passage was quoted therefrom (at page 4) : "In the criminal case all the ingredients of the offence in question have to be established in order to secure the conviction of the accused. The criminal court no doubt has to give due regard to the result of any proceeding under the Act having a bearing on the question in issue and in an appropriate case it may drop the proceedings in the light of an order passed under the Act. It does not, however, mean that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the Magistrate has summoned the accused and thereafter the authorities under the Income-tax Act had set aside the assessment proceedings. It was held that the complaint could still proceed and the prosecution could not be quashed. It may be stated that the ratio of the decision cannot be applied to the case in hand as the prosecution was not required to be quashed at the initial stage. The accused has already been tried and the trial had been completed. Now the question is as to what value, if any, can be attached to the order of the Tribunal. This matter was further considered by S. S. Kang J., in D. N. Bhasin v. Union of India [1988] 171 ITR 7 (P H), After criminal prosecution was launched, the Commissioner (Appeals) deleted the addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the evidence produced to come to the same conclusion. It was rightly observed by the Sessions Judge that by simply showing that there was an error in the return furnished or there was false averment, the conviction of the accused cannot be maintained. There has to be something more, i.e., that such an error or omission was false to the knowledge or belief of the accused. No doubt, the second ingredient is to be proved by raising an inference from a given set of circumstances in a particular case and there may not be any direct evidence as has been argued by counsel for the appellant. However, in the present case, when such a finding has been recorded by the Tribunal in the order, exhibit D.A., which was passed during the pendency of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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