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TMI Blog2020 (2) TMI 961X X X X Extracts X X X X X X X X Extracts X X X X ..... on 11.03.2007, as debt, to the present applicant on the assurance that the money shall be returned exactly after one month. The same was not returned as promised but a cheque No.144194 to the tune of Rs.8.75 Lakhs was issued by the present applicant, which he drew from his bank account of Punjab National Bank, Jwalapur, District Haridwar. The said cheque was submitted by the respondent for collection, however, the bank had returned the same with endorsement that "account was closed". In the memo of the bank, it was also mentioned that the cheque was also returned because it exceeded the arrangement. The respondent sent a notice under Section 138(b) of the Act, 1881 on 17.04.2007, which was presumed served upon the present applicant but payment was not made to the respondent. Therefore, the respondent filed the complaint on 09.05.2007. 3. The Special Judicial Magistrate, Haridwar, in that Complaint Case No. 1371 of 2007 titled as Vinod Kumar Vs. Alok Verma, took the cognizance on 16.05.2007 for the offence punishable under Section 138 of the Act, 1881. The present applicant challenged the said cognizance order dated 16.05.2007, through Criminal Misc. Application No.669 of 2007, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heque No.144194, was given and the said cheque was presented in the concerned bank, but the bank intimated that the account was closed; thereafter, the respondent-complainant filed the said complaint; since the said amount of Rs.8.75 Lakhs was given in cash as alleged by the respondent-complainant in the complaint, therefore, in the light of the provisions of Section 269SS of the Income Tax Act, 1961 (hereinafter referred as, "the Act, 1961"), the impugned summoning order dated 16.01.2013 is bad in law. 5. The learned counsel appearing for the respondent submits that a loan transaction which is in violation of Section 269SS of the Act, 1961 would not be void, however, the penalty is provided under Section 271D of the Act, 1961 against the breach of Section 269SS of the Act, 1961. 6. Heard Mr. Rakesh Thapliyal, learned Senior Counsel assisted by Ms. Neeti Rana, learned counsel for the applicant and Mr. Gaurav Singh, learned counsel for the respondent, perused and gone through the record. 7. Mr. Rakesh Thapliyal, learned Senior Counsel submits that since the amount of Rs.8.75 Lakhs was given in cash as alleged by the respondent in the complaint, therefore, in the light of the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken or accepted are both having agricultural income and neither of them has any income chargeable to tax under this Act. Explanation.- For the purposes of this section,- (i) "banking company" means a company to which the Banking Regulation Act, 1949 (10 of 1949), applies and includes any bank or banking institution referred to in section 51 of that Act; (ii) "co-operative bank" shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949); (iii) "loan or deposit" means loan or deposit of money." 10. In the case of Assistant Director of Inspection Investigation Vs. A.B. Shanthi, (2002)6 SCC 259, the Hon'ble Apex Court observed that the object of introducing Section 269SS is to ensure that a taxpayer is not allowed to give false explanation for his unaccounted money, or if he has given some false entries in his accounts, he shall not escape by giving false explanation for the same. During search and seizures, unaccounted money is unearthed and the taxpayer would usually give the explanation that he had borrowed or received deposits from his relatives or friends and it is easy for the so-called lender also to manipulate his records later to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beyond Rs.20,000/-. 15. Mr. Rakesh Thapliyal, learned Senior Counsel placed reliance on the Judgment in Krishna Janardhan Bhat Vs. Dattatraya G. Hegde, (2008)4 SCC 54. In this case, the Hon'ble Supreme Court observed, "The courts below failed to notice that ordinarily in terms of Section 269SS of the Income Tax Act, any advance taken by way of any loan of more than Rs.20,000/- was to be made by way of an account payee cheque only. 16. In Rangappa Vs. Sri Mohan, (2010)11 SCC 441, the Hon'ble Supreme Court had specifically noticed the judgment in Krishna Janardhan Bhat (Supra) and yet the Hon'ble Supreme Court accepted the case of the complainant who claimed to have made an advance of Rs.45,000/- in cash and proceeded to uphold the conviction, even though the case rested on the fact that cash advance of a sum more than Rs.20,000/- was made. Therefore, on this aspect, Krishna Janardhan Bhat (Supra) stood impliedly overruled by the Hon'ble Apex Court. 17. Under Section 139 of the Act, 1881, there is a presumption in favour of the holder. Section 139 of the Act, 1881, stipulates that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised. (1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. (2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. (3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code. (5) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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