9911796707
TMI Blog1987 (6) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... iled his returns in which he had shown the closing stock as on December 31, 1976, as Rs. 10,36,384.75. According to the Income-tax Officer, the aforesaid return contained incorrect and untrue statements and by filing a false return of income, the respondent wilfully attempted to evade the tax payable by him under the Act. The basis for the said allegation is that when a search was conducted by the income-tax authorities on January 12, 1977, the inventory of the stock as on December 30, 1976 was obtained from exhibits P-2 and P-3 books of account. The inventory revealed the closing stock as on December 30, 1976, as Rs. 12,17,725,72. The Income-tax Officer, who conducted the search, recorded the statement of the respondent which is marked in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o proceed against the respondent for the offences. But the trial Magistrate was not prepared to act on the said proceeding as the complainant had not gone to the witness box to swear about the complaint and to prove the sanction accorded by the Commissioner of Income-tax. As per section 279(1), " a person shall not be proceeded against for the said offences except at the instance of the Commissioner ". The Chief judicial Magistrate who received the complaint on file would naturally have verified whether the complaint was at the instance of the Commissioner. The proceedings of the Commissioner of Income-tax had been produced along with the complaint and the same would have reached the notice of the magistrate who received the complaint and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there was no formal proof of sanction, cannot be sustained. The contention of learned counsel for the respondent is that the trial court should have acted on the closing stock as revealed from exhibits P-2 and P-3 account books seized from the shop of the respondent as there is a presumption of truth of the entries therein. He also pointed out that the presumption of truth drawable from those entries is fortified by exhibit P-1 statement given by the respondent to the Income-tax Officer who made the search. Learned counsel tried to draw support from section 132(4A) of the Act wherein it is provided that the contents of the books of account found in the possession of any person in the course of a search may be presumed to be true. Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt which he has shown in the return. It must be borne in mind that when the respondent filed exhibits P-4 and P-5 returns, the account books seized from him earlier were in the custody of the income-tax officials. That shows that P.W. 1 had knowledge about the stock as per the entries in those account books and hence it cannot be said that the true state of affairs was kept concealed by the respondent. Simply because the respondent gave a statement in exhibit P-1 admitting the correctness of the entries in exhibits P-2 and P-3, it cannot be said that the respondent is estopped from informing the income-tax officials that his earlier statement was vitiated by mistakes. P.W. 2 admitted that he has not checked the correctness of the entries c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs in the light of an order passed under the Act ". Of course, the Supreme Court pointed out that it does not mean that the result of a proceeding under the Act would be binding on the criminal court, as the criminal court has to judge the case independently on the evidence placed before it. At the same time, a sound rule of procedure is indicated in the said judgment that (p. 702) " it may be that in an appropriate case, the criminal court may adjourn or postpone the hearing of a criminal case in exercise of its discretionary power under section 309 of the Cr.P.C. if the disposal of any proceeding under the Act which has a bearing on the proceedings before it is imminent so that it may take also into consideration the order to be passed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. It was held by the High Court that the findings of the income-tax Appellate. Tribunal are not binding on the criminal court. But the Supreme Court reversed the judgment of the High Court. In the short judgment passed by the Supreme Court, their Lordships observed as follows: " In view of the finding recorded by the Income-tax Appellate Tribunal that it was clear on the appraisal of the entire material on the record that Shrimati Janak Rani was a partner of the assessee-firm and that the firm was a genuine firm, we do not see how the assessee can be prosecuted for filing false returns. We, accordingly, allow this appeal and quash the prosecution. Strong reliance was placed on the above decision by learned counter for the respondent. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
