TMI Blog1957 (9) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... en assessed to income-tax all along since 1942. During the course of assessment for the year 1950-51 it was discovered that he had failed to pay advance income-tax. A notice was therefore issued to him on March 24., 1951 under s. 28 read with s. 18-A (2) of the Incometax Act. to show cause why a penalty should not be. imposed for underestimating his income. For the assessment year 195152 also the complainant in the usual course filed his return on August 11, 1951 and on a notice being issued to him produced his accounts before the Income-tax Officer on September 27, 1951. He again appeared before him on the 28th and the respondent told him that the penalty papers had. not been disposed of and that the accounts of the current year had also not been gone through and asked the complainant to see him at his house on the following morning, which the complainant did. There he was told by the respondent that if he wanted to have his return accepted and to be helped in the matter of penalty proceedings he should pay the respondent ₹ 1,000 as illegal gratification. The complainant mentioned this fact to his manager and also that he had been told by the Income-tax Officer that his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant was given 8 one hundred rupee notes by the Inspector and the complainant paid them to the respondent on the morning of November 17 at the latter s house. On this occasion the complainant accompanied by his manager P. W. 14 had gone towards the house of the respondent along with the Magistrate and Circle Inspector and Venkates, lyer 584 P. W. - 14 in a car which was stopped three or four blocks away from the house of the respondent and only the complainant and his manager went into the respondent s house and paid the money. Two or three minutes later the Inspector P. W. 12 and the Magistrate P. W. 13 and one Sesha Ayyar who had joined the party en route also came into the house on receiving the signal from the complainant. They disclosed their identity to the respondent and told him that they had information that he had received ₹ 800 from the complainant as illegal gratification and asked him to produce the money which he had received from the complainant. The respondent did not say anything and got up from the chair on which he was sitting and tried to go into the house but was prevented from doing so by the Inspector and he then produced the money from the folds of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Single Judge reversed the judgment and acquitted the respondent. It will be convenient to give here the main findings of the learned judge in his own words: (i) It is true that at the time when the money was accepted by The accused, the proceedings in relation to assessment of income tax on P. W. 8 were pending before the accused. Naturally, therefore, if in such circumstances, the accused should receive money from an assessee, the suspicion is readily aroused that the money must have been paid only as an illegal gratification. On going through the judgment of the learned trial Judge, I formed the impression that he was totally influenced by such suspicion. (ii) The result is that if the version of P. W. 8 and that of the accused are balanced, the probability seems to tilt the scale in favour of the accused s version. In any case, the evidence is not enough to show that the explanation offered by the accused cannot reasonably be true, and so, the benefit of doubt must go to him. (iii) But this was not a case of ordinary lendee, but an Income-tax Officer whose favour was needed by the lender. (iv) Evidence shows that in November, 1951, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he judgment of the court pointed out that that was a decision of a bench of three judges and not of a Constitution bench and the observation that there was no provision corresponding to s. 417 of the Criminal Procedure Code only emphasised that this Court should not in appeal by Special Leave interfere with the order of acquittal passed by the High Court merely for correcting errors of fact or of law. Gurviah Naidu s case (A.I.R. 1956 S.C. 158, 161.) was an appeal against a judgment of acquittal and this court reversed the judgment saying:- In our view, the High Court erred in holding that the prosecution had failed to establish their case and in acquitting the accused. This case negatives the contention that under Art. 136 interference by this court with findings of High Courts in judgments of acquittal is not intended. Even in State of Madhya Pradesh v. Ramakrishna Ganpatrao (A.I.R. 1954 S.C. 20.) Mahajan J. was of the opinion that the Supreme Court can interfere where the High Court acts perversely or otherwise improperly or has been deceived by fraud. In Pritam Singh v. The State ([1950] S.C.R. 453. 458.) Fazl Ali J. after a careful examination of Art. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .. ...... there are here no grounds on the evidence, taken as a whole, upon which any tribunal could properly as a matter of legitimate inference, arrive at a conclusion that the appellant was guilty....... was quoted with approval and after an examination of all the facts and circumstances of the case the Supreme Court reversed the judgment of conviction by the High Court under Art. 136. The question for decision in the present case is whether it falls within the limits laid down in the abovementioned cases. This court will not readily interfere with the findings of fact given by the High Court but if the High Court acts perversely or otherwise improperly interference will be called for. The findings of the High Court in the present case are, to say the least, halting, and the approach to the whole question has been such that it falls within what Mr. Justice Mahajan in State of Madhya Pradesh v. Ramakrishna Ganpatrao (A.1.R. 1054 S.C. 20.) described as acting perversely or otherwise improperly . Although the learned High Court Judge has in the beginning of the judgment mentioned the presumption which arises under s. 4 of the Prevention of Corruption Act (II of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Act the respondent was not the Income-tax Officer at Coimbatore but by June 6, he had been posted at Coimbatore and the note on the Penalty File dated June 6,1951: put up proposal to I.A.C. for levy of standard penalty, was made by him. Although this proposal was made on June 6, 1951, it is not clear as to what final orders were passed in these proceedings and when. At least there is nothing to indicate that any intimation was given to the complainant in regard to this matter. The complainant has stated on oath as P.W. 8:- I alone went to the accused on 28th September, 1951. He then told me that the penalty paper was not disposed of and that the accounts for the current year had not also been gone through. On the day following this the respondent asked the complainant for illegal gratification of ₹ 1,000. Counsel for the respondent contended that there was no occasion for the respondent to say anything about the penalty proceedings because as far as he was concerned the recommendation had already been made by him but the real question is whether the complainant was told as to what had happened or had any knowledge of this. He states that he ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... koned from till takings. On October 1, 1951, the assesses had filed his written statement and also some other documents. Nothing more seems to have been done till November 7, when the relevant part of the note on the file is: I have been keeping this in order to compare the results with other nearby hotels. As to why no enquiries could be made in the whole of this period is not clear from the assessment record and it ]ends support to the prosecution case that the respondent was making approaches to the complainant to get money from him. The respondent during the pendency of assessment proceedings of the complainant allowed the complainant to visit him at his house and even paid visit to his cafe. Even according to the findings of the High Court the complainant was needing the favours of the respondent who on his own showing was himself in dire need of a thousand rupees as he had succeeded in collecting only a thousand rupees by November2, and needed twice that amount for his son s premium or security as he chooses to call it. No importance was attached to this aspect of the case by the learned judge of the High Court. In our opinion the learned trial jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not found in the house when the search was made by the Deputy Superintendent of Police on November 19, 1951, and it is not explained why the promote should have been made for ₹ 1,000 when actually the amount paid was only ₹ 800 and why the respondent offered to give this promote to the complainant without receiving full consideration. These salient features of the case do not seem to have been properly appreciated or given due weight to by the High Court and in our opinion the learned judge s approach to the question whether the sum of ₹ 800 was an illegal gratification or a loan is such that the judgment falls within the words of Mahajan J. in Ramakrishna s case (A.I.R. 1954 S.C. 20,), i.e. that the High Court has acted perversely or otherwise improperly. The evidence and the circumstances lead to the conclusion that the transaction was not one of loan but illegal gratification. In view of the finding that the sum of ₹ 800 was a bribe and not a loan it is not necessary to consider whether in this case the loan would be an illegal gratification within s. 4 of the Prevention of Corruption Act (II of 1947) or not. We would, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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