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TMI Blog1972 (7) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... . and Shri B. L. Verma, who was described as secretary-cum-general manager of accused No. 1. In paragraph 1 of the complaint it was stated that the Commissioner of Income-tax, Delhi, had directed the complainant under section 279 of the Act to prosecute the accused. The complainant alleged that the accused who were responsible for paying salaries to their employees were required by section 192(1) of the Act to deduct income-tax at the source which they were under a statutory obligation to deposit within the prescribed period to the credit of the Central Government and that period, it was asserted, according to rule 30(1)(b) of the Income-tax Rules, 1962, was of one week from the date of deduction. In paragraph 6 of the complaint it was alleged that during the financial year 1967-68, the accused had deducted a sum of Rs. 4,586 out of the salaries paid to the employees. No details of the dates of deductions or the names of employees to whom the salaries had been paid were given. Although the tax deducted from the salary of each employee was to be deposited to the credit of the Central Government within the prescribed period instead of stating the details of offences which were as m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the complaint was filed by a public servant in his official capacity, the court dispensed with the personal attendance of the complainant imposing the condition that he was permitted to appear through his counsel. There is no subsequent order on the record disclosing that at any other stage the trial court passed any order of exemption. The afore-quoted order passed on 31st March, 1970, did not accept the request to proceed with the case in the absence of the complainant. Even if an extended meaning is given to the order, the court was to proceed with the complaint only when the complainant was to be present through his counsel. The order did not provide that the complaint was to be tried in the absence of the complainant as well as his counsel. The afore-quoted order was passed as soon as the complaint was presented. Section 247 of the Code which may be noticed is : " 247. If the summons has been issued on complaint, and upon the day appointed for the appearance of the accused, or any day subsequent thereto to which the hearing may be adjourned, the complainant does not appear, the Magistrate shall, notwithstanding anything hereinbefore contained, acquit the accused unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 247 of the Code became applicable at that stage. A notice was given to the accused by the Magistrate on that date, the terms whereof are almost similar in all these cases. It was stated in the notice : " It is alleged against you that you were under a statutory obligation to deduct income-tax from salaries of the employees while making payment and deposit the same within seven days of such deduction in the Government account. It is further alleged that for the financial year 1967-68, a sum of rupees 4,586 was deducted as income-tax from the salaries of the employees but the same was not deposited in Government account within seven days from the date of the deduction but was actually deposited on June 11, 1968. It is further alleged that thereby you are guilty of an offence under section 276(d) read with section 276B of the Income-tax Act, 1961. Therefore, you are required (sic) to show cause why you should not be convicted of the said offence and punished accordingly. Sd. (Manjula Mahajan) Judicial Magistrate, 1st Class, Delhi. Dt. 4-5-70." The notice did not state the particulars as to on which dates salaries were paid to any particular employees and any specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted. With the benefit of the order passed on 31st of March, 1970, allowed to the complainant, he was to appear through his counsel in the course of the proceedings initiated by his complaint. The combined effect of sections 247 and 242 of the Code was that the complainant or his counsel should have been present before the Magistrate at the time when the obligations of section 242 of the Code were to be discharged. On the 4th of May, 1970, when disregarding section 246 particulars of the offence were stated to the accused, in the absence of the complainant and his counsel, Shri B. L. Verma, accused No. 2, made the following statement : " I plead guilty to the offence. It is a technical lapse. The firm have always been regular in paying the tax deducted but it appears due to some mistake of an employee who was responsible for doing it a little delay has occurred. Even before the complaint was filed the entire amount was paid. " Even where a confession is made it is the duty of a court to acquaint itself with the particular provision under which an accused person can be convicted. In complete disregard of section 276B of the Act the trial court recorded the following judgment on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1971 was recorded summoning the accused for 4th May, 1970. Personal attendance of the complainant was similarly exempted with the condition that he was permitted to appear through his counsel. On the 4th May, 1970, sections 247 and 242 of the Code being applicable, accused No. 1 appeared through accused No. 2, Shri B.L. Verma, and the notice given was similar to the one in the former case. For the financial year 1968-1969, it was alleged that Rs. 4,163 had been deducted as income-tax from the salaries of the employees but had not been deposited in the appropriate account within seven days of the dates of the deductions and had been deposited on two separate dates, viz., 16th April, 1969, and 20th September, 1969. The accused were alleged to have committed an offence under section 276B of the Act. The court recorded a similar plea of guilt as noticed in the former case and by its judgment made on the same day convicted the company as well as Shri B.L. Verma under section 276B of the Act passing a sentence of fine of Rs. 25, or in default to undergo simple imprisonment for two days each. On the 4th May, 1970, when particulars of the offence were sought to be stated under section 242 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... salary of which of the employees and on which date any deduction had been made in respect whereof the accused committed the default in not depositing it within the prescribed period to the credit of the Central Government. It was alleged that during the financial year 1967-68, the sum of Rs. 36,632.48 was deducted but not paid in Government account, and that the amounts had been deposited on 5th October, 1967, and 26th October, 1968. The first deposit was before the 1st of April, 1968, and the second thereafter. The accused being absent and the notice having been given to their counsel, Shri J. L. Sabharwal, he made the following statement : " The accused pleads guilty. The amount deducted had actually been paid but a little delay which is only of a few days has occurred due to a regrettable lapse on the part of the employee who was responsible for this job. Before the complaint was filed the entire amount due has actually been deposited and the default is thus merely technical. And the income-tax department has also separately levied penalty for this lapse departmentally. This amount has also been paid. Sd. (Manjula Mahajan) Judl. Magistrate, 1st Class, Delhi. Dt. 6-5-70." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce under section 242 of the Code that during the financial year 1968-69, a sum of Rs. 44,104 was actually deducted but not paid to the Government account and that the deposits had been made as mentioned in column 3 of paragraph 6 of the complaint. It was notified under section 242 of the Code to the accused that they were guilty under section 276B of the Act and they were called upon to show cause against conviction. The accused being absent Shri J. L. Sabharwal, appearing both for Messrs. Printers House (Private) Ltd. as well as for Shri K. D. Kohli, made the following statement : " The accused pleads guilty. The amount deducted had actually been, paid but a little delay which is only of a few days has occurred due to a regrettable lapse on the part of the employee who was responsible for this job. Before the complaint was filed the entire amount due has actually been deposited and the default is thus merely technical. And the income-tax department has also separately levied pealty for this lapse departmentally. This amount has also been paid. Sd. (Manjula Mahajan) Judl. Magistrate, 1st Class, Delhi. Dt. 6-5-70." After recording the statement made by their counsel the tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame within the prescribed period but had actually deposited this amount on 28th March, 1969, and that they had committed the offence punishable under section 276(d) read with section 276 B of the Act. The complaint, it may be noticed, bearing the date 4th April, 1970, was instituted in respect of the deductions made before the 31st of March, 1965. There was a lapse of five years in filing the complaint. The amount had been deposited on 28th March, 1969. No prosecution was, however, launched till the filing of the complaint in April, 1970. As observed in respect of other cases, there being no allegation regarding any specific offence in the complaint, the notice given under section 242 of the Code, did not state as to which were the employees to whom salaries were paid on particular dates from which deductions were made for depositing them to the credit of the Central Government. In the absence of the complainant and his counsel, Shri H.R. Tyagi, accused No. 2, the managing director of accused No. 1, made the following statement : " I plead guilty to the offence. The reason for delay was that the (sic) ciname started in 63 and some of the employees paid the income-tax directly. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 276B of the Act. No particulars were given in the notice describing the employees from whose salaries on any particular dates deductions had been made which were to be deposited to the credit of the Central Government within seven days. The advocate appearing for the accused made the following statements : " 1. I have understood the particulars of the offence as read out to me. On behalf of both the accused I plead guilty. Both the accused have instructed me to plead guilty on their behalf. The complaint was filed actually after the entire amount had already been paid. The delay was due to inadvertence on the part of the employees who were directed to obey all the regulations." The trial court then passed the following judgment : " JUDGMENT : Accused Dina and Gobind Sharan Gupta (sic) has pleaded guilty to the allegations contained in the notice (sic) above voluntarily. I, therefore, hold them guilty under section 276(d)/276B Income-tax Act and sentence them to pay a fine of rupees 25 each or in default to undergo S.I. for 3 days. Out of this half of the amount will go to the income-tax department. Sd. (Manjula Mahajan) Judl. Magistrate, 1st Class, Delhi. 26-5-70." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the date on which it was deductible to the date on which such tax was actually paid. The learned counsel was unable to show after referring to the complaints that it was mentioned therein that a particular deduction out of the salary of a particular employee had been made on a particular date so as to permit the calculations under the second part of section 276B of the Act for imposition of fine which was not to be less than the sum calculated at the rate of fifteen per cent. per annum on the amount of the tax from the date on which it was deductible at the source to the date on which it was actually paid. The complaints did not disclose any basis for imposing the fine contemplated by section 276B of the Act. The scope of section 276B which is now emphasised for supporting the recommendation by the Additional Sessions Judge was never urged before the trial court. As to the imposition of imperative imprisonment, that aspect will be dealt with while disposing of the contentions raised on behalf of the respondents. The first contention raised on behalf of the respondents is that the complaints were not validly instituted. It is submitted that the complaints could have been instit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under section 20 of the Arbitration Act had not been competently instituted, it was observed : " The filing of a petition in court is a positive act which must be done by the parties suing or by some authorised agent. In the present case the authority to file has been given to Walaiti Ram Kohli but P.W. 1 does not say that he in fact filed the petition. On a perusal of the record of the case, I find that it is the counsel for the petitioner who had presented the petition in court. The authority of the counsel has also not been proved inasmuch as the signature on the vakalatnama has not been proved and nobody says on behalf of the petitioner that the vakalatnama in favour of the learned counsel was given by Walaiti Ram Kohli or someone else. Accordingly, I hold that the petition is signed and verified by a duly authorised person, but it has not been proved that it has been instituted by any duly authorised person. " It is submitted on behalf of the respondents that there is no proof that the Income-tax Officers authorised to file the complaints actually executed the powers of attorney in these seven cases in favour of the counsel delegating to him the authority to file the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lainant being absent, the trial court should have either acquitted the accused or recorded an order giving the reasons for adjourning the hearing of the case to some other day. The court could have within the proviso in section 247 of the Code proceeded with the case on recording its opinion as to why the personal attendance of the complainant was not necessary. In order to meet the contention, the counsel for the petitioners has relied on Mool Chand v. State and Premkumar v. State . I do not find that the observations made therein can be availed of. In the first of these citations it is observed : " It is clear from the provisions of this section that if the summons has been issued on complaint and a date is fixed for appearance of the accused, then the complainant must also appear on that day. If the hearing is adjourned to any subsequent date, then on such date also the complainant should appear and if he fails to do so, then the Magistrate should acquit the accused unless for some reason the Magistrate thinks it proper to adjourn the hearing of the case to some other day." In the case with which I am dealing, the record does not show that the complainant or his counsel were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 247. The personal attendance of the complainant can be exempted but, then, the discretion has to be judiciously exercised. The observations made in Mohd. Yamin v. Zafar Mohammad are also brought to my notice. The court observed therein that no arbitrary action should be taken and that the complaint should not be dismissed in haste and that chance should be given to the complainant to be present. The rules contained in Chapter I-F, volume (III), High Court Rules and Orders, were noticed in paragraph 5 of the judgment and it was observed : " .......... the Magistrate has to exercise his judicial discretion in making an order under section 247 of the Code. Rule 3(ii) contains the broad instructions for the guidance of the Magistrate, prominently bringing out the grave responsibility which rests on the trying Magistrate when deciding whether to adjourn the case or to proceed with the trial, even in the absence of the complainant or to acquit the accused. They completely rule out arbitrariness or fixed automatic rigidity of action on the part of the Magistrate. " I am in respectful agreement that the trial courts are to act judiciously and are not to dismiss the complaints in h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that either the complainant or his counsel were present on the dates when the accused appeared in response to the summons as contemplated in section 247 of the Code and when the trial court stated in its own way the particulars of the offence to the accused under section 242 thereof. While dealing with section 342 of the Code, the Supreme Court in Bibhuti Bhusan Das Gupta v. State of West Bengal, held that even where the trial court had dispensed with the personal appearance of the accused, a pleader could not represent him for purposes of that provision except where the accused was a company or a juridical person and for that reason could not be examined personally. It was emphasised that in all cases where the accused was not a juridical person the examination of a pleader could not be a sufficient compliance with section 342 of the Code. Section 242 of the Code requires of the Magistrate that he should state the particulars of the offence to the accused and should ask him to show cause why he should not be convicted. Unless the accused is a company, particulars of the offence cannot be stated to its principal officer or any counsel representing the accused. A scrutiny of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was sufficient ground for proceeding against the accused. Section 200(aa) of the Code, which relieves the complainants being public servants from being examined before process is issued under section 204, calls for caution that the court must apply its mind to the complaint, the presentation whereof is different from taking its cognizance. The orders by which on presentation of the complaints the accused were summoned, do not show that the court was cognisant of the allegations contained therein and had appreciated whether any specific offence either under section 276(d) or section 276B of the Act had been committed. The fourth contention on behalf of the respondents is that the default having occurred before the incoming of section 276B of the Act the accused could not have been called upon to show cause as to why they should not be convicted thereunder. Tax at the source was to be deducted under section 192 of the Act at the time of the payment of the salary to each employee and was payable to the credit of the Central Government under section 200 of the Act read with rule 30(1)(b)(i)(2) of the Income-tax Rules, 1962. It was to be paid within one week from the last day of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which such tax was deductible to the date on which such tax was actually paid, was to be the basis for calculating the fine which was to be imperatively imposed. The offence was, therefore, to continue till the actual payment of the particular deduction to the credit of the Central Government. If the default was still there when section 276B became applicable, it became punishable thereunder. The allegations in paragraph 6 of the complaint out of which Criminal Revision No. 49 of 1971 arises were that the entire amount of Rs. 4,586 deducted out of the salaries of unnamed employees on various dates was deposited on 11th June, 1968. The defaults persisted after section 276B of the Act came into force on 1st April, 1968. In case of Criminal Revision No. 50 of 1971, it was mentioned in the complaint that two deposits were made on 16th of April, 1969, and 20th of September, 1969, respectively, towards the amounts deducted out of the salaries of undisclosed employees. The defaults, if punishable, attracted section 276B of the Act. It was stated in paragraph 6 of the complaint out of which Criminal Revision No. 51 of 1971 arises that the accused had deducted a sum of Rs. 36,632.48 out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears 1966, 1967, 1968 and 1969, and the complaint was filed under the date 4th April, 1970. Section 276 of the Act prescribed that the punishment could be with fine, which could extend to Rs. 10 per day during which the default continued. With such a provision being there, I cannot imagine as to why the concerned prosecutors were interested in the continuation of the defaults and the multiplication of the fine which could have been imposed under section 276. Criminal Revision No. 54 of 1971 arises out of a complaint, in paragraph 6 whereof a broad allegation is made that the accused had paid salaries amounting to Rs. 49,144 to the employees, out of which a sum of Rs. 3,808 was to be deducted in order to be paid to the credit of the Central Government in accordance with the provisions of the Act and rule 30 of the Income-tax Rules, 1962, and that the amount was paid in two instalments on 6th of August, 1969, and 23rd September, 1969. The amount was alleged to have been deducted during the financial year 1964-65 and the complaint bears the date 31st March, 1970. If prosecuted promptly the accused would have faced section 276 of the Act and requisite deposits may have been secured ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because of non-compliance with rule 30 of the Income-tax Rules, 1962. The omission to make the deposit being an offence restricted to a particular deduction, it could terminate only on the making of the payment to the credit of the Central Government. The argument is that only the offences not exceeding three could have been tried together. If section 234 of the Code is kept apart, section 242 requires that the particulars of the offence be stated to the accused. There is no sanction that where numerous hidden offences make the sum total of an allegation the court can be held to have complied with section 242 where it abstains from stating the particulars of each offence. In the seven trials with which these petitions are concerned, the court never stated the particulars of any specific deduction of tax out of the salary of any named employee on any given date in respect whereof no deposit was made to the credit of the Central Government within the requisite period. It is undeniable that each distinct deduction from the salary of an employee and the omission to deposit the amount to the credit of the Central Government within the prescribed period constituted a separate offence. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Code that a confession would be forthcoming and the accused or the counsel appearing for the accused knew that there would be an imposition of fine. That apart, while passing the sentence the trial court in each case imposed fine in default of payment whereof the accused were to undergo imprisonment. There is no doubt that fine could have been imposed where the accused were juridical persons, but no trial could have been held within the scope of section 276B of the Act of juridical persons as they could not have been sentenced to imprisonment. In this view I am fortified by the observations made by this court in Rameshwar Dass Chottey Lal v. Union of India. I may also refer to State of Maharashtra v. Jugmander Lal, wherein section 3(1) of the Suppression of Immoral Traffic in Women and Girls Act, 1956, was considered. That provision used the words : " Any person who keeps or manages or acts or assists in the keeping or management of a brother shall be punishable on first conviction with rigorous imprisonment for a term of not less than one year and not more than three years and also with fine which may extend to two thousand rupees and in the event of a second or subsequent co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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