TMI Blog1972 (7) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... nformity with the provisions of section 276B of the Income-tax Act, 1961 (hereinafter called " the Act "). There are distinguishing features, which will be noticed, but the common contentions raised in these matters deserve to be dealt with in one place. The first of these petitions, i.e., Criminal Revision No. 49 of 1971, arises out of a complaint dated the 31st of March, 1970, preferred under sections 276(d)/276B read with sections 192(1) and 200 of the Act in which Shri D. C. Goel, Income-tax Officer, figured as the complainant and the accused were Messrs. Gurdas Kapur and Sons (Private) Ltd. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nant. This is a complaint by a public servant in his official capacity as Income-tax Officer. No preliminary enquiry is, therefore, necessary before summoning the accused. Accused be summoned for May 4, 1970. Personal attendance of the complainant is exempted and he is permitted to appear through his counsel. " If it be taken that the court had passed the afore-quoted order after considering the prayer contained in paragraph 10 of the complaint, then it would be safe to conclude that the court granted a conditional exemption. While directing that the summons be issued for 4th May, 1970, considering that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It came into effect from the 1st of April, 1968. In paragraph 6 of the complaint out of which Criminal Revision No. 49 of 1971 arises no distinction was observed as to whether by the defaults which continued till the 11th of June, 1968, the accused had become punishable under section 276B of the Act or for some prior period they remained liable under section 276(d) thereof. While passing the order on 31st March, 1970, which is in similar language in all these cases, the trial court did not state as to for which offence the accused were being summoned. The record shows that the accused appeared on 4th May, 1970. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istrate, the particulars of the offence of which he is accused shall be stated to him, and he shall be asked if he has any cause to show why he should not be convicted ; but it shall not be necessary to frame a formal charge." When would the accused appear before the court where summons has been issued ? That would be on the date appointed in the summons issued upon taking cognizance of the complaint. Section 247 of the Code became applicable at the stage at which the court was to state under section 242 thereof, the particulars of the offence to the accused in order to ask him if he had any cause to show why he should not be convicted. 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 compla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving an opportunity to the accused of being heard in his defence. While exercising his right under sub-section (2) of section 439 the accused can within the scope of sub-section (6) urge that he be, acquitted. The second petition, i.e., Criminal Revision No. 50 of 1971, arises out of Case No. 302/3 of 1970, which was registered on a complaint preferred under section 276B of the Act read with sections 192(1) and 200 thereof. The complainant and the accused were the same as in the case with which Criminal Revision No. 49 of 1971 was concerned. On 31 st of March, 1970, an order similar to the one noticed while dealing with Criminal Revision No. 49 of 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cording to section 242 of the Code the court should have stated the particulars of the offence to the accused and then asked them to show cause against their liability to conviction. Section 247 was applicable to the proceedings held on 6th May, 1970, and as the complainant was absent, the court should have complied with its requirements. It was alleged in the notice stating the particulars of the offence that the accused were under the statutory obligation to deduct income-tax while paying the salaries to the employees and were under similar obligation to deposit the amounts within seven days of the deductions. It was nowhere stated as to from the 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 absen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the accused were summoned for 16th April, 1970, by an order similar to the one noticed while dealing with Criminal Revision No. 49 of 1971. The personal attendance of the complainant was exempted imposing the condition that he was permitted to appear through his counsel. On the 16th of April, 1970, the proceedings were adjourned and the order on the record is that the case may be taken up with the connected case on the 6th of May, 1970. On that date the complainant and his counsel both, according to the record, being absent, notice was given to the two accused through Shri J. L. Sabharwal, advocate. It was mentioned in the notice stating the particulars of the offence 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milar to those noticed in the other cases was passed on the 4th of April, 1970, summoning the accused for 8th May, 1970, without stating as to for which offence they were to be summoned. The personal attendance of the complainant was exempted permitting him to appear through his counsel. On 8th May, 1970, when sections 242 and 247 of the Code were applicable to the proceedings a composite notice was issued to the two accused alleging that they were under the statutory obligation to deduct income-tax from the salaries of the employees and to deposit the same within seven days of the deductions and that for the financial year 1964-65 having deducted Rs. 1,730.40 they had not paid the same 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 fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the presiding officer was on leave. The proceedings on being taken up were again adjourned to 23rd May, 1970, and on the 26th May, 1970, the notice under section 242 of the Code was given to both the accused through their advocate, Smt. Shanti Gupta. The record does not show that the complainant or his counsel were present on the said date. It was alleged in the notice that for the financial year 1964-65, a sum of Rs. 3,808 had been deducted but had not been paid within the specified period and that deposits were made on 6th August, 1969, and 23rd September, 1969. The accused, whose counsel alone was present, were called upon to explain as to why they should not be held guilty under sections 276(d) and 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tend to ten rupees for everyday during which the default continued. It is submitted that the sentences imposed were not in accordance with law. It is, however, section 276B of the Act which has been reproduced earlier on which greater emphasis is laid and it is contended that the sentences be enhanced. It is urged on behalf of the petitioners that as soon as section 276B became applicable with effect from the 1st of April, 1968, the respondents, who incurred the liability thereunder were to be punished with rigorous imprisonment which could extend to six months and were also to be liable to fine which was not to be less than a sum calculated at the rate of fifteen per cent. per annum on the amount of such tax from 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s ' on his authority ' and it is, therefore, sufficient compliance of the statutory requirement if the complaint petition is filed by the respondent on being authorised by the Inspecting Assistant Commissioner." It is, however, contended that even if it be concluded that the Commissioner had validly authorised the Income-tax Officers to file the complaint the same could have been filed only by them and not presented by their counsel. In elaboration of the argument aid is sought from the observations made by Prakash Narain J. in his judgment dated the 3rd of September, 1969 (Kohli Finance Private Ltd. v. Rishipal Singh), by which Suit No. 573-Arb. of 1966 was disposed of. While dealing with the contention that the petition 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Officer, passed the order summoning the accused. The order does not disclose that the court knew what the allegations against the accused were and that they were to be summoned for the offences committed under sections 276(d)/ 276B of the Act. It is, however, not possible to conclude positively that the omission in the order is one which can be held to be vitiating the trial. Section 537 of the Code applies to cure the omission in the order. The third contention is that section 247, which has been reproduced earlier, applied at the stage when the accused appeared and the particulars of the offences alleged were stated in order to give the opportunity to explain as to why the accused be not convicted and that the complainant 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. St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitution of the complaint. Claiming acquittal, the respondents, firstly, rely on Daulat Ram v. Ram Kishan, wherein it was observed that on the failure of the complainant to appear, the Magistrate is under an obligation to dismiss the complaint unless he is of the opinion that the case should be adjourned to another date. State of U. P. v. Lal Bahadur is also referred to. The observation made therein was that in case of non-appearance of the complainant the discretion to adjourn the hearing of the case must be judiciously exercised and the court should record the reason for adjourning the case. It was pointed out by the Allahabad High Court that the normal course on non-appearance of the complainant is to acquit the accused under section 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 (II ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act the Income-tax Officers were acting in the discharge of their official duties, they were not required to be examined before summoning the accused, but their personal attendance for subsequent proceedings was exempted under the condition that they were permitted to appear through their counsel. It is urged by the petitioner's counsel that he was present on all dates. This court has, however, to be guided by the record. If the counsel for the petitioners was present, the trial court should have recorded that he was present and should have then stated particulars of the offence to the accused in compliance with section 242 of the Code. The trial court record pertaining to none of the seven complaints out of which these petitions arise shows 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 dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated to the accused and where his presence is not exempted under section 205 of the Code and where the accused is not a juridical person, the court acts without jurisdiction in stating the particulars to a counsel representing the accused. Section 537 of the Code will not come in to cure such an illegality. I have perused the trial court records in these cases with utmost care and many times. As soon as the complaints were presented by the counsel on behalf of the complainants, stereotyped orders were passed in the seven cases that the complainants being public servants no preliminary inquiry was necessary, and the accused be summoned. The summons could have been issued within section 204 of the Code only on a satisfaction of the court that there 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cement of this Act, unless there is anything repugnant in the subject or context,--... (38) ' offence ' shall mean any act or omission made punishable by any law for the time being in force." As soon as an omission to deposit the tax deducted at the source out of the salary of a particular employee occurred on account of the default in complying with the requirements of section 200 of the Act read with rule 30, the offence took place. The duration of the omission could be terminated only by making the deposit. Wherever the omission was subsisting, after the 1st of April, 1968, it became an offence under section 276B of the Act. This view finds support from the terms employed at the end of section 276B of the Act which is clear that the period as from the date on 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 paragr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 192(1) read with section 200 of the said Act and rule 30 of the Income-tax Rules, 1962. The said amount was, however, paid on 28-3-1969." According to the afore-quoted allegations, during the financial year 1964-65 the accused had deducted a sum of Rs. 1,730.40 from the salaries of its employees. No allegations were made as to how many deductions from the salaries of specified employees made the total sum of Rs. 1,730.40 and on which dates the deductions had been made the defaults in making the deposits in respect whereof constituted distinct offences under the law. The deductions having been admittedly made during the financial year 1964-65, complete disregard was shown to the provisions of the Act and no proceedings were instituted against the accused during the years 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 whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or local law, shall be deemed to be an offence of the same kind as an attempt to commit such offence, when such an attempt is an offence." It is urged that no cognizance could have been taken of the complaints and that the trial court had acted without even reading them. It is emphasised that whenever salary was paid to a particular employee, every deduction of tax at the source being not deposited to the credit of the Central Government within the prescribed period constituted a distinct offence and that in order to obtain the trial the complainants should have specifically alleged the names of the employees, the dates on which salaries were paid to them, the amounts which were deducted towards the tax and it should have been clarified as to when the offence became punishable 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of depositing each of the mounts deducted constituted separate offences. Cognizance could have been taken only of specific offences. The provisions in the Act do not warrant that a complaint be preferred merely stating that during a particular financial year a particular amount was deducted which was not deposited. What is made punishable is the default to deposit within the prescribed period a specific amount of tax deducted on a particular date out of the salary of a particular employee. The law does not contemplate that an omnibus allegation be made that a lump sum had been deducted during a particular financial year but had not been deposited. The record pertaining to the seven trials shows that the trial court knew while stating whatever it stated under section 242 of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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