TMI Blog1933 (7) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (ii) ₹ 4,050, on 12th November 1927, (iii) ₹ 1,500, on 28th November 1927; (iv) ₹ 1,000 on 23rd December 1927; (v) ₹ 15,000, on or about 5th January 1928. At the hearing of the appeal Mr. A.N. Chaudhuri on behalf of the appellant further admitted that the sum of ₹ 15,000, was received by way of commission or brokerage for negotiating a loan of ₹ 1,70,000, from the Storz Trust to one Maung Kala, but he contends that this sum was not income assessable to income-tax, but a mere windfall, being a receipt of a casual and non-recurring nature within Section 4(3)(vii), Income-tax Act, which did not arise from his business or the exercise of a profession, vocation or occupation of the appellant. The sum of ₹ 6,000, according to the appellant's contention, was a receipt of capital and not income, being in repayment of a temporary loan that the appellant had made to one P.N. Chowdhury, an advocate of Bassein. The two sums of ₹ 4,050 and ₹ 1,500 the appellant claimed to be in part travelling and professional expenses, in part remuneration for work done in connexion with another loan to P.N. Chowdhury and these t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... few salient facts disclosed in the evidence are narrated it will become obvious that the conviction of the appellant was clearly right, and that there is no substance in this appeal. The appellant is a barrister-at-law and an advocate of this Court who must have had a working knowledge of the provisions of the law relating to the filling up of the forms prescribed for returning income assessable under the Income-tax Act. Indeed, the very defence to the charges connotes that the appellant was familiar with the provisions relating to receipts of a casual and non-recurring nature. (After discussing the evidence, his Lordship proceeded). I am satisfied upon the evidence that the appellant was fully aware that all these sums were income, that it was incumbent upon him to disclose in his return of income for the year 1927-28 and in my opinion on the merits of the case the appeal must fail. On behalf of the appellant however, it was further contended that the proceedings were vitiated in toto because the provisions of S. 52 and S. 53(1), Income-tax Act, and S. 195 (1), Criminal Procedure Code, were not complied with. Section 52 states as follows:- If a person makes a statement in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in my opinion, there is no ground in law or in fact upon which the appeal can be sustained and it is dismissed. The question of the appropriate sentence of the offence of which the appellant has been convicted remains for consideration. Under S. 177, Indian Penal Code: Whoever, being legally bound to furnish information on any subject to any public servant, as such, furnishes, as true, information on the subject which he knows or has reason to believe to be false, shall be punished with simple imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. In this case by reason of the false return that the appellant made a clear and deliberate evasion of income-tax has been proved. The District Magistrate taking into account the professional and social status of the appellant has imposed upon him a fine of ₹ 1,000. The learned Government Advocate on behalf of the Local Government has applied to the Court in the exercise of its powers of revision to pass a substantive sentence of imprisonment on the appellant upon the ground that the imposition of fine is not an adequate punishment for the offence that ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er persons are deterred from acting in like manner, upon the position of the general body of taxpayers. The District Magistrate appears to have been of opinion that justice and mercy alike would be satisfied by the imposition of a fine having regard to the effect that the conviction may have upon the social and professional life of a person in the position occupied by P.D. Patel. I confess, with respect, that I do not see eye to eye with the District Magistrate in this matter. Would it be right or reasonable in circumstances such as those obtaining in the present case that in the public interest imprisonment should be meted out to an untutored person, whose upbringing and outlook on life might mislead him into thinking that the making of a false return of assessable income was a venial offence that carried with it no moral obloquy, while a fine would suffice in the case of an educated man in a good social position, who must have known that in so doing he was committing both a moral and a criminal offence? Surely not. Corruptio optimi pessima. We have anxiously considered what is the right course for the Court to take, bearing steadily in mind both the interests of the general ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,000 mentioned thirdly above. He avers that the sum of ₹ 6,000 was received in repayment of a temporary loan. He asserts that the sum of ₹ 5,550 was received as his expenses and legal remuneration and was taken into account in the income-tax return which he furnished. As regards ₹ 15,000 the appellant's case is that it being an income of a casual and non-recurring nature, a windfall, was not a taxable item of income, and in any event he never had any real benefit of the sum inasmuch as he lent ₹ 5,000 out of the amount to Chowdhury, who has since become an insolvent, and he invested ₹ 10,000 in the Ice Factory of Chowdhury, which is a failure. That these sums of money were received by the appellant as commission upon loans which he had negotiated for Chowdhury and U Kala, is proved by the evidence of these two men, and the learned counsel for the appellant has urged that the testimoney of Chowdhury and U Kala is unreliable. But in view of certain statements of the appellant contained in Exs. 2 J and L, to which my Lord, the Chief Justice, has already referred, I have no doubt in my mind that the substance of the evidence of Chowdhury and U Kala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from B, and in a suit filed by X against Y, A gave evidence in the course of which he stated that he owed money to B. In a suit filed by B against A, this statement of A's in the proceeding between X and Y would undoubtedly be relevant to the issue in the suit and could be proved by B, notwithstanding that A was not a party to the proceeding between X and Y. In my judgment the proceeding mentioned in Section 18, Evidence Act, refers to the proceeding in which the matter stated by the party is in issue or is relevant to the issue and not to the proceeding, if any, in which the statement has been made. I do not think that I can usefully add anything to the remarks of my Lord the Chief Justice regarding the contention of the learned counsel for the appellant with reference to the provisions of Section 52 and 53(8), Income-tax Act, and Sections 195 (1), Criminal Procedure Code. I agree that the appeal fails and must be dismissed. I now turn to the question of sentence. The legal provision prescribing the punishment for this offence fixes the maximum of the amount of a fine which may be imposed on the offender at ₹ 1,000 only. The discretion of the Court is thereby ..... X X X X Extracts X X X X X X X X Extracts X X X X
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