TMI Blog2016 (8) TMI 1308X X X X Extracts X X X X X X X X Extracts X X X X ..... eries made, did not disclose that they in fact did hold a locker located at Aurangabad. They in fact denied to hold any locker, either individually or jointly. The locker, eventually located, though at Aurangabad, has a perceptible co-relation or nexus with the subject matter of assessment and thus the returns filed by the appellants at Bhopal which in turn were within the purview of the search operations. The search conducted simultaneously at Bhopal and Aurangabad has to be construed as a single composite expedition with a common mission. Having regard to the overall facts and the accusation of false statement made about the existence of the locker in such a joint drill, it cannot be deduced that in the singular facts and circumstances, no part of the offence alleged had been committed within the jurisdictional limits of the Chief Judicial Magistrate, Bhopal. Chapter XIII of the Code sanctions the jurisdiction of the criminal courts in inquries and trials. Whereas Section 177 of the Code stipulates the ordinary place of inquiry and trial, Section 178 enumerates the places of inquiry or trial. In terms of Section 179, when an act is an offence by reason of anything which has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as UTI Bank) at Aurangabad which they had also operated on 30.10.2010. The search at Aurangabad was conducted by the Income Tax Officer, Nashik and Income Tax Officer, Dhule and the statements of the appellants were also recorded at Aurangabad. 4. Based on the revelation that the appellants, on the date of the search, did have one locker as aforementioned and that their statements to the contrary were false and misleading, a complaint was filed as afore-stated under the above-mentioned sections of the Indian Penal Code by the Deputy Director of Income Tax (Investigation)-I, Bhopal (M.P.) on 30.5.2011 in the court of the Chief Judicial Magistrate, Bhopal, (M.P.) and the same was registered as R.T. No. 5171 of 2011. 5. The Trial Court on 9.6.2011, took note of the offences imputed and issued process against the appellants. In doing so, the Trial Court, amongst others, noted that the search proceedings undertaken by the authorities under Section 132 of the Act were deemed to be judicial proceedings in terms of Section 136 and in course whereof, as alleged, the appellants had made false statements with regard to their locker and that on the basis of the documents and evidence p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Code. 9. It has been emphatically maintained on behalf of the appellants that having regard to the place of search, the recording of their statements as well as of the location of the locker, no cause of action for initiation of the criminal proceedings had arisen within the jurisdiction of the court of the Chief Judicial Magistrate, Bhopal in terms of Sections 177 and 178 of the Code and thus the High Court had grossly erred in deciding contrary thereto. It has been argued that the rejection of their plea by the High Court on the ground that the Deputy Director of Income Tax (Investigation)-I, Bhopal (M.P.) was an officer superior in rank to the I.T.Os. conducting the search is patently flawed and unsustainable in law and on facts, having regard to the peremptory perquisites of a valid complaint under Section 195 of the Code. 10. Reliance on the decisions of this Court in Kuldip Singh vs. The State of Punjab and Another 1956 SCR 125, Lalji Haridas vs. State of Maharashtra and Another 1964 (6) SCR 700, Rajesh Kumar and Others vs. Deputy C.I.T. and Others (2007) 2 SCC 181, Y. Abraham Ajith and Others vs. Inspector of Police, Chennai and Another (2004) 8 SCC 100 and Bh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts, to reiterate, that the appellants were residents of Bhopal and Aurangabad, and that the search operations were conducted simultaneously at both the places were noted as well. 14. Qua the competence of the Deputy Director, Income Tax (Investigations)-I Bhopal, the High Court held the view that he being admittedly an officer superior in rank to the I.T.Os. conducting the search, the institution of the complaint by him was not vitiated by any lack of authority. Reference to Section 136 of the Act, whereunder any proceeding before an income tax authority would be a judicial proceeding and that for that matter, every income tax authority is deemed to be a civil court was recorded as well. The High Court did refer to the Section 195 of the Code to enter a finding that the Deputy Director, Income Tax (Investigations)-I Bhopal being an officer superior to the I.T.Os. undertaking the search and to whom an appeal from their orders/decisions/actions ordinarily lay, was a civil court as contemplated thereunder to lodge the complaint. 15. The competing contentions have received our due consideration. The rival submissions stir up two major issues pertaining to the maintainability a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Inv.), M.P. C.G.,Bhopal/Deputy Director of Income Tax and the statements of the appellant Nos. 1 and 2 were recorded by Mrs. Bharati Choudhary, I.T.O. and Mr. A.T. Kapase, I.T.O. (Inv.), Nashik on 28.10.2010. The materials on record also disclose that search operations did continue on subsequent dates as well, in course whereof seizures were made. 19. Be that as it may, eventually the office of the Deputy Director of Income Tax (Investigation)-I, Bhopal on 8.2.2011 issued a show cause notice to the appellants under Section 277 of the Act alleging that they had made false statement under Section 132(4) thereof, thereby seeking a reply as to why prosecution would not follow by virtue thereof. It is in this factual premise, that the validity of the complaint filed by the Deputy Director, Income Tax (Investigation)-I, Bhopal, (M.P). has been questioned by the appellants. To reiterate, by the impugned order, the High Court has negated both the demurrals of the appellants pertaining to the complaint and territorial jurisdiction of the court of the Chief Judicial Magistrate, Bhopal. 20. The state of law as adumbrated by the precedents cited may now be outlined before referrin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o jurisdiction to make complaint. He also held that on merits as well there was no prima facie case. The High Court, however, in revision held that the Senior Subordinate Judge had the jurisdiction and further the materials on record did disclose a prima facie case. Accordingly, the order of the Additional District Judge was set aside and the order of the Senior Subordinate Judge was restored. 25. Three questions fell before this Court for scrutiny. Firstly, whether the Senior Subordinate Judge Mr. Pitam Singh had jurisdiction to entertain the application and make a complaint. Secondly, whether the Additional District Judge had jurisdiction to entertain an appeal preferred against the order of Mr. Pitam Singh and thirdly, whether the High Court had the power to reverse the order of the Additional District Judge in revision. 26. While dwelling upon the first issue, this Court adverted at the threshold to Section 195(1)(b) and (c) of the Code which prohibited any Court from taking cognizance of either of the two offences alleged, except on the complaint in writing of the Court concerned or of some other Court to which such Court was subordinate. Having regard to the fact that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge (iii) The Court of the Subordinate Judge 29. Vis-a-vis the provisions for appeal under Section 39 of the Act, it was noted that in the absence of any other enactment for the time being in force, appeals lay to the Court of the District Judge when the value of the suit did not exceed ₹ 5,000/- and in every other case to the High Court. Section 39(3), however, empowered the High Court by notification to direct that appeals lying to the District Court from all or any of the decrees or orders passed in its original jurisdiction by a Subordinate Judge, would be preferred to such other Subordinate Judge as mentioned in such notification. The facts revealed that as a matter of fact such power had been invoked and appeals lying to the District Courts from the decrees or orders passed by a Subordinate Judge in two classes of cases as specified could be preferred before the Senior Subordinate Judge of the 1st Class exercising jurisdiction within such Civil District. 30. In this factual setting their Lordships expounded that filing of the appeal to the Senior Subordinate Judge as notified qua the two selected categories of cases, could not be termed as ordinary because th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... competent to do so, being the Court to which appeals ordinarily lay from the court of the subordinate judge and was lower in rank to the High Court in the hierarchy. It was held in this context, that the Court of the Additional District Judge could not be construed to be a District Judge and that the jurisdiction of the former was limited to the discharge of such functions as were to be entrusted by the District Judge. It was thus concluded that neither the Senior Subordinate Judge Mr. Pitam Singh nor the Additional Judge Mr. J.N. Kapur who construed himself as an Additional District Judge, had the jurisdiction in the matter and in view of the provisions of the Punjab Courts Act, it was the District Judge who was competent to lodge the complaint in terms of Section 195(3) of the Code. Having regard to the gravity of the allegations, this Court remitted the matter to the District Court to do the needful in the exercise of his discretion in the facts and circumstances of the case. 34. In Lalji Haridas (supra), a Constitution Bench of this Court was seized with the question as to whether the proceeding before the I.T.O. under Section 37 of the Indian Income Tax Act, 1922 (as it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly, the question as to whether the false statement alleged to have been made by the respondent No. 2 was rendered in a judicial proceeding within the meaning of Section 193 IPC was answered in the affirmative. 38. This Court also dwelt upon the aspect whether judicial proceeding as referred to in Section 193 IPC was synonymous with the expression any proceeding in any court used in Section 195(1)(b) of the Code. This issue surfaced primarily in view of the two classes of proceedings contemplated in Section 193 IPC attracting two varying punishments. This provision, it was noted, envisaged a punishable offence for giving false evidence in any stage of a judicial proceeding or fabricating false evidence for the purpose of being used in any stage of a judicial proceeding and also for giving or fabricating false evidence in any other case. This Court in the ultimate analysis propounded on a conjoint reading of Section 193 IPC and Section 195(1)(b) of the Code that the proceedings which are judicial under the former ought to be taken to be proceedings in any court under the latter. In this context, it was ruled that having regard to the higher sentence for the offence under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing was given to it, prior thereto. The interpretation and application of Section 142(2-A) of the Act in the textual facts thus fell for consideration in this case. It is in this context that this Court ruled that an assessment proceeding under the Act, is in terms of Section 136 thereof, a judicial proceeding and that when a statutory power is exercised by the assessing authority in exercise of judicial function which is detrimental to the assessee, the same is not and cannot be administrative in nature. In the extant facts and circumstances the challenge of the assessee was upheld. 41. As the genesis of the debate is rooted to Section 195 of the Code, a detailed reference thereto is indispensable. For convenience, Section 195 as a whole is extracted hereinbelow: 195. Prosecution for contempt of lawful authority of public servants, for offences against public justice and for offences relating to documents given in evidence. (1) No Court shall take cognizance- (a) (i) of any offence punishable under sections 172 to 188 (both inclusive) of the Indian Penal Code (45 of 1860), or (ii) of any abetment of, or attempt to commit, such offence, or (iii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich such Court shall be deemed to be subordinate; (b) where appeals lie to a Civil and also to a Revenue Court, such Court shall be deemed to be subordinate to the Civil or Revenue Court according to the nature of the case or proceeding in connection with which the offence is alleged to have been committed. Section 195(1)(b) of the Code, which is relevant for the instant pursuit, prohibits taking of cognizance by a court vis-a-vis the offences mentioned in the three clauses (i), (ii) and (iii) except on a complaint in writing of the Court when the offence(s) is/are alleged to have been committed in or in relation to any proceeding before it or in respect of a document produced or given in evidence in such a proceeding or by such officer of that court as it may authorise in writing or by some other court to which the court (in the proceedings before which the offence(s) has been committed) is subordinate. A patently regulatory imposition in the matter of lodging of a complaint for such offences is discernible assuredly to obviate frivolous and wanton complaints by all and sundry. 42. Sub-section (3) of Section 195 clarifies that the term Court would mean a Civil, Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eport or information or upon his own knowledge. Section 195 restricts such general powers of the Magistrate, and the general right of a person to move the court with a complaint is to that extent curtained. It is a well-recognised canon of interpretation that provision curbing the general jurisdiction of the court must normally receive strict interpretation unless the statute or the context requires otherwise..... . (emphasis supplied). 47. There is thus no escape from the proposition that for a valid complaint under Section 195 of the Code, the mandate thereof has to be essentially abided and as is easily perceivable this is to prevent frivolous, speculative and unscrupulous allegations relating to judicial proceedings in any court, lest the process of law is abused and public time is wasted in avoidable litigation. 48. That the search operations did constitute a proceeding under the Act before an income tax authority and that therefore the same is deemed to be a judicial proceeding within the meaning inter alia of Sections 193 and 196 IPC and that every income tax authority for the said purpose would be deemed to be a civil court for the purposes of Section 195 is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax authority to whom the Assistant Director or the Assistant Commissioner as the case may be or other income tax authority is subordinate. Noticeably this clause does not spell out any territorial barriers but logically warrant some order/notification to activate the functional mechanism in order to address the institutional exigencies. 52. Our attention has not been drawn to any document to this effect. Additionally as well, the decisive and peremptory prescription of Section 195(4) of the Code is not merely the levels of the rank inter se but the recognised appellate jurisdiction ordinarily exercised by the authority or the forum concerned for a complaint to be validly lodged by it, if in a given fact situation, the initiation of prosecution is sought to be occasioned not by the court in the proceedings before which the contemplated offence(s) had been committed, but by a court to which ordinarily appeals therefrom would lie. 53. Considerable emphasis has been laid on behalf of the respondent on the provisions of the Act outlining the jurisdiction of the income tax authorities as encompassed in Sections 120 and 124 of the Act in particular. Section 120 provides that income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one stemming from any proceeding before an assessing officer under Section 132 of the Act pertaining to search or seizure. Noticeably though under Section 116 of the Act, as referred to hereinabove, under clause (d) thereof, Deputy Director of Income Tax, Deputy Commissioner of Income Tax and Deputy Commissioner of Income Tax (Appeals) have been bracketed together, it is only the Deputy Commissioner (Appeals), as is apparent from Section 246(1), who has been conferred with the appellate jurisdiction to entertain appeals, albeit from specified orders passed by an assessing officer as mentioned in that sub-section. The Deputy Director of Income Tax in particular, has not been designated to be the appellate authority or forum from such orders or any other order of the assessing officer. Having regard to the issue to be addressed, it is considered inessential to dilate on Section 246A which deals with the appeals to the Commissioner (Appeals). 57. Our attention has not been drawn to any provision of the Act whereunder the Deputy Director of Income Tax has been designated to be an authority or forum before whom an appeal would lie from any order of any subordinate officer including t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restrictive connotations would be of mutilative bearing thereon and thus frustrate the purpose thereof, a consequence not approvable in law. To reiterate, Section 195 of the Code clearly carves out an exception to the otherwise conferred jurisdiction on a court under Section 190 to take cognizance of an offence on the basis of the complaints/information from the sources as enumerated therein. 62. Viewed in this context, in our estimate, the notification issued under Section 118 of the Act cannot be conceded an overriding effect over the scheme of the statute designating the appellate forums more particularly in absence of any order, circular, notification of any authority thereunder to that effect. The Deputy Director of Income Tax for that matter, as the framework of the Act would reveal, has not been acknowledged to be the appellate forum from any order or the decision of the assessing officer/I.T.O., notwithstanding several other provisions with regard to conferment of various powers and assignments of duties on the said office. In the teeth of such mindful and unequivocal module of the Act, recognition of the Deputy Director of Income Tax to be a forum to whom an appeal wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute itself but at the same time a casus omissus should not be readily inferred and for that purpose, all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. 64. More recently this Court amongst others in Petroleum and Natural Gas Regulatory Board vs. Indraprastha Gas Limited and Others (2015) 9 SCC 209 had propounded that when the legislative intention is absolutely clear and simple and any omission inter alia either in conferment of power or in the ambit or expanse of any expression used is deliberate and not accidental, filling up of the lacuna as perceived by a judicial interpretative process is impermissible. This was in reiteration of the proposition in Sree Balaji Nagar Residential Association vs. State of Tamil Nadu and Others (2015) 3 SCC 353 to the effect that casus omissus cannot be supplied by the court in situations where omissions otherwise noticed in a statute or in a provision thereof had been a conscious legislative intendment. 65. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecognition of this authority to be the appellate forum before whom appeals from the decisions of an assessing officer or of an officer of the same rank thereto would generally and ordinarily lie even in the contingencies not referred to in particular in sub section 1 of Section 246. This is more so, to reiterate, in absence of any provision under the Act envisaging the Deputy Director of Income Tax to be an appellate forum in any eventuality beyond those contemplated in Section 246(1) of the Act. Neither the hierarchy of the income tax authorities as listed in Section 116 of the Act nor in the notification issued under Section 118 thereof, nor their duties, functions, jurisdictions as prescribed by the cognate provisions alluded heretobefore, permit a deduction that in the scheme of the legislation, the Deputy Director of Income Tax has been conceived also to be an appellate forum to which appeals from the orders/decisions of the I.T.Os./assessing officers would ordinarily lie within the meaning of Section 195(4) of the Code. The Deputy Director of Income Tax (Investigation)-I Bhopal, (M.P.), in our unhesitant opinion, therefore cannot be construed to be an authority to whom appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the complaint had been filed, the proceedings were quashed. 71. Both these decisions on territorial jurisdiction, to start with having regard to the facts involved herein are distinguishable and are of no avail to the appellants. As hereinbefore stated, the appellants as assesses, had residences both at Bhopal and Aurangabad and had been submitting their income tax returns at Bhopal. The search operations were conducted simultaneously both at Bhopal and Aurangabad in course whereof allegedly the appellants, in spite of queries made, did not disclose that they in fact did hold a locker located at Aurangabad. They in fact denied to hold any locker, either individually or jointly. The locker, eventually located, though at Aurangabad, has a perceptible co-relation or nexus with the subject matter of assessment and thus the returns filed by the appellants at Bhopal which in turn were within the purview of the search operations. The search conducted simultaneously at Bhopal and Aurangabad has to be construed as a single composite expedition with a common mission. Having regard to the overall facts and the accusation of false statement made about the existence of the locker in such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it may, on a cumulative reading of Sections 177, 178 and 179 of the Code in particular and the inbuilt flexibility discernible in the latter two provisions, we are of the comprehension that in the attendant facts and circumstances of the case where to repeat, a single and combine search operation had been undertaken simultaneously both at Bhopal and Aurangabad for the same purpose, the alleged offence can be tried by courts otherwise competent at both the aforementioned places. To confine the jurisdiction within the territorial limits to the court at Aurangabad would amount, in our view, to impermissible and illogical truncation of the ambit of Sections 178 and 179 of the Code. The objection with regard to the competence of the Court of the Chief Judicial Magistrate, Bhopal is hereby rejected. 76. The inevitable consequence of the determination in its entirety however is that the complaint is unsustainable in law having been filed by an authority, incompetent in terms of Section 195 of the Code. 77. In the result, the appeal succeeds and the impugned proceeding and the order assailed are set-aside. The respondent is however left at liberty to take appropriate steps in the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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