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TMI Blog1998 (12) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... esented the same before the Income-tax Officer, collected back the certificate and got the sale deed registered, himself being a witness for the same and thereby abetted A1 and A2 in the commission of the said offence. On behalf of the complainant four witnesses were examined as P. Ws. Nos. 1 to 4 and exhibits P-1 to P-22 were marked. The accused had examined four witnesses as D. Ws. 1 to 4 and exhibits D-1 to D-4 were marked on their side. The learned Additional Chief Metropolitan Magistrate, E.O. II, Egmore, Chennai, after trial, acquitted accused Nos. 1 and 2, but found the third accused guilty under section 278 of the Income-tax Act under two counts and sentenced, the third accused to undergo rigorous imprisonment for six months under each count and to pay a fine of Rs. 500. Aggrieved by the order of acquittal passed by the Additional Chief Metropolitan Magistrate in E.O.C.C. No. 571 of 1986, dated December 23, 1986, acquitting accused Nos. 1 and 2, the complainant has preferred the appeal in C. A. No. 299 of 1987. In the meanwhile the third accused who was found guilty by the Additional Chief Metropolitan Magistrate, preferred an appeal against the conviction and sentence imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst accused presented an application for the grant of certificate under section 230A, on July 31, 1981, to the Income-tax Officer, City Circle-III(10), Madras-6. In the application, she has given her address at No. 15, Adiyappa Naicken Street, Madras. The same address was given as regards the second accused, her husband. The Income-tax Officer issued the certificate, believing the declaration to be true and the certificate was collected by the third accused. The third accused figured as a witness to the registration of the document which was registered on July 31, 1981, by the joint Sub-Registrar, No. III, Madras (North). An investigation revealed that accused Nos. 1 and 2 never resided at Door No. 15, Adiyappa Naicken Street, and they were residing only in Old No. 15, New No. 45, Strotten Muthiah Mudali Street, Chennai-1. But, in the document, that was registered on the same day, the first accused has given her address as No. 45, Strotten Muthiah Mudali Street, Chennai-1, whereas in Form No. 34A as well as in the draft sale deed, the address given was No. 15, Adiyappa Naicken Street, Chennai. The first accused has stated that she handed over a signed blank application form for in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ird accused abetted or induced the first and second accused to deliver the statement and the declaration in Form No. 34A and thereby helped accused Nos. 1 and 2 to evade tax. The first charge framed against accused Nos. 1 to 3 is under section 120B of the Indian Penal Code. Charge Nos. 2 to 6 are against the first accused under sections 193, 196, 420 of the Indian Penal Code, and sections 276C(1), 277 of the Income-tax Act. Charge Nos. 7 to 11 are against the second accused for offences under sections 278, 193, 196, 420 of the Indian Penal Code, and section 277 of the Income-tax Act. The twelfth and thirteenth charges are framed against the third accused for the offences punishable under section 278 of the Income-tax Act under two counts. The trial court acquitted all the accused of the charge, viz., accused Nos. 1 to 3 under section 120B of the Indian Penal Code. The third accused preferred an appeal to the Court of Sessions in C. A. No. 1 of 1987. As regards the acquittal of the third accused under section 120B, no appeal was preferred by the Department. Therefore, the position is that though as against the acquittal of accused Nos. 1 and 2 there is an appeal, as against the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led up false particulars in the clearance certificate. It is further stated that in her letter dated September 6, 1985, the first accused has stated that she handed over a signed blank application form of income-tax clearance to the third accused and it is the third accused, who filled up that form. In paragraph 15, it is stated that in pursuance of the above conspiracy, the third accused abetted accused Nos. 1 and 2 to deliver the statement and declaration in Form No. 34A, dated July 31, 1981, containing false address of the first accused and helped her to evade capital gains tax for the assessment year 1982-83 and as such he has committed the offence punishable under section 278 of the Income-tax Act. It is not in controversy that accused Nos. 1 and 2 were not income-tax assessees. The allegation in the complaint is that the first accused has given the statement that she handed over the blank form with her signature and the particulars were filled up by the third accused. Thus, it is a statement made by the co-accused. A statement given by a co-accused cannot be treated as substantial evidence against the other accused nor can it form the basis of conviction. Therefore, even ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course she has only stated that she signed the form and that she did not give the address particulars. P. W. 2, the auditor would say that accused Nos. 1 and 2 did not tell them that the work of filing the return of income for 1982-83 was entrusted to A-3. It is stated by him that exhibit P-21 was signed by A-1 on June 16 and it was duly filled up by one of the staff. Thus, the materials placed on record are not sufficient to come to any conclusion that the address particulars were filled tip by the third accused. It is also to be pointed out that no step was taken by the Department to have the handwriting examined by an expert, nor the procedure laid down in section 45 of the Evidence Act has been complied with in this case. Therefore, on the basis of the materials placed, it is difficult to come to a conclusion that the address particulars were filled up by the third accused or that he abetted the commission of offence. As I have already pointed out and as laid down by the apex court, merely on the basis of the statement of a co-accused, it is not possible to hold that the allegation against the third accused has been proved satisfactorily. There must be sufficient materials in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance certificate, and when there is evidence to show that the same was presented by the third accused on behalf of accused Nos. 1 and 2 and when the address particulars contained therein as on the face of it are false, the culpable state of mind has to be presumed, more so when the third accused is said to be residing in the opposite house of accused Nos. 1 and 2. In my opinion, this contention rather streches too far the presumption. The third accused was only a professional. Assuming that accused Nos. 1 and 2 approached him for obtaining the income-tax clearance certificate and the application was presented by the third accused, from that one cannot draw an inference that any false particulars contained in that application were made with the knowledge of the income-tax practitioner, or with his consent or, on his direction. Here as pointed out already, as to who presented the application, there is no definite material. The address particulars have not been subjected to any examination by any expert. The prosecution's witnesses would say that they did not know as to who filled these particulars. The statement given by one of the co-accused that it is the third accused, who filled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0A of the Act, but a person who has no legal interest, claim or title over the said property by mere reason of his being made a party to a document, cannot be held to have committed an offence as alleged by the Department. He was not concerned with the property, if he gives the correct address, equally it can be stated that as he is not the owner of the property he has given the false statement. It is not the case here that the second accused has given a declaration that he is the owner of the property. Therefore, strictly speaking, I am of the view that the offence as alleged against the second accused cannot be held to have been proved, for he is not the owner of the property. Any address particulars given by him whether correct or incorrect cannot make him liable because he is not the beneficiary in the order passed by the income-tax authority under section 230A. Even otherwise, one has to see whether it can be stated that the offences as against accused Nos. 1 and 2 have been made out. It is the admitted case of the Department that accused Nos. 1 and 2 were not assessees of income-tax. It is not the case that they were income-tax assessees and they had suppressed the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date when they made a request by filing an application under section 230A of the Income-tax Act. Therefore, this aspect of the case, the Department, has not properly explained. The complaint is to the effect that such a false address has been given with a view to evade income-tax on capital gains. It is stated that only the Income-tax Officer having jurisdiction over the permanent address of the vendor can take action for collecting income-tax on capital gains. The prosecution has not produced any rules to show that it is so. The Income-tax Officer, City Circle III(10), who has granted this certificate is entitled to proceed against and levy capital gains. If the address is No. 15, Adiyappa Naicken Street, according to them, it is only that officer-in-charge of that circle alone who can initiate action. It seems to the prosecution case that it is only the address that counts for the purpose of reckoning tax and not the transaction. For the evidence of P.W. 1 does not throw any light on this aspect. On the other hand, his evidence is destructive of the prosecution case. P.W. 1 who was the Income-tax Officer, City. Circle III(10), on the date of issuance of the clearance certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his complaint has been filed only after the same. It has been presented into court on August 13, 1986. But, when they filed this complaint, the Department did not choose to allege that the first accused failed to pay the tax payable on capital gains on the sale of the property in July, 1981, and as such she is liable to be proceeded against under section 276C. On the other hand, they have chosen to file the complaint as though the accused are guilty of the offence of having given a false address. Neither in the oral evidence adduced by the Department nor by the production of rules under the Income-tax Act, has it been shown that the Department was prohibited from taking any steps immediately on account of the giving of false address or that it is only the concerned officer, who has jurisdiction who can take steps under the provisions of the Act. On the other hand, P.W. 4 who is the Income-tax Officer, City Circle IV(ii), has stated that he issued notice under section 148 of the Act later and made assessment. Therefore, the argument that the Income-tax Officer, City Circle III(10), Chennai, alone is competent to take action, is belied by the action of P.W. 4. I do not think that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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