TMI Blog2019 (12) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... edings and on the similar proceedings if a criminal proceedings have been launched, then under such circumstances it can be said to be abuse of process of the Court. - the contention raised by the learned Senior counsels appearing for the petitioners is not having any force, the same is liable to be rejected. Under Article 13 of the Constitution of India, there also the interpretation of unless the context otherwise has been interpreted. Law has been defined and it includes any Ordinance, order, bye-law, rule, regulation, notification, custom or usage having in the territory of India, the force of Law. When the said Notification has been challenged and not yet finalized with regard to legality or otherwise, in that light, Notification dated 13.11.2014 as per Article 13 of the Constitution of India is having a force of law and by virtue of the said authority, if the sanction has been issued by the Principal Director of Commissioner, then under such circumstances, it cannot be held that he is not having any authority to issue the sanction order. While seeing the intention and otherwise of the enactment, subsequent notification, amendments, ordinance and other aspects have to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminal Revision Petition No.955/2019, Sri.A.Shankar, learned Senior Counsel for Sri.Shayam Sundar M.S. in Criminal Revision Petition No.959/2019, and Sri.Shashi Kiran Shetty for Smt.Latha S. Shetty in Criminal Revision Petition No.969/2019 and Sri.G.Rajagopalan, Additional Solicitor General, along with Sri. Jeevan J. Neeralgi, Senior Standing Counsel for respondent. 3. The factual matrix of the case of the prosecution is that Deputy Director of Income Tax Investigation, Bengaluru, lodged a complaint against the accused persons for having committed an offence punishable under Sections 276 (C)(1), 277, 278 of the Income Tax Act and also under Sections 193, 199 and 120B of Indian Penal Code. In the said complaint it is alleged that there is escapement of the income tax in the middle of the financial year and thereby they have committed the alleged offence. Earlier all the accused persons filed a criminal petition before this Court for quashing, but the same has been withdrawn with liberty to file an application for discharge. Accordingly, application under Section 245(2) of Cr.P.C. was filed and to the said application, the respondent also contested by filing his obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion it should be remembered that certain expressions occurring in the Act and if the words starts with certain expressions as unless the context otherwise requires, then under such circumstances it is not mandatory that one should mechanically attribute to the said expression, the meaning assigned to it in the clause. Where the context does not permit or where the context requires otherwise, the meaning assigned to it in the said definition need not be applied. In order to substantiate his contention he relied upon the decision in the case of Printers (Mysore) Ltd. And another v. Assistant Commercial Tax Officer and Others reported in (1994) 2 SCC 434. It is his further submission that a definition clause does not necessarily in any statute apply in all possible contexts in which the word which is defined may be found therein. The meaning has to be given as assigned to it therein, unless the context otherwise requires. In order to substantiate his contention he relied upon the decision in the case of K.Balakrishna Rao and Others v. Haji Abdulla Sait and Others reported in (1980) 1 SCC 321. It is his further submission that if the above ratio is looked into the power has to be seen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the tribunal, if the tribunal acquits, no offence survives under the Act. Under such circumstances, till the assessment is made, any penalty is imposed and if the order of the tribunal is not finalized, till then the initiation of the proceedings as against the petitioners-accused is not sustainable in law. In order to substantiate his contention he relied upon the decision in the case of K.C.Builders and Another v. The Assistant Commissioner of Income Tax reported in (2004) 2 SCC 731. On these grounds he prayed to allow the petition and to set aside the impugned order and discharge the accused. 7. The learned Sr. Counsel Sri.A.Shankar for Sri.Shyam Sundar M.S. appearing on behalf of petitioner-accused No.5 by reiterating the arguments advanced by the learned Senior Counsel Sri.B.V.Acharya submitted that no notice is issued to set the law into motion as contemplated under Section 153(A) of the Act and as such the proceedings initiated are premature. By referring to Section 55 of the Act, Principal Director is not having any authority to issue sanction. Section 116 of the Act gives who are all the persons appointed and having a control and called as the Income Tax Authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been entrusted has been specifically mentioned, but the Notification dated 13.11.2014 not in the form in which the Notifications have been earlier issued. If that part is taken into consideration, then it clearly goes to show that the power was not intended to be given to the Principal Director of Income Tax. The said Notification is observed and it is a omnibus Notification. On these grounds he prayed to allow the petition and to set aside the impugned order. 9. By supporting the arguments of the learned Senior Counsel, Sri.Shashikiran Shetty, learned Senior Counsel submitted that the written argument filed by the petitioner-accused No.4 has not been considered and the sanction order has been challenged. It is his further submission that sanction has been challenged in the writ petition before this Court and the stay has been granted. However he submitted that subsequently the Court has made a clarification to the effect that the stay is applicable only to the said case and not to other cases. It is his further submission that the Court below has not followed the procedure contemplated under Sections 340 and 195 of Cr.P.C. so as to bring home the guilt of the accused as c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sanction, but the act of accused No.1 is not falling within the category of a public servant while evading the tax and the said act has not been done in discharge of his official duty. Under the said circumstances the sanction as contemplated under Section 197 of Cr.P.C. is not applicable and the said ground urged in this behalf will also not come to the aid of the accused. It is his further submission that Section 2(16) of the Act defines the Commissioner. It includes a person appointed to be a Commissioner of Income Tax or a Director of Income Tax or a Principal Commissioner of Income Tax or a Principal Director of Income Tax. 11. It is his further submission that Section 116 of the Act gives the authorities of Income Tax and classes of Income Tax Authorities for the purpose of the said Act. As per Section 116(ba) of the Act, the Principal Directors of Income Tax or Principal Commissioners of Income Tax, Section 116(c) also says Directors of Income Tax or Commissioners of Income Tax or Commissioners of Income Tax (Appeals). In that context, if the scheme of the Act and hierarchy of the officials is taken into consideration, Act makes it clear that it covers the Principal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Director of Income Tax. Whether he is having an authority or not is a matter of trial. At this juncture it cannot be held that he is not having any authority. It is his further submission that the Notification under which he has issued the sanction has been challenged before the Court but not finalised. In that light also the said contentions are not sustainable in law. On these grounds he prayed to dismiss the petitions. 14. I have carefully and cautiously gone through the submissions made by the learned counsel appearing for the parties and I have given my thoughtful consideration to the Citations quoted by the learned counsel appearing for the parties. 15. The first and foremost contention which was taken up by the learned Senior counsel for the parties are that when the search took place on 2.8.2017 as per Section 4 of the Income Tax Act, it was in the middle of the previous year and the assessment will be made from 1.4.2017 to 31.3.2018 and when the search took place, the total income for the entire previous year having not been computed, there is application to quantify the tax as per the rate fixed by the Finance Act and only after concluding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llows: (i) Adjudication proceedings and criminal prosecution can be launched simultaneously; (ii) Decision in adjudication proceedings is not necessary before initiating criminal prosecution; (iii) Adjudication proceedings and criminal proceedings are independent in nature to each other; (iv) The finding against the person facing prosecution in the adjudication proceedings is not binding on the proceeding for criminal prosecution; (v) Adjudication proceedings by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20(2) of the Constitution or Section 300 of the Code of Criminal Procedure; (vi) The finding in the adjudication proceedings in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceedings is on technical ground and not on merit, prosecution may continue; and (vii) In case of exoneration, however, on merits where the allegation is found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and circumstances cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same is liable to be rejected. 22. The second contention which has been taken up by the learned counsel appearing for the parties are that there is no valid sanction to prosecute the accused in this case. 23. Though several contentions have been raised by the learned Senior Counsel, they have not attach the sanction order dated 28.5.2018 with regard to the application of mind by the sanctioning authority and he has not gone through the records and he has mechanically issued the sanction order. The only attach which has been made is that the sanction order dated 28.5.2018 has been signed by Principal Director of Income Tax under Section 279(2) of the Act, there is no power to pass such sanction order under the said Section and in that light the sanction order is no sanction order and the entire proceedings are going to vitiate. It is further contended that if the sanction order is not issued by a Competent Authority, in that event the Court cannot take cognizance of the offence. In this behalf they have relied upon the decision in the case of State of Karnataka through CBI v. C.Nagaraj Swamy quoted supra at paragraph No.25 it has been observed as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Procedure, Section 19 of the Prevention of Corruption Act or Section 20 of the Prevention of Food Adulteration Act. The basic idea behind such provision is to save persons from frivolous or malicious prosecutions instituted by private persons, who may do so on account of business rivalry or feeling hurt on account of any action taken by a public servant in discharge of his official duty. Anyone can set the machinery of law into motion by either lodging an FIR or filing a complaint in court. The Magistrate can take cognizance of the offence under Section 190(1)(b) CrPC in the former case if the police, after investigation, submits a charge-sheet and in the latter case under Section 190(1)(c) CrPC. In order to protect persons from unnecessary prosecutions and consequent harassment that a provision for sanction is made. The sanction to prosecute is undoubtedly an important matter and it constitutes a condition precedent to the institution of the prosecution. For a valid sanction, it must be proved that the sanction was given in respect of the facts constituting the offence charged. It is desirable that the facts should be referred to on the face of the sanction, but this is not essen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , i.e., on first three occasions. It is only when Section 8(3)(b) uses the expression goods in the second half of the clause, i.e., on the fourth occasion that it does not and cannot be understood in the sense it is defined in Section 2(d). In other words, the goods referred in the first half of clause (b) in Section 8(3) refers to what may generally be referred to as raw material (in cases where they were purchased by a dealer for use in the manufacture of goods for sale) while the said word goods occurring for the fourth time (i.e., in the latter half) cannot obviously refer to raw material. It refers to manufactured goods , i.e., goods manufactured by such purchasing dealer - in this case, newspapers. If we attach the defined meaning to goods in the second half of Section 8(3)(b), it would place the newspapers in a more unfavourable position than they were prior to the amendment of the definition in Section 2(d). It should also be remembered that Section 2 which defines certain expressions occurring in the Act opens with the words: In this Act, unless the context otherwise requires . This shows that wherever the word goods occurs in the enactment, it is not mandatory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein. The opening clause of Section 2 of the principal Act itself suggests that any expression defined in that section should be given the meaning assigned to it therein unless the context otherwise requires. The two-fold reasoning of the Division Bench for holding that the building in question was not a 'buildine' is that on June 10, 1964 (i) there was no lease in force and hence it was not let, and (ii) that on that date the plaintiff had no intention to lease it and therefore it was not to be let. We are of the view that the words any building . . . let . . . , also refer to a building which was the subject-matter of a lease which has been terminated by the issue of a notice under Section 106 of the Transfer of Property Act and which has continued to remain in occupation of the tenant. This view receives support from the definition of the expression tenant in Section 2(8) of the principal Act which includes a person continuing in possession after the termination of the tenancy in his favour. If the view adopted by the Division Bench is accepted then it would not be necessary for a landlord to issue a notice of vacancy under Section 3 of the principal Act when a build ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative language, that is to say, if the statute enacts that it shall be done in such a manner and in no other manner, it has been laid down that those requirements are in all cases absolute, and that neglect to attend to them will invalidate the whole proceeding. (emphasis supplied) Where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all. Other modes of performance are necessarily forbidden. The intention of the legislature in enacting Section 20(1) was to confer a power on the authorities specified therein which power had to be exercised in the manner provided and not otherwise. I am not having any difference of opinion with regard to the ratio laid down in the said decisions. 29. It is the contention of the respondent that Principal Director of Income Tax has been authorized by Notification dated 13.11.2014 and he can exercise the power specified in column (4) of the said Schedule and perform the functions relating thereto in respect of the territorial areas of whole of India. It is not in dispute that the said Notification issued has been challenged before the Court, but the matter is pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax.] 32. By combined reading of these two sections, they clarify that the Commissioner means and includes the Director of Income Tax and Principal Director of Income Tax and the same meaning has to be given in this regard. I am conscious of the fact that what expressions have been given has to be used in the context in which they have been used. It is not the meaning of the persons authorized which is involved in this case, but whether he is having any authority to issue the sanction or not is involved. It is the specific contention of the petitioners that when a Statute or a particular section authorizes a person named therein, he is alone entitled to issue the sanction order and in that context the said Section 279 of the Act should be given the meaning assigned therein. But admittedly, the power has been derived to issue the sanction under the Notification dated 13.11.2014. 33. For the purpose of brevity, I quote Section 279 of the Act, which reads as under: Prosecution to be at the instance of Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. 279(1): A person shall not be proceeded against for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of K.Balakrishna Rao and others quoted supra observed that any expression defined in that section should be given the meaning assigned to it therein unless the context otherwise requires. These sections should be read in continuation with definition and further sections of a statute. It is well settled principles that whenever any confusion or doubt arises in any of the sections, definition clause should be looked to give a proper and exact meaning contained in the statute. In that light, Sections 2(16) and 279 has to be read together. 35. Be that as it may. Under Article 13 of the Constitution of India, there also the interpretation of unless the context otherwise has been interpreted. Law has been defined and it includes any Ordinance, order, bye-law, rule, regulation, notification, custom or usage having in the territory of India, the force of Law. When the said Notification has been challenged and not yet finalized with regard to legality or otherwise, in that light, Notification dated 13.11.2014 as per Article 13 of the Constitution of India is having a force of law and by virtue of the said authority, if the sanction has been issued by the Principal Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: 23.5. The rationale underlying the provision obviously is that if the trial has proceeded to conclusion and resulted in a finding or sentence, the same should not be lightly interfered with by the appellate or the revisional court simply because there was some omission, error or irregularity in the order sanctioning the prosecution under Section 19(1). Failure of justice is, what the appellate or revisional court would in such cases look for. And while examining whether any such failure had indeed taken place, the Court concerned would also keep in mind whether the objection touching the error, omission or irregularity in the sanction could or should have been raised at an earlier stage of the proceedings meaning thereby whether the same could and should have been raised at the trial stage instead of being urged in appeal or revision. 38. This fact also has not been seriously disputed by the learned Senior Counsel that subsequent sanction can also be obtained to prosecute the accused, if there is no proper sanction. Even the similar issue came up before the Hon'ble Apex Court in the case of Manju Surana v. Sunil Arora and Others reported in (2018) 5 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeding and those committed in proceedings other than judicial proceeding, whereas section 195(1)(b) of the Code of Criminal Procedure does not refer to judicial proceedings as such, but mentions proceedings in any Court. That is why the controversy between the parties in the present appeal laid within a very narrow compass. The expression judicial proceeding is not defined in the Indian Penal Code, but there is the definition of the said expression under section 4(m) of the Criminal Procedure Code. Section 4(m) provides that judicial proceeding includes any proceeding in the course of which evidence is or may be legally taken on oath. The expression court is not defined either by the Code of Criminal Procedure or the Indian penal Code, though court is not defined either by the Code of Criminal Procedure or the Indian Penal Code, though court justice is defined by section 20 of the latter Code as denoting a judge who is empowered by law to act judicially alone, or a body of judges which is empowered by law to Act judicially as a body, when such judge or body of judges is acting judicially. 41. What are the factors which are to be considered at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to determine a prima facie case would naturally depend upon the facts of each case and it is difficult to lay down a rule of universal application. By and large however if two views are equally possible and the Judge is satisfied that the evidence produced before him while giving rise to some suspicion but not grave suspicion against the accused, he will be fully within his right to discharge the accused. (4) That in exercising his jurisdiction under Section 227 of the Code the Judge which under the present Code is a senior and experienced court cannot act merely as a Post Office or a mouthpiece of the prosecution, but has to consider the broad probabilities of the case, the total effect of the evidence and the documents produced before the Court, any basic infirmities appearing in the case and so on. This however does not mean that the Judge should make a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial. 42. This proposition of law has been reiterated in Larger Bench in the case of Asim Shariff v. National Investigation Agency reported in (2019) 7 SCC 148. At paragraph No.18, it has been read as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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