TMI Blog2021 (12) TMI 1107X X X X Extracts X X X X X X X X Extracts X X X X ..... evision petitions were filed under section 264 of Income Tax Act before Tapas Kumar Dutta during pendency of appeals at Kolkata. Thereafter, pending appeals at Kolkata were sought to be withdrawn by the petitioner but instead of permitting withdrawal, the appellate authority dismissed the appeals. There are materials on record to show that the transfer of PANs and records from Kolkata to Jharkhand was itself a part of the conspiracy as no business or office of the companies actually existed in the place of their transfer to Jharkhand and the transfer was itself a device to facilitate the co-accused Tapas Kumar Dutta to enable him to pass orders in favour of the companies of the petitioner in which the petitioner was a director. The allegations reveal that huge investments were made in the companies of the petitioner by non-existing parties / shell companies - Volumes of transcripts of recorded conversations have been collected which reveal conversation amongst the accused persons although it has been argued by the learned counsel for the petitioner that the conversations do not involve the petitioner. This court is of the considered view that this is not the stage for scrutiniz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Special Judge, CBI, Ranchi in Cr. Misc. Application No.758 of 2018 and 280 of 2019, whereby two petitions for discharge, praying for the same relief, have been rejected in connection with R.C. Case No.03(A)17/D dated 10.07.2017. The alleged offence against the petitioner is under Sections 120(B), 511 of the Indian Penal Code and under Sections 7, 12 and 13(2) read with Sections 13(1)(d) and 15 of Prevention of Corruption Act, 1988. 4. During the pendency of this petition, one interlocutory application was filed by the petitioner being I.A. No.7123 of 2019 challenging the framing of charge against the petitioner by the learned court below vide order dated 26.04.2019. I.A. No 7213 of 2019 was allowed by a coordinate bench of this Court vide order dated 01.08.2019. The charge has been framed for the offence punishable under Section 120(B) of Indian Penal Code read with Sections 7, 12 and 13 (2) read with 13(1)(d) of the Prevention of Corruption Act, 1988 and also under Section 15 of the Prevention of Corruption Act, 1988 read with Section 511 of the Indian Penal Code. 5. This Court also finds from the order-sheet of the present case that while allowing the aforesaid I.A. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objected to such purported large scale transfer of PAN which makes it clear that the officials of Kolkata cannot be said to be hand in glove with the accused persons and if that be so, then the question of criminally conspiring to get PAN transferred does not arise, as most of the people involved in the said process, are not part of the purported design. d. After the transfer of PAN, the filing of the revision under Section 264 of Income Tax Act and the disposal thereof does not run contrary to any provisions of law. At best, even if assuming though not admitting, the Revisional Authority can be said to have committed an error of jurisdiction upon misconstruction of the CBDT Circular dated 26.07.1983. The Department never questioned the final order passed by Shri Tapas Dutta (co-accused) in the revisions filed by Bhawani Construction and Bhawani Alumina before a higher forum and having allowed it to attain finality, no one including the CBI can be permitted to question the legality and propriety of the said orders. Moreover, in a criminal trial the question of correctness of the orders passed by Sri Tapas Dutta cannot be adjudicated. Even otherwise from bare perusal of the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corruption Act. The moot question which arises for consideration is whether a person, who is not a public servant can be charged and tried for an offence of criminal conspiracy to commit an offence under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act (hereinafter referred to as PC Act ). h. It is submitted that assuming, though not admitting, that the petitioner had entered into an agreement with other co-accused persons to get the PAN transferred from Kolkata to Hazaribagh and consequent thereto filed a revision to have the assessment orders set aside, all the above acts do not constitute an illegal act because the same were within the legal framework provided by the Income Tax Act. Thus, in that view of the matter also, the purported agreement between the petitioner and the other co-accused, which is being inferred by the CBI as well as the Learned Court below without any material, cannot constitute an offence of criminal conspiracy. From the facts disclosed in the police papers, it is evident that there is no material far less any admissible evidence to show that this accused had agreed to do or caused to be done, an illegal act or an act which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as are required for establishing criminal misconduct against the accused. In order to even prima facie make out an offence under the provisions of Sections 7 and 13 of the Prevention of Corruption Act, proof of demand has been held to be indispensable essentiality and permeating mandate, which is absent in the case at hand. Thus, it is submitted that in absence of material/evidence showing proof of demand by public servant, a private person cannot be accused to have committed a criminal conspiracy to commit an offence under Sections 7 and 13 of the Prevention of Corruption Act. n. In the instant case, the learned Court below has not at all considered the materials which are in favour of the petitioner, such as the note prepared by Pradeep Kumar Mondal which shows that even in his opinion, the assessment order appeared to have been passed in a hurried manner. Similarly, the ultimate outcome of the revisional order dated 29.12.2016 and order dated 30.12.2016 clearly show that on technical grounds the assessment orders dated 31.03.2015 and 29.03.2015 respectively have been set aside and the matter remanded with certain observations. o. Interestingly, the Court has framed charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Arguments of the opposite party -CBI I. The learned counsel appearing on behalf of the opposite party has vehemently opposed the prayer of the petitioner and has submitted that there is enough material on record to frame charge against the petitioner and accordingly the petition for discharge has been rightly rejected and charge has been rightly framed. He further submits that there is no illegality or perversity or material irregularity in the impugned orders calling for any interference in revisional jurisdiction of this Court. The learned court below has passed a well-reasoned order refusing to discharge the petitioner and has rightly framed charge against the petitioner. He submits that the points argued by the petitioner are devoid of any merits and it is the petitioner and other such companies whose PAN were illegally transferred as a result of evil design and conspiracy by giving fake office addresses within the jurisdiction of the prime accused Tapas Kumar Dutta, the then Principal Chief Commissioner of Income Tax at Hazaribagh and Ranchi and thereafter assessment orders were set-aside by the said prime accused Tapas Kumar Dutta , resulting in huge loss of revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of a criminal trial. Admittedly, the petitioner had given a letter of withdrawal of appeal, but, the Appellate Authority, on a complete misconstruction made certain observations while disposing of the appeal. Such observations cannot be said to be an order on merits. D. The Income Tax Department having accepted the order passed by Sri Tapas Dutta by not impugning the same before any higher forum combined with the fact that there is no evidence direct or indirect to show that the petitioner had paid any illegal gratification or any demand was made by or on behalf of the concerned public servant i.e. Sri Tapas Dutta, the prosecution cannot at this stage question the correctness of the said order and the order passed by the quasi-judicial authority is not open to scrutiny in any proceeding far less a proceeding which is not even collateral in nature. The initiation of this criminal case or even at the conclusion of the trial, the legality and propriety of the revisional orders are completely inconsequential. The prosecution, in order to bring home its charge or even at this stage to make out a prima facie case, has to indicate any material which would suggest that the order was o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt could form an opinion that the accused might have committed offence, it can frame the charge, though for conviction the conclusion is required to be proved beyond reasonable doubt that the accused has committed the offence. (v) At the time of framing of the charges, the probative value of the material on record cannot be gone into but before framing a charge the court must apply its judicial mind on the material placed on record and must be satisfied that the commission of offence by the accused was possible. (vi) At the stage of Sections 227 and 228, the court is required to evaluate the material and documents on record with a view to find out if the facts emerging therefrom taken at their face value disclose the existence of all the ingredients constituting the alleged offence. For this limited purpose, sift the evidence as it cannot be expected even at that initial stage to accept all that the prosecution states as gospel truth even if it is opposed to common sense or the broad probabilities of the case. (vii) If two views are possible and one of them gives rise to suspicion only, as distinguished from grave suspicion, the trial Judge will be empowered to disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposes to adduce to prove the guilt of the accused, even if fully accepted before it is challenged in cross-examination or rebutted by the defence evidence, if any, cannot show that the accused committed offence, then, there will be no sufficient ground for proceeding with the trial . 17.5. It is open to the accused to explain away the materials giving rise to the grave suspicion. 17.6. The court has to consider the broad probabilities, 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, would not entitle the court to make a roving inquiry into the pros and cons. 17.7. At the time of framing of the charges, the probative value of the material on record cannot be gone into, and the material brought on record by the prosecution, has to be accepted as true. 17.8. There must exist some materials for entertaining the strong suspicion which can form the basis for drawing up a charge and refusing to discharge the accused. 18. The defence of the accused is not to be looked into at the stage when the accused seeks to be discharged under Section 227 CrPC (see State of J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 2012-13, Income Tax Authorities at Kolkata conducted scrutiny of income tax returns filed by several companies selected by Computer Aided Scrutiny Selection (CASS) and during such scrutiny, huge undeclared income was found and accordingly addition in the income tax were made against such companies. The companies controlled by co-accused Shri Bishwanath Agarwal and Shri Santosh Shah also figured in these proceedings. It is alleged that in order to get rid of the additions made by Income Tax, Kolkata, they contacted Shri Tapas Kumar Dutta, Principal Commissioner, Income Tax, Ranchi, known to them since his earlier posting in Kolkata. The allegation is that Shri Bishwanath Agarwal and Shri Santosh Shah along with other accused persons entered into criminal conspiracy with Shri Tapas Kumar Dutta for obtaining favourable orders under Section 264 of the Income Tax Act., by getting PANs and records of such companies transferred to the jurisdiction of Ranchi and Hazaribagh so that Shri Tapas Kumar Dutta in lieu of illegal gratification may entertain petitions under section 264 of Income Tax Act and pass favourable orders. 15. It is alleged that in pursuance of the conspira ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Income Tax (Appeals) under Section 264A of the Income Tax Act within Kolkata jurisdiction. However, in the meantime, the prime accused Shri Tapas Kumar Dutta, Principal Commissioner of Income Tax, Ranchi in collusion with operators of these assessee companies entered into criminal conspiracy to reduce the huge tax liabilities arising out of assessment orders at Kolkata and transfer of PANs and records from Kolkata to the jurisdiction at Ranchi/Hazaribagh was a part of conspiracy. Upon transfer of PANS / records, Shri Tapas Kumar Dutta passed orders under Section 264 of the Income Tax Act ignoring the issues raised by the original assessing officers in their assessment orders. 18. The learned counsel has also submitted that arising out of the conspiracy, Shri Bishwanath Agarwal on demand of Shri Tapas Kumar Dutta booked certain flats in the name of M/s Jharna Liquor Pvt. Ltd., a company controlled by him as Director and these flats were later to be transferred in the name of wife of Shri Tapas Kumar Dutta by transferring shares of one holding company of M/s. Jharna Liquor Pvt. Ltd. It has also been pointed out that on 07.07.2017, Shri Tapas Kumar Dutta and Shri Bish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the assessing officer could not verify the share capital introduced in the previous year due to non-compliance of summons by the assessee due to which creditworthiness and genuineness of the transaction could not be established. Consequently, the assessing officer concluded the proceedings and issued a demand of ₹ 1,02,32,402/- vide assessment order dated 29.03.2015. In this case also soon thereafter, the assessee company filed appeal to the Commissioner of Income Tax, (Appeals)-5, Kolkata challenging the aforesaid assessment order. 34. That, during the pendency of the appeal before Commissioner Income Tax, Kolkata the accused petitioner entered into a criminal conspiracy with other co-accused persons and in order to get rid of the huge tax, filed application dated 08.02.2016 (D-15) in case of M/s Bhawani Construction Pvt. Ltd. and application dated 08.02.2016 (D-13) in case of M/s Bhawani Alumina Products Pvt. Ltd. requesting Pr. CIT, Kolkata to transfer their PANs to Hazaribagh under jurisdiction of accused Tapas Kumar Dutta. In the applications it has been mentioned that the assessee companies had shifted their business and operation/books of account to new of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favourably considered by accused Tapas Kumar Dutta. The Commissioner while dismissing off the appeal vide order dated 09.09.2016 (D-12) had held that;- 3. The said letter requesting to withdraw the appeal indicates that the appellant has nothing in its possession to support various grounds of appeal raised by way of form N. 35 filed no. 08.05.2015. 3.1 The A.O. has added share capital contribution U/s 68 of I.T. Act. 1961. The amount of ₹ 2,06,50,000/- added included premium @ ₹ 90/- per share of face value of ₹ 10/-. The appellant could not prove the genuineness of the credit entry as discussed in the assessment order. From the above it is clear from that the Commissioner of Income Tax, Kolkata had dismissed the appeal filed by the accused petitioner and found the assessment order of AO Kolkata in order. Thus, the assessment order passed by the AO Kolkata is found justified by the Commissioner IT Kolkata and in spite of that accused Tapas Kumar Dutta passed favourable order u/s 264 of the IT Act causing undue benefit to the accused petitioner. 38. That, during investigation Shri Nageshwar Ram (PW-28) has stated that M/s Bhawani Construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olders identity, genuineness of transaction and creditworthiness of shareholders and the list of 18 shareholders was furnished, but they were not available at address given and they were not filing their ITRs with the concerned officers. To verify the genuineness and credibility of the said share application money, the assessee was asked to produce director/principal officer of the investing company, but the assessee failed to do so. In the light of the facts mentioned in the said order, the credit amounting to ₹ 6,75,00,000/- in the form of share capital was held to be bogus and was added back under Section 68 of the Income Tax Act. It was also observed that from the perusal of the documents submitted by the assessee, it was found that said Samsung Estates Private Limited had received money through various entities which was paid towards the aforesaid share application on the same day or the subsequent day. 22. Similar was the situation with the other company namely M/s Bhawani Alumina Products Private Ltd. wherein share application money to the tune of ₹ 2,06,50,000/- was received from Samsung Estates Private Limited and the assessee was asked to produce the direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.2015, informed the DCIT that the application for stay of pending demand was pending before the Commissioner of Income Tax and a prayer was made to keep the recovery proceeding pending. However, vide notice under Section 226(3) of the IT Act dated 20.01.2016, the Branch Manager of ICICI Bank was issued tin order to recover the money from the assessee s account maintained with them and the responses received from the bank in this regard were available in the file. The assessee made a request to PCIT, Kolkata to transfer his PAN under Section 127 of the Income Tax Act to Hazaribagh and a copy of the said letter was marked to ITO circle, PCIT Hazaribagh and ITO Ward -I (2) , Hazaribagh and the said request was accompanied by a copy of receipt and form no. AOC 5 of Companies Act. The said document showed that the assessee was maintaining books of account at 186 Lepo road, Bowden Bazar, Hazaribagh. The assessee filed petition under Section 264 of Income Tax Act before PCIT Hazaribagh. The ITO, Hazaribagh vide letter dated 06.05.2016 directed ITO ward 2 Hazaribagh to submit a report on the assessee s revision petition and vide order dated 29.04.2016, the assessment record of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of ₹ 2,98,00,445/- vide demand notice dt. 25.2.15. This petitioner in furtherance of criminal conspiracy with co-accused Bishwanath Agarwal and Santosh Shah intentionally showed to have shifted his business operation and books of accounts to new office at 186, Lepo Road, Bowden Road, Hazaribag. Consequently, the PAN was got transferred from ITO Circle 13(1) Kolkata to ITO Ward 1(2) Hazaribag. Soon thereafter this petitioner in furtherance of the said criminal conspiracy filed petition u/s 264 of the I.T. Act for revision of assessment order dt. 31.3.15. Vijay Kumar, ITO (Tech), Hazaribag, on the directions of Pr. CIT, Tapas Kumar Dutta, issued notice of hearing dt. 14.7.16 to the Pr. Officer of M/s Bhawani Construction Pvt. Ltd. to appear before PCIT on 28.7.16. Tapas Dutta heard the case on 21.12.16, attended by Bishal Agarwal, C.A. and in pursuance of the conspiracy, the co-accused Tapas Kumar Dutta abused his official position and ignored the observations made by DCIT Kolkata and passed order dt. 29.12.16 setting aside the assessment order dt. 31.3.15 saving the assessee from paying the income tax imposed by Assessing Officer, Kolkata. Further this petitioner being a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y this petitioner after submission of charge sheet in this case against the petitioner which also supports the prosecution story and amounts his admission of the alleged offence and it is clear that admittedly mere transfer of PAN, exercise of power u/s 264 of I.T. Act is not an offence but at the same it is established by the materials collected by the investigating agency that during the investigation there were recovery of huge bribe approx. ₹ 4 crores in cash along with other immovable properties were made from the co-accused Tapas Kumar Dutta which is the circumstances against this accused and it has come through the evidence that during the investigation, his huge tax liability was set aside by co-accused for reassessment which are the circumstances attribute conspiracy of this petitioner with co-accused and it is admitted fact by this petitioner also that after investigation de-novo reassessment of his tax liability of the aforesaid companies were increased and same were deposited which is the subsequent development after submission of charge-sheet in this case which also supports the prosecution story. 27. The learned court below found that exercise of power u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is prima-facie material to show that in the criminal conspiracy Sri Tapas Kumar Dutta, Principal Commissioner of Income Tax, Ranchi, Sri Arvind Kumar, Additional Commissioner of Income Tax, Ranchi; Sri Ranjit Kumar Lal, I.T.O. (Tech), Ranchi; Sri Subir Kumar Ganguly, Officer, Income Tax Ranchi; many businessmen, chartered accountants and others were involved and it is not in dispute that investigation is still going on. 30. Volumes of transcripts of recorded conversations have been collected which reveal conversation amongst the accused persons although it has been argued by the learned counsel for the petitioner that the conversations do not involve the petitioner. This court is of the considered view that this is not the stage for scrutinizing the transcripts of recorded conversations in order to record any direct or indirect links of the petitioner with the alleged offence. Suffice is to say that there are sufficient incriminating materials and circumstances, collected against the petitioner during investigation, to constitute prima facie case indicating involvement of the petitioner in the alleged offence. 31. The learned counsel for the petitioner has relied upon fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e out an offence under the provisions of Sections 7 and 13 of the Prevention of Corruption Act, proof of demand has been held to be indispensable essentiality and permeating mandate, which is absent in the case at hand [State through Central Bureau of Investigation v. Dr. Anup Kumar Srivastava, (2017) 15 SCC 560]. This Court is of the considered view that there is enough material on record to prima-facie make out a case of demand of illegal gratification by the co- accused namely Tapas Kumar Dutta and payment to him by other co-accused in criminal conspiracy with the petitioner for passing orders favorable to the petitioner after getting the PANs of the two companies of the petitioner transferred to the jurisdiction of Tapas Kumar Dutta against whom sanction for prosecution under section 19 of the Prevention of Corruption Act has already been given by the competent authority. Thus, the judgement relied upon by the petitioner does not help the petitioner at this stage of the case. c. C.K. Jaffer Sharief v. State, (2013) 1 SCC 205 (paras-14, 16, 17 18), A. Shivaprakash v. State of Kerala, (2016) 12 SCC 273 to submit that it is equally well settled that a violation or breach of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndue favour to the petitioner in conspiracy with others and is a co-accused in this case for which sanction for prosecution has also been granted. The orders of remand passed under Section 264 of the Income Tax Act have the effect of nullifying the demand raised pursuant to the orders of assessments. 32. The sanction for prosecution of Sri Tapas Kumar Dutta, the then Chief Commissioner of Income Tax, Ranchi has been granted under Section 19 of the Prevention of Corruption Act and a copy of the same has been produced by the opposite party before this court. It is not in dispute that the trial has already commenced. 33. This court does not find any illegality or perversity or material irregularity in the impugned order of refusing to discharge the petitioner and also the impugned order framing charge against the petitioner. This court finds that the impugned orders are well reasoned orders based on materials on record and do not call for any interference in revisional jurisdiction of this court. 34. As a cumulative effect of the aforesaid findings, the present revision petition is dismissed. 35. Interim order, if any, stands vacated. 36. Pending Interlocutory applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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