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TMI Blog1979 (10) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent declared Rs. 62,102 only as income and understated the profit by Rs. one lakh. The correct gross profit amounted to Rs. 2,38,579, but it was declared as Rs. 1,38,579. Shri B. D. Gupta, P.W. 1, ITO, Ludhiana, who was seized of the tax matter, asked Vidya Sagar, respondent, on June 20, 1967, to explain the discrepancy in the profit, but he could not reconcile the difference, even with the help of his counsel and accountant. Shri B. D. Gupta then recorded the statement of Vidya Sagar, respondent, on June 20, 1967, as exhibit P. E. on solemn affirmation, which is: "I hereby state on solemn affirmation that I am a partner of M/s. Shahzada Hosiery Mills, Ludhiana, having 1/2 share. The other partner is my brother, namely, Anand Sagar. Today I have produced account books for the financial year 1962-63, relevant to the assessment year 1963-64, made up into two ledgers, two cash books (Pacci), one Kachi cash book, one purchase register, one sale book, two copies of sale vouchers. These account books were written by my ex-accountant Sh. Sat Sarup, who is no more in my service. He left my service about four years back. I have submitted account statement consisting of profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofits of Rs. one lakh and also submitted false accounts with it to deflate the profit, the ITO, after sanction and authorisation from the Commissioner, Patiala, filed the present complaint. Shri B. D. Gupta, appearing as P.W. 1 in support of the prosecution case, testified to the facts narrated above. Shri "P. N. Malik had filed the complaint under the authorisation from the Commissioner, Patiala. P. W. 3, Shri Sat Sarup, ex-accountant of the respondent did not identify the signatures of Vidya Sagar, respondent, on Ex. P.H. and other documents. After the recording of the statement of Shri B. D. Gupta, the learned Magistrate charged the respondent and Anand Sagar under s. 277 of the I.T. Act, to which they pleaded not guilty. The respondent and his co-accused further cross-examined Shri B. D. Gupta, after the charge. At the close of the prosecution case, when examined, Vidya Sagar, respondent, denied the case against him. He denied having made any statement to Shri B. D. Gupta, ITO, or the filing of Ex. P.H. He also disclaimed his signatures on these two documents and Ex. P.C. and P.D., the statement of accounts and the balance-sheet. He also denied if the second return filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our of the accused, a presumption certainly not weakened by his acquittal at the trial ; (3) the right of the accused to the benefit of any doubt; and (4) the slowness of an appellate court in disturbing a finding of fact arrived at by a judge who had the advantage of seeing the witnesses." With these principles in the background of our mind, we have gone through the record of the case and have heard the counsel for the parties. The learned trial Magistrate acquitted the respondent mainly on the ground that the admission made by him regarding the deliberate deflation of the profit was not proved to have been made by him. Vidya Sagar has denied having made Ex.P.H. No evidence was examined by the prosecution to the effect that Vidya Sagar had actually signed that application. It depended upon the statement of Shri B. D. Gupta, who, on seeing Ex. P.H., had identified the signatures on it to be of Vidya Sagar, respondent. We agree with the learned trial Magistrate that Shri B. D. Gupta, ITO, had only twice or thrice seen Vidya Sagar, respondent, sign in his presence. After a lapse of quite a few years, at the trial, Shri B.D. Gupta may not have been in a position to say with defini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six months." Exhibit P.C., the accounts of profit and loss, and Ex. P.D., the balance-sheet, are signed by Vidya Sagar, respondent, and these form part of the return filed on February 18, 1964, for the firm, of which he is partner. To pursue that return with the I.T. authorities, Vidya Sagar, respondent, along with his accountant and his counsel appeared before Shri B.D. Gupta, P.W. 1, ITO, on June 20, 1967. He was confronted with the return which was not signed by anyone, and Exs. P.C. and P.D. bearing his signatures. He did not disclaim these at that time nor stated that these had not been filed by him. He, with the assistance of his accountant and his counsel made efforts to explain the discrepancy. This conduct of Vidya Sagar, respondent, shows that he, by express conduct, admitted these to have been filed by him. Not only this, in his statement, Ex. P.H., reproduced in extenso above, for the purpose of reference, he, in clear and unambiguous terms, admitted: " I have submitted account-statement consisting of profit and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the non-signing of the return was also a calculated move on the part of Vidya Sagar, respondent, to seek shelter behind the argument now raised that the unsigned return is not a valid return under the Act and he is not punishable under s. 277 of the Act. Help was also sought for this from the observations of the Income-tax Appellate Tribunal contained in its judgment, Ex. D.A., copy of the judgment pertaining to the question of penalty in this case. The Tribunal described the unsigned return as a waste-paper for the purpose of penalty under the Act for the concealment of the income. That finding does not bind the criminal court as the question of filing the false statement or document for the purpose of s. 277 of the Act was not examined by the Tribunal. The Tribunal had, however, observed in its judgment that there was a conscious effort at concealment of the profit on the part of the assessee. The act of filing Exs. P.C. and P.D., the accounts, which are signed by Vidya Sagar and which have been demonstrated to be false, even by his own admission in Ex. P.E., was deliberate. They are signed by him and also filed deliberately with an intention to escape the higher assessment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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