TMI Blog1964 (2) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... resent appeal is whether the proceedings before an Income-tax Officer under section 37 of the Indian Income-tax Act, 1922 (XI of 1922) (hereinafter called the Act), can be said to be a proceeding in any court within the meaning of section 195(1)(b) of the Code of Criminal Procedure. This question arises in this way. The appellant, Lalji Haridas, and respondent No. 2, Mulji Manilal Kamdar, are businessmen and they carry on their business in Jamnagar and Bombay respectively. They have known each other for several years past in the course of their ordinary business activities. In the income-tax assessment proceedings of the appellant for the assessment years 1949-50 and 1950-51, respondent No. 2 gave evidence on oath before the Income-tax Officer, Ward A, Jamnagar, on December 4, 1958. In his evidence he denied that he had a son named Nihal Chand and that he had done any business in the name of M/s. Nihal Chand and Co. at Jamnagar. According to the appellant, the said statements were false to the knowledge of respondent No. 2 and were made by him to mislead the Income-tax Officer and to avoid the incidence of income-tax on himself. As a result of the said false statements, the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difficulty. The proceedings before the Income-tax Officer during which, according to the appellant, respondent No. 2 made a false statement on oath, were held by the Income-tax Officer under section 37 of the Act. Section 37(1) deals with the powers of income-tax authorities and provides, inter alia, that the Income-tax Officer shall, for the purposes of the Act, have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (V of 1908), when trying a suit in respect of the matters specified by clauses (a) to (d). Section 37(2) confers upon the Income-tax Officer certain additional powers which can be exercised subject to any rules made in that behalf, provided the said officer is specially authorised by the Commissioner in that behalf, and in exercising these powers, the provisions of the Code of Criminal Procedure, 1898, relating to searches apply. Section 37(3) deals with the question of impounding and retaining any books of account or other documents. That takes us to section 37(4) which is relevant for our purpose ; this section provides that any proceeding before any authority referred to in this section shall be deemed to be a judicial proceeding wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he boundaries of land. It would thus be seen that having provided for a higher sentence in regard to the offence of giving false evidence in any stage of a judicial proceeding, the three explanations of section 193 include within the expression " judicial proceeding " certain proceedings which on a strict construction of the said expression may not have been included under it. For the purpose of the present appeal, however, the only point to notice at this stage is that section 37(4) of the Act makes a proceeding before an Income-tax Officer, held under the said section, a judicial proceeding for the purposes of section 193 of the Indian Penal Code and that means that if an offence of giving false evidence is proved to have been committed by a person in a proceeding before the Income-tax Officer, he would be liable for the higher sentence awardable under the first part of section 193. That takes us to section I95 of the Code of Criminal Procedure. It is well-known that section 195 provides for an exception to the ordinary rule that any person, can make a complaint in respect of the commission of an offence triable under the Code of Criminal Procedure. Section 4(h) of this Code d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue courts, while excluding a Registrar or Sub-Registrar under the Indian Registration Act. In dealing with the question which has been raised in the present appeal what we are required to determine is whether a proceeding before an Income-tax Officer which by virtue of the operation of section 37(4) of the Act, must be held to be a judicial proceeding under section 193 of the Indian Penal Code, is a proceeding in any court under section 195 of the Code of Criminal Procedure. Section 193 makes a distinction between offences committed in any judicial proceeding 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 lies within a very narrow compass. Can it be said that the proceeding which is a judicial proceeding under section 193 of the Indian Penal Code must be held to be a proceeding in any court under section 195(1)(b) of the Criminal Procedure Code. It is on this aspect of the dispute that the arguments on both sides are fairly balanced. In dealin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore a court, because the Income-tax Officer is not a court. In support of his argument, the Additional Solicitor-General has referred us to several statutes where the legislative intention to extend the provisions of section 195 of the Code of Criminal Procedure, to specific proceedings has been carried out by making an express provision in that behalf. Section 23 of the Workmen's Compensation Act, 1923 (VIII of 1923), provides that the Commissioner shall have all the powers of a civil court for the purposes therein indicated, and by an amendment made in 1929, it further lays down that the Commissioner shall be deemed to be a civil court for all the purposes of section 195 and Chapter 35 of the Code of Criminal Procedure. The argument is that where the legislature wanted to extend the provisions of section 195 of the Code of Criminal Procedure, to the proceedings before the Commissioner held under the Workmen's Compensation Act, it thought it necessary to make a specific and express provision in that behalf. A similar provision is contained in section 18 of the Payment of Wages Act, 1936 (4 of 1936). In the Industrial Disputes Act, I947 (14 of 1947), the position is similar to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 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 of 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. Section 3 of the Evidence Act defines a " court " as including all judges and magistrates and all persons except the arbitrators legally authorised to take evidence. Prima facie, there is some force in the contention that it would not be reasonable to predicate about every judicial proceeding that it is a proceeding before a court, and so, it is open to the appellant to urge that though the proceeding before an Income-tax Officer may be a judicial proceeding under section 193 of the Indian Penal Code, it would not follow that the said judicial proceeding is a proceeding in a court as required by section 195(1)(b) of the Code of Criminal Procedure. It is somewhat remark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as it appears that certain provisions in some of the said statutes in terms extend the application of section 195 of the Code of Criminal Procedure to the proceedings to which they relate, the argument does receive support, but we hesitate to hold that the omission to refer to section 195 (1)(b) of the Code of Criminal Procedure in section 37(4) of the Act necessarily means that the intention of the legislature in enacting section 37(4) was merely and solely to provide for a higher sentence in regard to the offence ; under section 193 of the Indian Penal Code if it was committed in proceedings before the Income-tax Officer. It is plain that if the argument of the Additional Solicitor-General is accepted, the result would be that a complaint like the present can be made by any person and if the offence alleged is proved, the accused would be liable to receive higher penalty awardable under the first paragraph of section 193 of the Indian Penal Code without the safeguard correspondingly provided by section 195(1)(b) of the Code of Criminal Procedure. Could it have been the intention of the legislature in making the offence committed during the course of a proceeding before an Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n insult given to him, has now become punishable under the said section. Could it have been intended by the legislature in enacting section 37(4) that whereas an insult offered to a public servant acting judicially, or interruption caused in his proceedings, would normally be cognizable only on the complaint of the public servant himself, the same offence, if committed in respect of the proceedings before an Income-tax Officer, should be cognizable at the complaint of a private party ? The anomaly which would result if the construction suggested by the Additional Solicitor-General is accepted, is, in our opinion, so glaring that the alternative contention urged by Mr. Desai and upheld by the Bombay High Court which avoids the said anomaly appears to be more reasonable and more consistent with the true intention of the legislature. That is why we are not prepared to accept the appellant's argument that the Bombay High Court was in error in dismissing his complaint on the ground that the condition precedent prescribed by section 195(1)(b) of the Code of Criminal Procedure had not been complied with as no complaint had been filed by the Income-tax Officer. It appears that in In re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement was alleged to have been made the Magistrate was debarred from taking cognizance of the case. This contention was based on a submission that the Income-tax Officer was a court within the meaning of section 195(1)(b). This objection was rejected by the Presidency Magistrate. The High Court of Bombay was moved against the Presidency Magistrate's order. But considering itself bound by a Full Bench decision of the court in In re Punamchand Maneklal and the later decision in State v. Nemchand Pashvir the High Court held that an Income-tax Officer when holding proceedings under section 23 of the Income-tax Act, 1922, is a revenue court within the meaning of clause (b) in sub-section (1) of section 195 of the Code of Criminal Procedure. The correctness of the High Court's view is challenged before us by the complainant on the strength of a certificate granted by the High Court under article 134(1)(c) of the Constitution. Section 195(1)(b) is one of the group of sections in the Code of Criminal Procedure which have laid down exceptions to the general rule of criminal law that criminal proceedings can be instituted in a court by any person. To this rule section 3195 along with sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt or not falls to be considered. Section 5 of the Income-tax Act, 1922, mentions six classes of income-tax authorities for the purposes of the Act. The primary function of an Income-tax Officer is the assessment of income that is chargeable to tax under section 3 of the Act, and the determination of the tax payable on it. He has to perform other functions under the Act that are subsidiary and ancillary to this main function. Under section 5(7) the Income-tax Officers are subordinate to the Director of Inspection, the Commissioner of Income-tax and the Inspecting Assistant Commissioner of Income-tax within whose jurisdiction they perform their functions. Under section 5(8) they have to observe and follow the orders, instructions and directions of the Central Board of Revenue. Chapter III of the Act in its several sections states what heads of income, profits and gains shall be chargeable to income-tax and indicates the duties which the Income-tax Officer has to perform for the purpose of his main function of assessing the chargeable income. For instance, deduction under section 7(2)(ii)(a) in respect of conveyance owned by the aspessee or used by him for the purpose of his emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions." The second sub-section empowers any Income-tax Officer specially authorised by the Commissioner to enter and search any building and seize books of account and other documents. Under the third sub-section the Income-tax Officer may impound or retain the books of account and other documents after following certain procedure. The fourth sub-section of this section which does not confer any powers but has been relied on strongly by the respondent will be dealt with in full detail later in this judgment. From the brief summary of the Income-tax Officer's functions given above it is clear that he is a part and parcel of the executive organ of the State. The fact that for carrying out some of these executive functions he will have the powers as are vested in a court under the Code of Civil Procedure has not the effect of converting him into a limb of the judicial organ. It has been held that he is a quasi-judicial authority. That is not sufficient however to make him a court. Before we can call him a court, he must be shown to be a part of the judicial organ of the State. Leaving out for later consideration the effect of section 37(4) it is clear that an Income-tax Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re still not delegates of the judicial power of the State. Their primary function is administrative and not judicial. " It is true that the question whether an Income-tax Officer was a court or a tribunal was not directly for decision in Jaswant Sugar Mills case. It is clear however that as a part of the reasoning which the court applied for coming to the conclusion that the conciliation officer is not a tribunal this court was of opinion that an Income-tax Officer is also not a " tribunal ". Obviously, if it is not even a tribunal it cannot be a court. It is not seriously disputed by Mr. Desai who appeared before us for the respondent that looking at the functions of an Income-tax Officer it is not possible to say that the Income-tax Officer is a court specially after this court's decision in Jagannath Prasad's case mentioned above. His main contention is that even though the Income-tax Officer was not originally a court within the meaning of section 195 of the Code of Criminal Procedure, the deeming provision in section 37(4) has made him a court. Section 37(4) runs thus : " 37. (4) Any proceeding before any authority referred to in this section shall be deemed to be a j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 195 and of Chapter XXXV of the Code of Criminal Procedure, 1898 ". It is worth noticing also that in several other statutes Parliament after stating that certain proceeding shall be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code proceeded to say that for certain purposes it shall also be deemed to be a court. The Evacuee Property Act of 1950 after stating that the enquiry by the Custodian shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code, goes on to say " and the Custodian shall be deemed to be a court within the meaning of sections 480 and 482 of the Code of Criminal Procedure, 1898 ". Another instance of similar legislation is to be found in section 17 of the Evacuee Interest (Separation) Act, 1951, which after stating that any proceeding before the competent officer or the appellate officer shall be judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code adds " and the competent officer or the appellate officer shall be deemed to be a civil court within the meaning of section 480 and section 482 of the Code of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies mentioned in section 37 should be deemed to be a court for the purpose of section 195 of the Code of Criminal Procedure it would have taken care to express that intention in clear phraseology. In any case, argues learned counsel, when in 1956 the old section 37 was wholly recast Parliament which at least then had before it a well established pattern of legislative forms in the numerous statutes mentioned above for expressing an intention that an authority shall be deemed to be a court for the purpose of section 195 or any other provision of the Code of Crminal Procedure there could be no conceivable reason for the failure to follow that pattern. In our opinion, ,there is considerable force in this argument. On behalf of the accused-respondent Mr. Desai suggests that the words actually used, viz., " that proceeding before the authority shall be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code " were by themselves sufficient to give effect to an intention that that authority shall also be deemed to be a court within the meaning of section 195 of the Code of Criminal Procedure. According to the learned counsel, a judicial proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Property Act, 1950, in the Evacuee Interest (Separation) Act, 1950, and in the Displaced Persons (Compensation and Rehabilitation) Act, 1954, to add, after laying down that the proceedings before certain authorities shall be judicial proceedings within the meaning of section 193 and section 228 of the Indian Penal Code, the further words, that " the authority shall be deemed to be a civil court " for certain purposes of the Code of Criminal Procedure. It is especially interesting to note in this connection the provisions of section 11(3) and section 11(8) of the Industrial Disputes Act to which we have already referred. Under section 11(3) as originally enacted every enquiry or investigation by a Board, Court or Tribunal shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code. When Parliament added to this section sub-section (8) what was enacted was that every tribunal shall be deemed to be a civil court for the purpose of section 480 and section 482 of the Criminal Procedure Code, 1898. After the amendment by Act 36 of 1956 the concluding portion of section 11(3) ran thus : " Every enquiry or investigation by a Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upport the contention that " judicial proceeding " can only be a proceeding before a court. There can be no doubt that every proceeding before a court is a " judicial proceeding ". It does not follow, however, that every judicial proceeding is a proceeding before a court. Mr. Desai drew a grim picture of what would happen if the authority a proceeding before which was deemed to be a judicial proceeding within the meaning of section 228 of the Indian Penal Code was not at the same time considered a court within the meaning of section 195. He rightly points out that one consequence will be that if any person offers any insult, or cause any obstruction to a public servant when he is sitting in any such judicial proceeding and thus commits in offence under section 228 of the Indian Penal Code it will be possible for persons other than the public servants to institute a criminal case for such offence. This says the learned counsel, would be a very undesirable thing. We fail to see why this should be considered to be undesirable. But assuming this is so, that is not to our mind a consideration which should compel us to give the words " judicial proceeding " a meaning which they do not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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