Delhi H.C : By this petition under s. 482 of the Code of Criminal Procedure, 1973 (for short Cr.PC) r/w Art. 227 of Constitution of India petitioner is seeking quashing of the order dt. 27th Oct., 1998

High Court Of Delhi

N.K. Jain vs. Union Of India & Ors.

Sections 277, 278E

Asst. Year 1991-92

S.K. Agarwal, J.

Criminal Misc. No. 4602 of 1998

9th November, 2001

Counsel Appeared

Anoop Sharma, for the Petitioner : R.D. Jolly with Ms. Prem Lata Bansal, for the Respondents



By this petition under s. 482 of the Code of Criminal Procedure, 1973 (for short Cr.PC) r/w Art. 227 of Constitution of India petitioner is seeking quashing of the order dt. 27th Oct., 1998, passed by the Court of Addl. Chief Metropolitan Magistrate, Delhi dismissing his application for discharge and for quashing of the proceedings arising out of Criminal Complaint No. 11/94 under s. 277 of the IT Act (hereinafter referred to as “the Act”) r/w ss. 193 and 196 of the IPC.

2. Facts in brief are : that the Asstt. CIT filed a complaint under abovenoted sections against the petitioner, alleging therein that on 8th Feb., 1991 search and seizure operation under s. 132(1) of the Act was carried out at the premises of the petitioner and the valuables comprising of following items were seized :

During the course of the search petitioner surrendered an income of Rs. 1,60,00,000 as his income for the current year. In his statement, he claimed that the said income was earned out of his commission and trading business in clothes, gold and silver ornaments. He also claimed undisclosed income for the year 1991-92, and stated that he would explain his assets and income of Rs. 29,58,280 subsequently as he did not remember the details. However, in subsequent letters to the IT Department he opted to change the above surrendered income from Rs. 1,60,00,000 to Rs. 1,30,00,000 claiming that the amount of Rs. 29,50,200 was included in the earlier disclosure statement. In each of his subsequent communications dt. 23rd April, 1991, 13th March, 1992 and 17th March, 1992, petitioner took different stands. His statements under s. 131 of IT Act were recorded in accordance with the procedure. It is alleged that these statements are contrary to each other. The assessment was completed and an income of Rs. 1,34,16,173 was assessed by the AO vide order dt. 23rd March, 1993. Thus, it was alleged that the petitioner/accused made statements knowing them to be false or having reasons to believe that the same were false. The petitioner was summoned. The petitioner moved an application under s. 245(2) for recalling the order of summoning and for discharge, inter alia, pleading that earlier petitioner took time to submit the details, as he was not sure of the factual position, and that subsequently he realised that amount of Rs. 29 lakhs was surrendered in excess and the amount of Rs. 1.3 crores covered the entire amount. Thus the petitioner sought to revise the surrendered income to Rs. 1.3 crores by his letter dt. 9th March,1991, and 25th March,1991. The ACMM vide impugned order dt. 27th Oct., 1998, rejected the contentions of the petitioner observing that it is a warrant trial case and that witnesses have yet not been examined and, therefore, the application for discharge was not maintainable. I have heard the learned counsel for the parties and have been taken through the record.

Learned counsel for the petitioner vehemently argued that the prosecution in this case is not for concealment or evasion of tax but only on the ground that the accused made false statements before the IT authority which are contradictory in material particulars. Sec. 277 of the Act cannot be invoked in a case, where the accused gives incorrect statement first, which he did not know to be false or where it was not given to deceive or mislead. It was further argued that initially at the time of search, in the first statement petitioner disclosed his income of X+Y and in respect of “Y” income it was stated that details would be submitted later but after verifying the details, he stated that income “Y” is also included in the disclosure of income “X”. Learned counsel for the Revenue argued to the contrary. Admittedly, it is a warrant case and after the petitioner was summoned no witness has been examined.

The law with regard to quashing of the criminal proceedings arising out of FIR and criminal complaint is well- settled. Quashing is permissible in terms of principle laid down in the State of Haryana vs. Bhajan Lal AIR 1992 SC 604 and several subsequent judgments. Evidence at this stage cannot be appreciated. Sec. 278E of the Act provides that for prosecution of the offence under the Act which requires culpable state of mind on the part of accused the Court shall presume the existence of such mental state. It reads : Sec. 279(E). Presumption as to culpable mental state.—(1) in any prosecution for any offence under this Act which requires a culpable mental state on the part of the accused, the Court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution. Explanation : In this sub-section, “culpable mental state” includes intention, motive or knowledge of a fact or belief in, or reasons to believes, a fact. (2) For the purposes of this section, a fact is said to be proved only when the Court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability.”

The rule of evidence thus stands changed by the above section. In the prosecution for an offence under the Act it is for the accused to prove his defence, which he can do by cross-examining the prosecution witnesses or by leading defence evidence.

6. I have been taken through the allegations made in the complaint and the supporting documents. At this stage taking the allegations made in the complaint on their face value and accepting the same in entirety, it cannot be said that, prima facie, the offence alleged is not made out against the petitioners. The detailed examination of the allegations and the documents is being avoided as the trial is yet to commence.

For the forgoing reasons, I find no merit in the petition and the same is dismissed. Trial Court record be sent back forthwith. Any observations made herein shall not affect the merits of the case.

[Citation : 254 ITR 388]

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