Madras H.C : Whether the order of acquittal of the accused 1 and 2 by the trial Court is liable to be set aside.

High Court Of Madras

ITO vs. J. Chitra & Anr.

Sections 276C, 277, 278, 278E

Asst. Year 1982-83

A. Raman, J. Criminal Appeal No. 299 of 1987

22nd December, 1998

Counsel Appeared

T. Sivanathan, for the Appellant : K. A. Panchapagesan, for the Respondent

JUDGMENT

A. RAMAN, J. :

The ITO, City Circle IV (II) filed a complaint before the Addl. Chief Metropolitan Magistrate, against Smt. Chitra, Thiru R. Janardhanam and Thiru Chinni Mohan Rao as the accused, alleging that they have committed offences punishable under ss. 120B, 193, 196, 420 IPC, and s. 276C(1), 277 and 278 of IT Act.

2. The gist of the complaint is as follows: For the sale of property comprised in Door No. 35, Annal Pillai Street, Madras-1, the 1st accused made a false verification-cum-declaration in Form 34A while applying for 230A certificate. The 2nd accused who is the husband of A1, is the joint executant of the document regarding the sale of the said property. The 3rd accused is an income-tax practitioner. He filled up the particulars in the clearance certificate before submitting to the issuing authority, presented the same before the ITO, collected back the certificate and got the sale deed registered, himself being a witness for the same and thereby abetted A1 and A2 in the commission of the said offence.

3. On behalf of the complainant four witnesses were examined as D.Ws. 1 to 4 and Exs. P1 to P22 were marked. The accused had examined four witnesses as D.Ws. 1 to 4 and Exs. P1 to P4 were marked on their side. The learned Addl. Chief Metropolitan Magistrate, F.O.II, Egmore, Chennai, after trial, acquitted the accused 1 and 2, but found the 3rd accused guilty under s. 278 of the IT Act under two counts and sentenced the 3rd accused to undergo rigorous imprisonment for six months under each count and to pay a fine of Rs. 500. Aggrieved by the order of acquittal passed by the Addl. Chief Metropolitan Magistrate in F.O.C.C. No. 571/86, dt. 23rd Dec., 1986, acquitting the accused 1 and 2, the complainant has preferred the Appeal in C.A. No. 299 of 1987.

4. In the meanwhile, the 3rd accused who was found guilty by the Addl. Chief Metropolitan Magistrate, preferred an appeal against the conviction and sentence imposed on him, to the Court of Sessions in C.A. No. 1 of 1987. The learned Principal Sessions Judge City Civil Court, Chennai, accepted the appeal preferred by the 3rd accused and acquitted him, setting aside the conviction and sentence passed by the Addl. Chief Metropolitan Magistrate, F.O. II. Therefore, the Department has preferred the appeal in C.A. No. 76 of 1990, challenging the acquittal order passed by the Principal Sessions Judge, in C.A. No. 1 of 1987, whereby be acquitted the 3rd accused.

5. The above two appeals were taken together. Though a counsel from among the panel of lawyers suggested by the legal aid committee was appointed to represent the respondents in C.A No. 299 of 1987, there was no appearance on behalf of the respondents, even though the hearing of these appeals went on for a number of days. Thiru K.A. Panchapagesan, learned counsel for the respondents in C.A. No. 76 of 1990 was alone present. The arguments of the learned counsel for the Department the appellant, Thiru T. Sivanatham and the argument of the learned counsel for the respondent in C.A. No. 76 of 1990 was alone present. The argument of the learned counsel for the Department the appellant, Thiru T. Sivanatham and the argument of the learned counsel for the respondent in C.A. No. 76 of 1990, Thiru K.A. Panchapagesan, were heard. A common order is passed hereby in the above two appeals as under.

6. The common point for determination is : (i) Whether the order of acquittal of the accused 1 and 2 by the trial Court is liable to be set aside. (ii) Whether the order of acquittal passed by the lower appellate Court, acquitting the 3rd accused, is liable to be set aside?

7. The Point:—The 1st accused is the wife of the 2nd accused. The 1st accused was the owner of a house property comprised in Door No. 35, Anna Pillai Street, Chennai-1. She sold the same on 31st July, 1981, after obtaining the clearance certificate under s. 230A of the IT Act. The 2nd accused is the joint executant of the sale deed. The 3rd accused is the income-tax Practitioner, who as alleged filled up those particulars in the clearance certificate, before submitting it to the issuing authority and helped in the registration of the document of sale. The property was acquired by the 1st accused in a partition. Sec. 230A of the IT Act provides that whoever transfers a property exceeding a value of Rs. 50,000, he must obtain a clearance certificate in Form No. 230A from the ITO and produce the same along with the document to be registered. The 1st accused presented an application for the grant of certificate under s. 230A, on 31st July, 1981 to the ITO, City CircleIII(10) Madras-6. In the application, she has given her address at No. 15, Adiyappa Naicken Street, Madras. The same address was given as regards the 2nd accused, her husband. The ITO issued the certificate, believing the declaration to be true and the certificate was collected by the 3rd accused. The 3rd accused figured as a witness to the registration of the document which was registered on 31st July, 1981 by the Joint sub-registrar, No. III Madras (North). Investigation revealed that the accused 1 and 2 never resided at Door No. 15, Adivappa Naicken Street, and they were residing only in Old No. 15, New No. 45, Strotten Muthiah Mudali Street, Chennai-1. But, in the document that was registered on the same day, the 1st accused has given her address as No. 45, Strotten Muthian Street, Chennai-1, whereas in Form 230A as well as in the draft sale deed, the address given was No. 15, Adiyappa Naicken Street, Chennai. The 1st accused has stated that she handed over signed blank application form for income-tax clearance certificate to the

3rd accused, and the 3rd accused filled up that form. Only the ITO having jurisdiction over the permanent residence of the vendor can take action for collecting the income-tax on capital gains.

8. The prosecution case is that it is with a view to evade income-tax on capital gains leviable under s. 45 of the IT Act, 1961, purpose of wrong address has been given as the notice under s. 139(2) has to be issued to the correct address of the declarant, for the asst. yr. 1982-83 relevant for the previous year ended 31st March, 1982. To defraud the exchequer of its legitimate revenue and to mislead and deceive the ITO, the accused in furtherance of common intention, committed offences punishable under ss. 120B, r/w ss. 193, 196 and 420 of the IPC and ss. 276C, 277 and 278 of the IT Act, 1961. The case is that the accused have conspired to fabricate false evidence and to deceive the ITO, and fraudulently and dishonestly induced him to deliver Form No. 34A clearance certificate under s. 230A of the IT Act, by citing a different and false address, which enabled the 1st accused to wilfully evade capital gains tax chargeable or imposable under s. 45 of the IT Act. In pursuance of the said conspiracy, the accused have fabricated false address in Form No. 34A and intentionally gave false evidence in the judicial proceedings and thus they are guilty under s. 193 of IPC r/w s. 136 of the IT Act. The accused corruptly used as true or genuine address in the form of false address in Form No. 34A and the accompanying draft sale deed, knowing it to be false or fabricated. All the accused have conspired and have cheated and thereby dishonestly induced the ITO to deliver Form No. 34A which is valuable security by submitting Form No. 34A containing false address, they have caused circumstances to exist which have the effect of enabling her to evade capital gains tax leviable for the asst. yr. 1982-83. The 1st accused made a statement in the verification in the Form No. 34A, in pursuance of the said conspiracy. The 2nd accused in the course of transaction, delivered Form No. 34A containing false statements about the address and the 3rd accused abetted or induced the 1st and 2nd accused to deliver the statement and the declaration in Form No. 34 and thereby helped the accused 1 and 2 to evade the tax.

9. The 1st charge framed against the accused 1 to 3 is under s. 120B of IPC. Charge No. 2 to 6 are against the 1st accused under ss. 193, 196, 420, 276C(1) and 277 of the IT Act. Charges 7 to 11 are against the 2nd accused for offences under ss. 278, 193, 196, 420 IPC and s. 277 of the IT Act. The 12th and 13th charges are framed against the 3rd accused for the offences punishable under s. 278 of the IT Act under two counts.

10. The trial Court acquitted all the accused of the charge viz., accused 1 to 3 under s. 120B of the IPC. The 3rd accused preferred an appeal to the Court of sessions in C.A.No. 1/1987. As regards the acquittal of the 3rd accused under s. 120B, no appeal was preferred by the Department. Therefore, the position is that though as against the acquittal of the accused 1 and 2 there is an appeal as against the acquittal of all the accused under s. 120B, there is no challenge. When the 3rd accused challenged his conviction, the Department did not choose to prefer an appeal against the acquittal of the 3rd accused under s. 120B. The lower appellate Court in Criminal Appeal No. 1 of 1987 set aside the conviction of the 3rd accused under s. 278 of the IT Act, which is challenged by the Department in Criminal Appeal No. 76 of 1990. Therefore, as regards the acquittal of the 3rd accused for the offence under s. 120B, there is no challenge. at all. In such circumstances, one has to hold that the Department having failed to question the acquittal of the 3rd accused for an offence under s. 120B and when that acquittal was more or less confirmed by the lower appellate Court, the Department cannot now be heard to attack the finding of the lower appellate Court as regards the acquittal of the charge under s. 120B. That finding has remained unchallenged, though the Department had no opportunity to canvass the correctness of the finding when the 3rd accused preferred an appeal against the conviction. The Department having failed to do so, cannot now, by filing appeal against the acquittal of the 3rd accused by the lower Appellate Court, hope to have the matter atlarge again as the said finding has remained untouched without any challenge by the Department. I will first take up for consideration, the case of the 3rd accused. The 3rd accused is an income-tax practitioner. The charge against the 3rd accused is under s. 120B of IPC and 278 of the IT Act. As regards s. 120B I have already pointed out that the trial Court acquitted the accused of the charge under s. 120B and no appeal was preferred by the Department questioning the said finding and consequent acquittal of the accused for the offence under s. 120B. Therefore, as the finding of acquittal of the charge under s. 120B has not been challenged, it follows that neither the 3rd accused nor the accused 1 and 2 can be held guilty of the offence under s. 120B.

As regards the allegation against the 3rd accused for the alleged offence under s. 278 of the IT Act, it is necessary to refer to the complaint. The allegation in para 3 is that the 3rd accused who is an income-tax practitioner filled up false particulars in the clearance certificate. It is further stated that in her letter dt. 6th Sept., 1985, the 1st accused has stated that she handed over a signed blank application form of income tax clearance to the 3rd accused and it is the 3rd accused, who filled up that form. In para 15, it is stated that in pursuance of the above conspiracy, the 3rd accused abetted the accused 1 and 2 to deliver the statement and declaration in Form No. 34A, dt. 31st July, 1981, containing false address of the 1st accused and helped her to evade capital gains tax for the asst. yr. 1982-83 and as such he has committed the offence punishable under s. 278 of the IT Act.

It is not in controversy that the accused 1 and 2 were not income-tax assessees. The allegation in the complaint is that the 1st accused has given the statement that she handed over the blank form with her signature and the particulars were filled up by the 3rd accused. Thus it is a statement made by the co-accused. A statement given by a co-accused cannot be treated substantial evidence against other accused nor can form the basis of conviction. Therefore, even assuming that the 1st accused has given such a statement, merely on the basis of the same, it cannot be put forward by the Department that the case against the 3rd accused is made out. Here we have to find out whether there is any material at all to show that those particulars viz., particulars concerning the false address found in the application were furnished by the 3rd accused. P.W. 1 has categorically stated in the course of cross- examination that he cannot say whether the contents of Ex. P. 1 application form were written by A1 or any other person. He also admitted that the draft sale deed Ex P2 did not contain the signature of the vendor. He has further stated categorically that he cannot say as to who filled up Ex. P6 including the address therein. It has been further clarified that he cannot say whether A1 signed Ex. P1 and P2, signed Ex.P6 in blank and handed over them to A3. He further admitted that question of his being misled by Ex.P1 and P6 about the tax liability at the time of issue of P4 and P9 did not arise. He further stated that he is not personally aware whether Ex.P1 and P6 were filled in by the 3rd accused in the office. P.W.2 has nothing to say about this aspect. He only speaks to the enquiry made by him of A1 and A2. He further admitted that he came to understand on enquiry that A1 and A2 are literate and can read and write. He admits that he did not ask A1 and A2 by showing handwriting in P1 and P6 and asked them whether they can identify the same. He further stated that he did not ascertain from A1 and A2 whether they had given any instruction to A3 to fill up the particulars. P.W.3, who is said to be familiar with the signature of A3 would admit in the course of cross-examination that he cannot say whether the writing in Exs. P1 and P6 are that of A3 and that he has no personal knowledge that Exs. P2 and P7 were drafted by A3. P.W. 4 has been asked to speak to the laying of the complaint. He could not throw any light on this aspect, for he has admittedly stated that he is not familiar with the handwriting or signature of A3 either in English or any other language, and that he did not see Exs. P1 and P6. He further admitted that he does not know as to who drafted the sale deed. When A1 was examined under s. 313 of CrPC of course she has only stated that she signed the form and that she did not give the address particulars. D.W. 2, the auditor would say that the accused 1 and 2 did not tell them that the work of filling the return of income for 1982-83 was entrusted to A3.

It is stated by him that Ex.P.21 was signed by A1 on 16th June and it was duly filled up by one of the staff. Thus, the materials placed on record are not sufficient to come to any conclusion that address particulars were filled up by the 3rd accused. It is also to be pointed out that no step was taken by the Department to have the handwriting examined by an expert, nor the procedure laid down in s. 45 of the Evidence Act has been complied with in this case. Therefore on the basis of the materials placed, it is difficult to come to a conclusion that the address particulars were filled up by the 3rd accused or that he abetted the commission of offence.

As I have already pointed out and as laid down by the apex Court that merely on the basis of the statement of a co- accused, it is not possible to hold that the allegation against the 3rd accused has been proved satisfactorily. There must be sufficient materials in the shape of oral and documentary evidence to sustain the case of the prosecution. None of the witnesses examined on the side of the prosecution has stated that the address particular contained in the application forms P1 and P6 were filled up by A3. Merely because the 3rd accused is an income-tax practitioner, we cannot presume that the accused 1 and 2 approached him for his services therefore he must have filled up the same. Even assuming that the application for grant of clearance certificate was presented by the 3rd accused for and on behalf of the 1st and 2nd accused, from that single circumstance, it cannot be inferred that the other particulars contained therein were all filled up only by the 3rd accused. To establish the hypothesis of guilt and to rule out any other conclusion, the circumstantial evidence adduced must be such that every possibility of hypothesis should be unbroken. But, in this case, there is no circumstantial evidence as well. As rightly pointed out by the learned counsel for the appellant, it is not the suggestion or case of the prosecution that it is A3, who prepared or filled up the address particulars in P2 as well. Therefore, mere suspician cannot take the place of proof.

Learned counsel for the Department referred to the provisions in the IT Act which relate to presumption as to culpable state of mind. The relevant section in s. 278E, which reads as follows: “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 says that “culpable mental state” includes intention, motive or knowledge of a fact or belief in, or reason to believe a fact.”

It further clarifies that “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.” Therefore, on the basis of s. 278E of the IT Act, the learned counsel for the Department would urge that the 3rd accused being an income-tax practitioner has been approached by the accused 1 and 2 to submit the application, seeking income-tax clearance certificate, and when there is evidence to show that the same was presented by the 3rd accused on behalf of the accused 1 and 2 and when the address particulars containing therein as on the face of it are false, the culpable state of mind has to be presumed, moreso when the 3rd accused is said to be residing in the opposite house of the accused 1 and 2.

In my opinion, this contention rather stretches too far the presumption. The 3rd accused was only a professional. Assuming that the accused 1 and 2 approached him for obtaining the income-tax clearance certificate and the application was presented by the 3rd accused from that one cannot draw an inference that any false particulars contained in that application was made with the knowledge of the income-tax practitioner, or with his consent or on his direction. Here, as pointed out already, as to who presented the application, there is no definite material. The address particulars have not been subjected to any examination by any expert. The prosecution’s witnesses would say that they did not know as to who filled these particulars. The statement given by one of the co-accused that it is the 3rd accused, who filled up the particulars can never be taken as evidence or basis to build up the prosecution case. In such circumstances it is not a case where s. 278 can be held to be attracted. Even otherwise as indicated in the very section, this is not a case where the Court can presume the existence of such mental state for the reasons indicated already. Only if there is necessary evidentiary basis, the presumption would come into play. Here, there is no evidence to show that the address particulars were filled up by the 3rd accused. Nor it is stated that he was aware of such a false particular being furnished and in spite of the same, be presented the application before the IT authority. Hence, the argument based upon s. 278 of the Act is not available to the Department. Hence, it follows that the judgment of the lower appellate Court, acquitting the 3rd accused is proper and it cannot be interfered with.

It has to be now seen whether the acquittal of the accused 1 and 2 by the trial Court is in order. As regards the 2nd accused, admittedly, the 2nd accused is not and was not the owner of the property relating to which the application under s. 230A of the IT Act, was filed. He figured just as a joint executant of the sale deed, perhaps it was entitled upon the vendor. The evidence adduced by the Department is to the effect that he had nothing to do with the property. Therefore, it cannot be stated that the 2nd accused had some interest in the property and with a view to avoid tax imposable or leviable with reference to the property he has made a false statement. The order granting a certificate under s. 230 will only to go to the benefit of the person, who owns property. Where a person owns the property and purports to transfer, assign, limit or extinguish the right, title or interest of any person to or in any property valued at more than Rs. 2 lakhs (Rs. 50,000-old) on the date of the sale deed, s. 230A requires that such a document shall not be registered by the registering authority unless the AO concerned certifies as specified under s. 230A of the IT Act. Assuming that a false particular regarding the address is given, it can only be stated that such a false particular was furnished by the owner of the property with a view to enable her to obtain a certificate under s. 230A of the Act, but a person who has no legal interest, claim or title over the said property by mere reason of his being made a party, to a document cannot be held to have committed an offence as alleged by the Department. He was not concerned with the property, if he gives the correct address, equally it can be stated that as he is not the owner of the property he has given the false statement. It is not the case here that the 2nd accused has given a declaration that he is the owner of the property. Therefore, strictly speaking I am of the view that the offence as alleged against the 2nd accused cannot be held to have been proved. For he is not the owner of the property, any address particulars given by him whether correct or incorrect cannot make him liable because he is not the beneficiary in the order passed by the IT authority under s. 230A. Even otherwise, one has to see whether it can be stated that the offences as against the accused 1 and 2 has been made out. It is the admitted case of the Department that the accused 1 and 2 were not assessees of income-tax, it is not the case that they were income-tax assessees and they had suppressed the facts and applied for clearance certificate on the ground that they are income-tax assessees. Further, it is also not in dispute that when normally a person, who is not an income-tax assessee, makes request under s. 230A for grant of certificate enabling him to dispose of a property of more than the value of Rs. 50,000, he will be entitled to the same. It is also not the case that this No-objection certificate or the certificate as contemplated under s. 230A can be granted only by a particular IT authority. P4 is the certificate issued in this case by the 10th ITO, City Circle III. The allegation is that in the draft sale deed, the accused 1 and 2 declared their address as at No. 15, Adiyappan Naicken Street, Madras, and the ITO, issued the certificate believing the declaration to be true. According to the complainant, the investigation revealed that the accused 1 and 2 never resided in No. 15, Adiyappan Naicken Street, Madras and on the date of submitting the application they were residing only at Old No. 15, New No. 45, Strotten Muthiah Mudali Street, Chennai-1. The allegation is that such a false address has been given with a view to evade income-tax on capital gains. The address that has been given viz., No. 15, Adiyappan Naickon Street, Chennai-1, falls under the jurisdiction of the ITO, City Circle III, Chennai-6. If the address is No. 15, Strotten Muthiah Mudali Street, the same would fall under the jurisdiction of a different ITO. But state that would normally entitled title certificate. But, even if the said address falls under the jurisdiction of a different ITO, it is not known how by giving a different address, the income-tax can be evaded. Normally the accused 1 and 2 are entitled to income-tax clearance certificate under s. 230A of the Act, whether it is the ITO, City Circle III(10),the officer, or some other ITO having jurisdiction over other City Circle. It is not an though only that ITO viz., City Circle III(10) alone is eligible or entitled to issue the certificate. Therefore, it is not known how the giving of a different address will lead to any inference that an attempt to evade tax imposable has been made by the accused 1 and 2. The accused 1 and 2 were not the income-tax assessees on the date when they made a request by filing an application under s. 230A of the IT Act. Therefore, this aspect of the case the Department, has not properly explained. The complaint is to the effect that such a false address has been given with a view to evade income-tax on capital gains. It is stated that only the ITO having jurisdiction over the permanent address of the vendor can take action for collecting income-tax on capital gains. The prosecution has not produced any rules to show that it is so.

The ITO City Circle III(10) who has granted this certificate is entitled to proceed against and levy capital gains. If the address is No. 15, Adiyappan Naicken Street, according to them, it is only that officer in charge of that circle alone can initiate action. It seems to the prosecution case that it is only the address that counts for the purpose of reckoning tax and not the transaction. For the evidence of P.W. 1 does not throw any light on this aspect. On the other hand, his evidence is destructive of the prosecution case. P.W.1 who was the ITO, City Circle III(10) on the date of issuance of the clearance certificate has not stated that he had no jurisdiction to initiate action for levying tax on capital gains or that it is only the officer having control and jurisdiction over No. 15, Strotten Muthiah Mudali Street, who has the jurisdiction. P.W.2 States that the accused 1 and 2 did not file income-tax return for asst. yr. 1982-83 disclosing capital gains on sale of the property. If that is the ground, then they have to be proceeded against under the relevant provisions of the IT Act. Giving of a different address does not arise or matter in such case. Further, PW1 has stated that capital gains will arise in the assessment year and assessment of the same will come up in the next year. Therefore, the liability to pay tax will arise only in the next year after the transaction. Here, the draft sale deed is dt. 31st July, 1981, and in July or August, the same has been registered. So, the assessment year in this case will be 1981-82 and the assessment of the same will come up only in 1982-83.

According to P.W.1, the accused 1 and 2 did not file income-tax return for the asst. yr. 198283 disclosing income on capital gains. The liability to disclose and pay the income-tax on capital gains would arise only for the asst. yr. 1982-83. The specific evidence of P.Ws. 1 and 2 is that the accused 1 and 2 failed to file return disclosing the income from capital gains on sale of property made in July, 1981. Therefore, if any action is to be taken against the accused 1 and 2, the foundation and the basis for the same should be on the ground that they did not file the return and disclose the income on capital gains for the year 1982-83 when they should have done so. But, the charge is not that. The main charge is that they have given false address. According to P.W. 1 the falsity is only with regard to P2. There is no other falsity. It is also to be pointed out that P.W. 4 has admitted that A1 filed return of income for the asst. yr. 1982-83 on 23rd June, 1986, and that she declared capital gains on the sale of property at No. 35, Anna Pillai Street, Madras-1 at Rs. 74,000 and the return was accompanied by a statement under Ex.P. 22 and but for the issuance of notice under s. 148 which was issued on 22nd March, 1986, the liability to pay the tax on capital gains would have escaped assessment. Apparently, this complaint has been filed only after the same. It has been presented into Court on 13th Aug., 1986. But, when they filled this complaint, the Department did not choose to allege that the 1st accused failed to pay the tax payable on capital gains on the sale of property in July, 1981, and as such she is liable to be proceeded against under s. 276(c). On the other hand, they have chosen to file the complaint as though the accused are guilty for the offences of having given a false address. Neither in the oral evidence adduced by the Department nor by the production of Rules under the IT Act, it has been shown that the Department was prohibited from taking any steps immediately on account of the giving of false address or that it is only the concerned officer, who has jurisdiction can take steps under the provisions of the Act. On the other hand, P.W. 4 who is the ITO, City Circle IV(ii) has stated that he issued under s. 148 of the Act later and made assessment. Therefore, the argument that the ITO, City Circle III (10), Chennai, alone is competent to take action, is belied by the action of P.W. 4. I do not think that there is any provision in the Act which prohibits the authorities concerned to initiate action in such circumstances. Therefore, the very basis of the case against the accused 1 and 2 is quite shaky. If at all the 1st accused can alone be proceeded against for having omitted to submit income-tax return and for having omitted to disclose the income realised by way of capital gains, and thus having failed to pay the tax leviable, the 1st accused is deemed to have committed an offence punishable under the provisions of the IT Act. But, even then, the complaint against the 1st accused is not on that ground. It is also necessary to point out in this case that according to P.W. 4, subsequently a return has been filed, a tax assessment has been made and the tax has been collected. In such circumstance, there does not survive anything on the date when the complaint was filed, for the very case of the complainant is that the ITO having jurisdiction alone can collect tax on capital gains. But, when the case was presented, it was not on this ground and such an evidence has not been produced before the Court. Further, even assuming that it is so, the date when the complaint was laid was only in August, 1986. Already, an income-tax return has been filed by the 1st accused and the assessment has been made and, therefore, the allegation that the ITO having jurisdiction could not take action for collection of tax becomes irrelevant. Finally, the allegation that to avoid income-tax on capital gains, the accused colluded and conspired shall stand negatived. Therefore, I am of the view that the complaint laid is not maintainable and on the basis of the evidence adduced before the Court, it cannot be held that the accused 1 and 2 are guilty under any provisions of the IT Act. On the date of complaint, there was no material to accuse the appellants of having committed any offence by giving false address particulars for the allegation is that with a view to avoid capital gains such a false address was given. But on the date when the complaint was filed, already the return of income for the year 1982-83 has been submitted and assessment has been made by the officer concerned. Further, even according to PW 1, the question of payment of capital gains tax will arise only in the next year. Therefore the liability to pay income-tax would arise only in the asst. yr. 1981-82 and therefore if any false address is given in the year 1981, it cannot be said to have given a cause of action to proceed against the accused under the provisions of the Act. In this view the matter, it has to be held that the offence as against the accused 1 and 2 cannot be held to have been made out. Though I do not agree with the reasons given by the Addl. Chief Metropolitan Magistrate, E.O. II for acquitting the accused 1 and 2 in view of the discussion made in this judgment, it follows that the order of acquittal has to be confirmed though for different reasons.

In the result, these two criminal appeals are dismissed, confirming the order of acquittal of the accused 1 to 3.

[Citation : 247 ITR 497]

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