CHICKANNA SILK HOUSE Vs. STATE OF MADRAS

JUDGEMENT

(1.) PETITIONER No. 1 in this case is a partnership firm (SIC) ling in handloom clothes and art silk yarn at Elampallai in Salem (SIC) trict. PETITIONER No. 2 is its managing partner. This business was start-(SIC) by this firm (sic) filed the income-tax return before P.W. 1 for the years (SIC) mencing from November 10, 1961, giving " August to August" as the (SIC) of accounting for them. P.W. 1, during the scrutiny, found in (SIC) dbit P-7, the day book for the year ending August, 1963, an entry (SIC) iting to the year 1965. This kindled his suspicion. He felt that (SIC) ibit P-7 was written in the year 1965. Then he wrote to the (SIC) nmercial Tax Officers and got from them particulars about the various (SIC) ks produced by the petitioners before them. We are now concerned, in (SIC) case with the books for the periods from January 10, 1961, to August 28, (SIC) 2 and August 28, 1962, to August, 1963. Exhibit P-49 is the day book (SIC) exhibit P-50 is the ledger for the first period. Exhibit P-7 is the day (SIC) k and exhibit P-8 is the ledger for the second period. P,W, 1 issued a notice under Section 142(1) of the Income-tax Act, viz, exhibit P-19, callin (SIC) on the petitioners to produce the account books for the year 1963-64. Th (SIC) books were produced on March 15, 1966. On that, he recorded a swor: (SIC) statement, exhibit P-22, from the second petitioner, the managing director (SIC) He asked him as to whether he had got any other books and the answe (SIC) was that he had no other books. Thereupon exhibit P-23 notice was issue (SIC) by him calling upon him tp produce the books signed by the Commercia (SIC) Tax Officers. By exhibit P-27, the petitioners stated that they hav (SIC) produced all the books with them and that they had no other books (SIC) Thereupon a complaint for an offence under Section 276(1)(c) of th (SIC) Income-tax Act and under Section 193 of the Indian Penal Code, for making; (SIC) false statement was filed (exhibit P-32). The petitioners in defence contende (SIC) that they had produced the account books which they had with them and (SIC) that they never made any false statement as stated by the complainant (SIC) The District Magistrate, Salem, found as a fact that the petitioners had wit] (SIC) them some other account books which they had produced before the commer (SIC) cial tax authorities and that they had not produced them before P.W. 1 (SIC) He further held that the statement made by them in exhibit P-22 tha (SIC) they had no other account books with them was false within the ambit o Section 193 of the Indian Penal Code. He convicted the 1st accused am (SIC) the 3rd accused under both the sections. Under Section 276(1)(c) of the (SIC) Income-tax Act, he sentenced the first accused-firm to pay a line o (SIC) Rs. 1,000 and the managing partner, the 3rd accused, to pay a fine o (SIC) Rs. 1,000. Under Section 193, Indian Penal Code, he sentenced the 3rd (SIC) accused to suffer rigorous imprisonment for six months with a fine o (SIC) Rs. 2,000. On appeal, the Sessions Judge, Salem, affirmed the findings (SIC) confirmed the sentences of fine, and reduced the sentence of imprison (SIC) ment on the 3rd accused to one till the rising of the court. The (SIC) correctness of these findings is canvassed in this revision.

(2.) PETITIONERS arc dealing in handloom clothes and art silks in Salem (SIC) District from 1961. They have filed the income-tax return only in the (SIC) year 1966, for all the previous years, i.e., from the year commencing (SIC) from the time they had commenced business, viz., November 10, 1961 (SIC) Their year of accounting for income-tax purposes is from August to (SIC) August. Prior to that, they had produced their accounts before the (SIC) sales tax authorities for purposes of assessment after a determination of (SIC) the turnover in their business. These are admitted facts. During the (SIC) scrutiny of accounts, P.W. 1, the Income-tax Officer, found in exhibit P-7 (SIC) the day book, for the year 1963, an entry relating to the year 1965. He (SIC) opined that this day book, exhibit P-7, was written only in the year 1965 (SIC) Thereupon on March 7, 1966, he issued a notice, exhibit P-18, under sec (SIC) tion 142(1) of the Income-tax Act calling upon the petitioners to produce (SIC) all the account books of their business from the date of the commencement till the date, viz., March 15, 1966. Petitioner No. 2 received this notice, appeared before the officer and produced the day books exhibits P-49, P-7 and P-16 and the corresponding ledgers, exhibits P-50, P-8 and P-17. Thereupon P.W. 1 recorded the statement, exhibit P-2, from him (vide page 53 of volume 3). He, in this statement, stated that the account, books produced by him were the only books maintained by him and available with him. Thereupon P.W. 1 asked him as to whether he had brought with him and produced before him all the day books and ledgers relating to their business from the commencement till the date March 31, 1966. Petitioner No. 2 answered in the affirmative stating that exhibits P-49, P-50, P-7, P-16 and P-18 are the only books which he had. Then P.W. 1 specifically questioned him as to whether he had with him any other chitta and account books for the period from November 10, 1961, to March 31, 1966. Petitioner No. 2 asserted positively that he had no other books. He further stated that he had given all the books. On the same day P.W. 1 issued the notice, exhibit P-23 (see volume 3, page 57) to petitioner No. 2, calling upon him to produce certain books of accounts that were produced before the Commercial Tax Officers, stating therein that in these books the officers have signed in certain pages giving necessary date and details. He gave this notice directing him to produce those books for the two periods in question and also for the subsequent years. By exhibit P-27 (volume 3, page 64), petitioner No. 2 stated that other than the books already produced by him, he had no other books. The prosecution case is that these statements are false statements intentionally made by the petitioner No. 2 and so he is punishable under Section 193 of the Indian Penal Code. The further case is that the petitioners have not produced the account books, which admittedly they had produced before the Commercial Tax Officers in response to the notice of demand by P.W. 1. This is punishable under Section 276(1)(c) of the Income-tax Act.

(3.) THEN P. W. 1 issued a notice under Section 142(1) to produce the books signed by the Commercial Tax Officers. By exhibit P-27, petitioner No. 2 stated that he had produced all the books he had and that he had no other books. Obviously, the statement thus made by him is a false statement made intentionally.