R VIJAYALAKSHMI Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS revision is against the order of the learned Principal Sessions Judge, Madras, in Crl. R. C. No. 7 of 1986 reversing the order of the learned Additional Chief Metropolitan Magistrate (E. O. II), Madras, in E. O. C. C. No. 634 of 1985, discharging the petitioners herein under section 245(1), Code of Criminal Procedure, holding that no case is made out against the accused. The learned Principal Sessions Judge in his order has given the reasons for framing the charges against these petitioners for the offences under sections 34, 37, 114, 120B, 177, 193, 196, 199 and 200 of the Indian Penal Code and under sections 276C(1), 277 and 278 of the Income-tax Act, 1961 The facts of the case set out in the complaint of the respondent Income-tax Officer are almost admitted by the petitioners.

(2.) THE petitioners are husband and wife and they are income-tax assessees. On November 17, 1984, the officials of the Income-tax Department made a search in their house and seized a sale agreement dated October 27, 1984, between the second petitioner and one M. Lakshmanan, the owner of 8.37 acres of agricultural lands situated in Thirupporur, for the sale of those lands to the second petitioner for a sum of Rs. 2, 75, 000. Subsequently, the said Lakshmanan had executed a registered sale deed dated December 17, 1984, in respect of the same lands in favour of the first petitioner for a consideration of Rs. 45, 000 only. THE enquiry by the Income-tax Department revealed that though the seller, M. Lakshmanan, had received the sale consideration of Rs. 2, 75, 000 and this amount was deposited by the second petitioner in the names of the family members of the said Lakshmanan in Indian Overseas Bank, West Mambalam branch, in the sale deed only Rs. 45, 000 was shown as sale consideration suppressing the real consideration and undervaluing the sale deed.

(3.) THEREFORE, I shall refer to whether there is prima facie evidence for those offencesSo far as section 277 of the Income-tax Act is concerned, there is verification in exhibit P-9 and it cannot be denied that this verification is in respect of the false statement with regard to the sale consideration. But the learned Additional Chief Metropolitan Magistrate took the view that under section 277(i) of the Income-tax Act, only when this statement was accepted as true for the purpose of assessing the tax, it becomes an offence punishable and in this case, as the Income-tax Department did not act upon this statement, section 277 of the Income-tax Act is not attracted. Even if the view is accepted, it is only under section 277(i) of the Income-tax Act for the purpose of imposing a minimum punishment of six months, that section is attracted whereas under section 277(ii) of the Income-tax there is no such specific clause making it punishable only when the false statement was acted upon by the Income-tax Department. THEREFORE, prima facie, it cannot be said that section 277 of the Income-tax Act is not applicable to this caseThe learned Additional Chief Metropolitan Magistrate took the view that as there was no violation of the provisions of either the Indian Penal Code or the Income-tax Act on the part of the first petitioner, the question of abetment or inducement by the second petitioner will not arise. But when there is prima facie a case for sections 276C and 277 of the Income-tax Act, and the evidence also is to the effect that the second petitioner asked the vendor to execute the sale deed in favour of his wife, the first petitioner, naturally that is prima facie evidence for the offence under section 278, Income-tax Act alsoThen coming to the main offences under sections 193, 196 and 199, Indian Penal Code, referred to in the complaint, as mentioned above in exhibit P-9, which statement is in relation to the Income-tax Department, as the statement is a false statement, it will amount to fabrication of false evidence for the purpose of being used by the first petitioner. Even though exhibit P-9 was produced before the registering authority, the Registrar is expected to forward this form to the Income-tax Department for acting upon that document to find out the source of income. Hence, there is scope to argue that exhibit P-9, the document prescribed under the Income-tax Act, was fabricated for being used to evade the tax payable to the Income-tax Department and as the proceedings before the Income-tax Department are judicial proceedings as mentioned in section 136, Income-tax Act, there is prima facie evidence for framing charges under section 193, Indian Penal Code also. In Mahabir Prasad Saraogi v. State of Bihar 1979 (120) ITR 663 (Patna) fabricating false evidence for the purpose of being used in any stage of a judicial proceeding is complete as soon as the fabrication is complete, even if the judicial proceeding in which the document was intended to be used might not have commenced and the offence is complete as soon as the document is fabricated. Under section 195(1)(b)(i) of the Code of Criminal Procedure, no court should take cognizance of the offences punishable under sections 193 to 196, 199, 200, 205 to 211 and 228, Indian Penal Code, when such an offence is alleged to have been committed in, or in relation to, any proceeding in any court. As Form No. 37G is in relation to the income-tax proceedings, which is a judicial proceeding, certainly the complaint is maintain able by the respondent-Income-tax Officer for the offence under section 193, Indian Penal Code. Section 196, Indian Penal Code, also deals with the use or attempt to use the false and fabricated evidence. As exhibit P-9 is a fabricated document which, according to the Income-tax Department, was intended to be used to evade tax, even the attempt to use this document before the Income-tax Department is a prima facie evidence for the offence under section 196, Indian Penal Code. In section 199, Indian Penal Code, the false statement or making any statement which is false to the knowledge of the first petitioner is also an offence and the Income-tax Officer is entitled to file this complaint under section 195(1)(b)(i), Code of Criminal Procedure, as mentioned above. Section 200, Indian Penal Code, also relates to the corrupt use or attempt to use any declaration knowing the same to be false. Here also, even the attempt is sufficient to attract punishment under the section. It is needless to repeat that as Form No. 37G prepared by the first petitioner relates to the proceedings of the Income-tax Department, naturally, there is prima facie evidence for these sections also.