VEERAKISTIAH Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE facts giving rise to this petition are these : A 1 to A 11 in C.C. No. 208 of 1977 on the file of the Munsif Magistrate, Sangareddy, are partners in a firm run in the name and style of M/s Srinivas & Company. A 12 is the accountant of that company. A 1 and A 11 filed their returns of income tax for the asst. yrs. 1965 66 and 1966 67. For the asst. year 1965 66, the returns were filed by A 1 on 14th July, 1966, showing an income of Rs. 14,705.50. That was for the year ending 30th Sept., 1964. During that period there were five items of expenditure in the names of third parties which were not mentioned in the books for that particular year, but these five items of expenditure were found in the entries of the next year's account. The ITO having noted this, called upon the assessee to file revised returns which was done on 17th Nov., 1967, showing a debit of Rs. 34,585 which is the total of the five items of expenditure in the names of third parties for the asst. yr. 1965 66. The Asst. CIT levied penalty which was reduced by the Tribunal to the minimum. Thereafter, a complaint was filed by the ITO, Central Circle, Hyderabad, against A 1 to A 12 for offence punishable under ss. 193, 196 and 120B of the IPC and S. 277 of the IT Act, 1961. He also filed a complaint against A 12 under S. 278 of the IT Act. The petitioners have now moved this Court with a petition under S. 482 of the Cr. PC for quashing the proceedings in C.C. No. 208 of 1977 on the file of the Munsif Magistrate, Sangareddy.

(2.) MR . Eswara Prasad, the learned advocate appearing on behalf of the petitioners, contends that the complaint has been filed for offences punishable under ss. 193, 196 and 120B, of the IPC. So far as the offences under the above said sections of the IPC are concerned, Mr. Eswara Prasad contends that, having regard to the provisions of S. 195 of the Cr. PC, the Court could have taken cognizance only on the complaint in writing of that Court or of some other Court to which that Court was subordinate for an offence punishable under any of the following sections, viz., ss. 193 to 196, and other sections with which we are not concerned in this case. What Mr. Eswara Prasad contends is that, since a part of the complaint is with regard to the commission of offences punishable under ss. 193, 196 and 120B, IPC, having regard to the provisions of S. 195, CrPC the Court could have taken cognizance of the matter only if the complaint was in writing of that Court, i.e., the ITO, before whom five items of expenditure were not included in the asst. year 1965 66, or some other Court to which that Court or to which the ITO was subordinate, i.e., the CIT. Admittedly, the complaint has not been filed by the ITO. On the other hand, the learned advocate for the IT Department points out that having regard to the provisions of S. 136 of the IT Act, the proceedings before an IT authority is a judicial proceeding within the meaning of ss. 193 and 228 and for purposes of S. 196, IPC. Therefore having regard to the provisions of S. 279 of the IT Act, the complaint at the instance of the CIT could be considered to be a proper complaint or a complaint filed by a proper person. I regret I cannot accede to this contention. So far as the offences punishable under ss. 193, 196 and 120B, IPC, are concerned, having regard to the provisions of S. 195, Cr. PC, no Court can take cognizance of a case until a complaint in writing is filed by that ITO or some other authority to which that ITO is subordinate. In other words, a complaint could have been filed either by the ITO, who had enquired into the returns for the asst. yr. 1965 66, or by the CIT himself. A complaint filed by another Officer at the instance of the Commissioner cannot come within the ambit of S. 279 of the said Act, so far as the offences punishable under ss. 193, 196 and 120B, IPC, are concerned. Therefore, to this extent, viz., to the extent of offences under ss. 193, 196 and 120B, IPC, since the complaint has not been filed either by the concerned ITO or by the CIT himself, as envisaged under the provisions of S. 195 CrPC, the proceedings are liable to be quashed and are hereby quashed. However, so far as the offence under S. 277 of the IT Act is concerned, the proceedings before the learned Magistrate would continue, because it is mentioned in the complaint itself that this complaint has been filed at the instance of the CIT, Madras. Therefore, having regard to the provisions of S. 279 of the IT Act, since the offence is alleged to have been committed under ss. 277 and 278 of the IT Act, a complaint at the instance of the CIT by a third person is permissible. Therefore, the complaint in this case as regards offences under ss. 277 and 278 of the IT Act, has been filed by the proper authority and the proceedings to that extent will continue in the lower Court.