HIRALAL BANKA Vs. P S BOSE

JUDGEMENT

(1.) This revisional application has been filed for quashing the First Information Report (F.I.R.) dated the 27th June, 1989 in RC/9/SCB/89 Calcutta and all proceedings initiated thereunder in the Court of the learned Sub-Divisional Judicial Magistrate (South), Alipore, Calcutta. The said First Information Report is Annexure-E to this revisional application. The F.I.R. was recorded at the Delhi Special Police Establishment, CBI, SCB, Calcutta branch on 27th June, 1989 under sections 120B/420/468/471 I.P.C. and sections 277/278 of the Income Tax Act, 1961 on the basis of information reported in writing by one Sri P. S. Bose, Inspector of Police, CBI, SCB, Calcutta who also took up the investigation of the case as per order of the SP, CBI, SCB, Calcutta. In the formal part of the F.I.R. the name of the complainant has been noted as 'source' and the date and time of occurrence has been recorded as 'during the years 1985 and 1986'. Seven persons including the 4 petitioners herein have been named as accused in the F. I.R.

(2.) The gist of the allegations of the F.I.R. is noted below. Mahesh Kumar @ Mahesh Chand Bhagchank and the 4 petitioners, namely, Hiralal Banka, Sumit Banka, Nisha Agarwala @ Nisha Banks and Sudesh Banks, all of Calcutta, earned huge sums of money through unauthorised sources resulting in accumulation of large sums of unaccounted money which they were required to disclose to the concerned income tax authorities, but they avoided to do so for evading payment of income tax liabilities as has been reliably learnt. It was further disclosed by the source that the above named persons in contact with Omparkash Mittal and Gopal Chowdhury, both of Siliguri and Udayram Agarwala of Gangtok and others, mutually agreed to commit illegal acts and adopt illegal means to account for the unaccounted/undisclosed/ unexplained amounts of money under false and fictitious cover of receipt of gifts from the contact man, said Udayram Agarwala of Gangtok, Sikkim where the provisions of Income Tax Act, 1961 do not apply. In furtherance of the common object of the said agreement Mahesh Kumar @ Mahesh Chand Bhagchank, Hiralal Banka, Nisha Agarwala @ Banka and Sudesh Banka passed on their undisclosed, unexplained accumulated money to their contact man in Sikkim through the middlemen Omprakash Mittal and Gopal Chowdhury and the said contact man of Sikkim, Udayram in turn disclosed a major portion of the amounts so passed over to him to income tax authorities of Sikkim for nominal turnover tax on declaring that he had given a gift of Rs. 7,10,000/- to the aforesaid 5 persons of Calcutta through Bank Drafts purchased from Central Bank of India, Gangtok, Sikkim in favour of the aforesaid 5 persons of Calcutta payable at their branch in Calcutta and the said 5 persons received the said amount in their Bank accounts at Calcutta and thereafter they reflected the same as gifts in their books of accounts and filed income tax returns before competent income tax assessing authority disclosing their unaccounted/undisclosed/unexplained money as receipt of gifts and thus claimed exemption from payment of income tax liabilities and in support of such claim they filed photostat/xerox copies of affidavit obtained by their contact man at Sikkim from the competent authority at Sikkim. The recipients of the so-called gifts thereby succeeded in getting exemption from payment of income tax liabilities on dishonest and fraudulent misrepresentation of facts in their income tax returns. But for such dishonest and fraudulent misrepresentation of facts the income tax authorities would not have passed order accepting the claim of benefits of gifts. It is thus palpably clear that for perpetration of fraud false declarations were made intentionally by the said persons in Calcutta in their income tax returns and false/forged documents were used by them with full knowledge and having reasons to believe that such documents were forged. The aforesaid transaction involved misdeclaration of about Rs. 7,10,000/- of unaccounted/unexplained money and proportionate evasion of income tax liability. The above facts prima facie disclose commission of offences punishable under sections 120B read with sections 420, 468, 471 I.P.C. and sections 277 and 278 of the Income Tax Act, 1961. What is described above in this paragraph is the reflection of the allegations in the F.I.R.

(3.) From a reading of the F.I.R. it is evident that the matter relates to submission of income tax return at Calcutta by the petitioners allegedly supported by false and fabricated statements and materials showing gifts of money received from some other person of Sikkim to whom allegedly the petitioners had earlier passed on their undisclosed, unaccounted accumulated money for evading income tax and obtaining of relief thereby in the matter of assessment of income tax to which they were not legally entitled. It has been argued by the learned Advocate for the petitioners that since the income tax authorities themselves have accepted the returns and have not questioned anything in that connection the police authorities or for that matter the CBI cannot start an investigation in respect of the self-same matter for harassing the petitioners. It is also submitted on behalf of the petitioners that under the Income Tax Act the income tax authorities themselves have enough power and responsibility to take appropriate action if it is felt by them that anything wrong has been done by the petitioners in connection with the submission of their income tax returns but it is on act of gross arbitrariness and wanton illegality on the part of the CBI to embark upon a harassing investigation without any authority of law in respect of the matter of income tax assessment made by the income tax authorities. The two sections of the Income Tax Act which have been mentioned in the F.I.R. as attracted to the facts and circumstances are sections 277 and 278. The said sections of the Income Tax Act are reproduced below :-