TARAKNATH GUPTA Vs. UNION OF INDIA

JUDGEMENT

(1.) The present rule was issued on August 31, 1976, at the instance of the writ petitioner praying, inter alia, for issuance of a writ of certiorari quashing the complaints dated March 11, 1976, being Cases Nos. C. 1509/76/TR-163-76 and C/1550/76/TR-164/76 and the authorisation under Section 279 of the Income-tax Act granted by respondent No. 2, Commissioner of Income-tax, Central Circle-II, Calcutta, dated February 27, 1976, and all proceedings thereunder. It is alleged that the petitioner was served with two summonses purported to be issued under Section 68 of the Code of Criminal Procedure by the Metropolitan Magistrate, 8th Court, Calcutta, under case number as aforesaid directing :the petitioner to attend the court on the date of hearing. It appears from the said complaints that Sri S. R. Dey, Income-tax Officer, Central Circle-XVIII, Calcutta, has prayed for taking cognizance of the offence under Section 277 of the Act against the petitioner. Being aggrieved, the petitioner has come to this writ court on the ground that the Income-tax Officer, Central Circle-XVIII, Calcutta, has no authority and/or jurisdiction to file the complaints for the offence alleged to have been committed in the proceeding under Section 131 of the Act and, as such, the complaints filed by the said Income-tax Officer on the authorisation of the Commissioner of Income-tax are illegal, invalid and without jurisdiction. It is alleged that the Income-tax Officer, in issuing the summons under Section 131 of the Act, exercised the power of a civil court and proceedings before him being judicial proceedings within the meaning of Section 195 of the Code of Criminal Procedure, respondent No. 1 has no jurisdiction and/or authority to initiate proceedings under Section 277 of the Income-tax Act without complying with the statutory provision as laid down in Section 195 of the Criminal Procedure Code. It is further contended that Section 277 of the Act postulates that where a person delivers an account or statement which is false and which he either knows or believes to be false or does not believe to be true, he shall be punishable. Section 277 of the Act does not apply in a case where a person in the proceeding under Section 131 of the Act gives a deposition before the particular Income-tax Officer in pursuance of the summons issued under Section 131 of the Act inasmuch the Income-tax Officer did not record any order to the effect that the petitioner has evaded the lawful tax by making such statement, and no offence can be said to have been committed by the petitioner within the meaning of Section 277 of the Income-tax Act. The petitioner has filed the present writ petition seeking the reliefs as indicated above.

(2.) Learned advocate for the petitioner has argued with force that the act done or caused to be done in lodging the complaints is contrary to and inconsistent with the provision of law and the writ court should interfere in the matter as the proceedings taken by the respondents are not warranted in law. He has drawn the attention of this court to the provisions of the Voluntary Disclosure of Income and Wealth Act, 1976, and in particular to Section 14(1) of the Act as to the disclosure of income in a case of search and seizure. He has drawn the attention of this court to the fact that notwithstanding anything contained in any of the Acts mentioned in Sub-section (1) of Section 8 or the Wealth-tax Act, the amount of income so declared or, as the case may be, the value of the assets representing such income, shall not be taken into account for the purpose of-

(3.) According to him, in view of such disclosure made" by the petitioner, nothing has been committed by the petitioner and the proceeding cannot be initiated under Section 277 of the Act. In support of his argument, he has drawn the attention of this court to the decision in Lalji Haridas v. State of Maharashtra. It was held that Section 37(4) of the Indian Income-tax Act, 1922, made the proceedings before an Income-tax Officer judicial proceedings under Section 193 of the Indian Penal Code and these judicial proceedings must be treated as "proceedings in any court" for the purpose of Section 195(1)(b) of the Code of Criminal Procedure. He has drawn the attention of this court to the next decision in ITO v. Kerala Oil Mills. It will appear from there that an Income-tax Officer before whom a proceeding under the Income-tax Act, 1961, is pending is deemed to be a civil court for the purposes of Section 195 of the Criminal Procedure Code, 1973. A prosecution under sections 193 and 196 of the Indian Penal Code, I860, can never be considered to be a proceeding under the Income-tax Act. Section 127 of the Income-tax Act authorises the Commissioner to transfer any case from one Income-tax Officer to any other Income-tax Officer. It was found that the court before which the offences under sections 193 and 196 were committed should file the complaint as contemplated by Section 195(1)(b)(i) of the Criminal Procedure Code. He has also referred to the decision reported in Veerakistiah v. ITO. It is found that under Section 195 of the Criminal Procedure Code, no court can take cognizance of a case until a complaint in writing is filed either by the court itself or some other court. On the same line, he has referred to a decision in Kalyan Sen v. GTO. It was held by Suhas Chandra Sen J. in that case that in order that a complaint can be lodged under Section 35(1) of the Gift-tax Act, 1958, for failure to file a return under that Act, there should be a prima facie finding that there has been a taxable gift. There has to be a further finding that a return has not been filed in respect of that gift without any reasonable cause. The question whether there has been a taxable gift or not can only be decided in proper assessment proceedings.