CHAMPALAL GIRDHARILAL Vs. EMPEROR

JUDGEMENT

(1.) 1. The applicant Champalal was prosecuted for an offence under Section 52, Income-tax Act, for making a false statement in his declaration attached to his income-tax return. He was found guilty by a Magistrate exercising powers under Section 30, Criminal P. C., and sentenced to a fine of Rs. 200. Oh appeal the Additional Sessions Judge, Amraoti, held that the applicant had not committed an offence under Section 52 of the Act, but had committed an offence under Section 51 (c) of the Act. He altered the conviction to one of an offence under the latter section and reduced the fine to Rs. 100. The applicant now applies for revision to this Court on the ground that there was no sanction for his prosecution under Section 51, as required by Section 53 of the Act, and that the sanction for prosecution under Section 52 was not valid for a prosecution under Section 51. Notice was issued to the District Magistrate to show cause against the application, and he has replied that he can show no cause. The learned Standing Counsel however who appeared for the Grown in this Court attempted to justify the conviction on the ground that sanction for prosecution for an offence under Section 52 would cover a prosecution under Section 51, as an offence under Section 52 was the more serious offence. The facts are briefly as follows: Champalal is the head of a firm carrying on business at Amraoti, and that firm was called upon to furnish a statement of the income for the year 1929-30 by a notice under Section 22 (2), Income-tax Act. In obedience to that notice Champalal furnished a return dated 29th June 1931 in the prescribed printed form, which is on the record as Ex. P-4, and attached thereto a profit-and-loss statement, which is on the record as Ex. P-5. At the foot of p. 1 of this latter statement the following note appears under the signature of Champalal : (1) Besides this the assesses has one-half share in a registered firm styled as Girdharlal Panchamsao at Nagpur. Share income may be added to find out total income and the assessee be given refund on that amount which will be due. (2) The accounts are incomplete, some accounts are to be settled, accounts want some overhauling. The assessee has submitted the return under protest and ho be permitted to revise return, if thought proper. The assessee nor (or ?) his special agent Mr. Khatri does not take any responsibility for the correctness of the figure.

(2.) THE income-tax authorities held that this return was a false one and that certain items had been deliberately left out, and the Assistant Commissioner Mr. Subhedar accordingly sanctioned the prosecution of Champalal under Section 177, I. P. C., read with Section 52, Income-tax Act, by an order dated 11th March 1932. The Magistrate, Mr. Khan, held that Champalal had been guilty of filing a return in which he had knowingly and intentionally made false entries and therefore had committed an offence under Section 52 of the Act. The Additional Sessions Judge, on the other hand, held that the return (Ex. P-4), although verified, was no return in law owing to the qualifying clauses, which have been quoted above, made in the profit-and-loss statement (Ex. P-5), which was appended to and formed part of the return. He therefore held that, as there was no valid return, and the return was admittedly incomplete, Champalal could not be found guilty of making false statements in the return but that he could be prosecuted under Section 51 (c) of the Act for failing to furnish the return mentioned in Section 22 of the Act in due time, as required by the notice served upon him. In paras. 7, 8 and 9 of his judgment the Additional Sessions Judge has given reasons for holding that the return submitted by Champalal was not a valid return, and the view taken by him is not now seriously disputed on behalf of the Crown and must, I think, be taken as correct. It is true that Champalal did submit a return, but ostensibly and openly that return was not a complete one and was stated to be incomplete, and I would agree with the Additional Sessions Judge in holding that the case in Ganga Sagar v. Emperor can be distinguished and that there was no such verification of the return as would make the return a valid one or constitute commission of an offence under Section 52 of the Act. It may be taken then as established that Champalal was not guilty of an offence under Section 52 of the Act when he submitted the return (Ex. P-4) and the profit-and-loss statement (Ex. P-5).

(3.) IT may further be noted that an offence under Section 52 of the Act is clearly stated to amount to an offence under Section 177, I. P. C., which is a statutory offence, whereas an offence under Section 51 of the Act would, in the ordinary course of events, be no offence at all and is only an offence under the special provisions of the Income-tax Act. It may therefore, I think, be held that an offence under Section 52 is of a different nature to an offence under Section 51 of the Act. Further as admitted by the District Magistrate in his reply to the notice sent to him, Champalal was only called upon to meet an accusation of an offence under Section 52, i. e., for making a false return, and it was taken for granted by all parties that he had not committed an offence under Section 51, i. e., failing to submit a return, and it was considered that he had submitted a valid return, but that there were false entries in that return. It seems clear then that Champalal would be prejudiced by being found guilty on a charge, which he was not called upon to meet and which was a charge of a different nature to the one which was made against him. I am of opinion then that the view taken by the Additional Sessions Judge is incorrect and that the sanction granted by the Assistant Commissioner for the prosecution of Champalal under Section 52 of the Act would not warrant a conviction of Champalal for an offence under Section 51 of the Act, for which there was no sanction. I therefore set aside the conviction and sentence and direct that Champalal be acquitted and set at liberty. The fine, if paid, will be refunded to him.