GANGA SAGAR Vs. EMPEROR

JUDGEMENT

(1.) This is an application to revise the order of the District Magistrate convicting the applicant under Section 177, Indian Penal Code read with Section 52, Income-tax Act, and sentencing him to pay a fine of Rs. 1,000 and the order of the Sessions Judge, in appeal, confirming the said conviction and sentence. On behalf of the Crown a revision has been filed, being revision No. 311 of 1929, praying that the sentence passed on Rai Bahadur Seth Ganga Sagar may be enhanced on the ground that it is inadequate. As the result of the revision filed on behalf of the Crown, the question whether the applicant's conviction is good on facts, has been reopened. We have heard the learned Counsel for the parties at length. The facts which led to the conviction of Mr. Ganga Sagar, briefly are these: Mr. Ganga Sagar is a wealthy trader of Khurja in the district of Bulandshahr. He holds a large amount of shares in different companies including many jute mills in Bengal which pay very handsome dividends. He was to be assessed with income-tax and the Income-tax Officer, Mr. Samiullah, served him with a notice for making a return of the income earned by him in the year 1926-1927, so that on the basis of that income the tax payable by him for the year 1927-1928 might be assessed. The notice was issued on 2 April, 1927, and by it the return was to be filed on 15 May 1927. The applicant, Mr. Ganga Sagar, took time for preparing the return and, ultimately, on 20 July 1927, appeared personally with his books before Mr. Samiullah. It is important to note that 25 July 1927 had not been fixed for the appearance of Mr. Ganga Sagar nor had the date been fixed for him to produce his account-books. His only duty was to file a statement of his income. Mr. Samiullah was requested by Mr. Ganga Sagar to examine his (latter s) account-books and to satisfy himself as to the income of the proposed assessee. Mr. Samiullah ought to have plainly told the applicant that it was no part of his (Mr. Samiullah s) duty to examine the account-books for the benefit of Mr. Ganga Sagar and it was for Mr. Ganga Sagar to find out, from his own books, what his income, on the several heads, was and to make a return. Mr. Samiullah, however, was persuaded to accede to Mr. Ganga Sagar's request and he noted down on two pieces of paper what was the income of Mr. Ganga Sagar, according to his books. After the several items of income had been added up, Mr. Ganga Sagar entered those figures in the form provided for making a return by an assessee, and he signed it. This return is Ex. P and the note made by Mr. Samiullah is Ex. O. Mr. Samiullah, after the return had been made, recollected that he had some information conveyed to him by the Income-tax Officer of "companies district" that Mr. Ganga Sagar had received a dividend of Rs. 6,000 on account of his shares in Sura Jute Mills, Ltd., that Mr. Samiullah asked Mr. Ganga Sagar how it was that this dividend did not find place in his books. Mr. Ganga Sagar replied, according to Mr. Samiullah, that the date of payment as recorded in the letter of the Income-tax Officer of companies districts, (Ex. N), was merely the date of the declaration of the dividend. The suggestion conveyed by this reply was that the actual dividend had not yet been received by Mr. Ganga Sagar. This set Mr. Samiullah a thinking and he made certain further enquiries as to Mr. Ganga Sagar's income from dividends. The enquiries took the shape of a letter addressed to the Calcutta Income-tax Office. Mr. Samiullah also got certain information from the companies intimating what dividends had been paid to Mr. Ganga Sagar.

(2.) The letter Ex. V. and the enclosures Ex. VI to Ex. V.5 show that Mr. Ganga Sagar had received dividends to the amount of about Rs. 70,000 over and above the dividends that had been declared in the return made on 25 July 1927. Before receiving Ex. V. Mr. Samiullah had already issued notice to Mr. Ganga Sagar to produce his account books for the Sambat year 1981 to 1982. I may mention here that the Hindu year for which Mr. Ganga Sagar was expected to make a return was 1982 to 1983, Dewali to Dewali, corresponding to 17 October 1925 to 5th October 1926. On receipt of Ex. V. and its enclosures, he issued another notice, on 19 October 1927, calling on Mr. Ganga Sagar to make a return of his income for the previous year, on the ground that a portion of the income of that year had "escaped" assessment. Evidently the Income-tax Officer thought that Mr. Ganga Sagar had a much larger income than for which he had made a return and that he had not fully disclosed his income either for the year 1982 to 1983 or for the previous year. Mr. Ganga Sagar admits in his statement before the Court that he received the notice by the e October, 1927. Then he consulted some friends and, as the result of what he was told, he sent a letter from Calcutta to the Income-tax Officer (Mr. Samiullah) at Bulandshahr stating that he had made a mistake in the figures supplied by him on 25 July 1927. This letter is Ex. W and was received in the office of the Income-tax Officer on 7 November 1927. Attached to this letter was a statement of the income in Hindi. This has been marked as Ex. W-l. Along with this letter and the enclosure, Mr. Ganga Sagar sent one of the printed forms in Hindi, in which an assessee is required to make a statement of his income. He said on the letter Ex. W in Hindi (while the letter itself is in English) that he did not know how to fill up the form. The suggestion was that the Income-tax Officer might enter the figures contained in Ex. W-1 into the blank form W. 2 and substitute the fresh return in place of the return made on 25 July 1927. The letter Ex. W runs as follows: I find that during your inspection of my bahikhata on 25 July 1927, you omitted to look into certain entries. As you yourself had looked into it I believe that you should have examined the whole of it. Just then in your presence in a hurry I prepared the statement and gave it over to you. Since then I had been busy in other works. Now on Dewali when I went into the accounts to carry over into the bahikhata. I found that mistakes had crept in the examination of accounts. The statement that I prepared in a hurry in your presence and gave to you was not quite accurate. I herewith send another correct statement. The former is not correct. This is correct according to accounts. Please cancel the former statement and put this revised one on file.

(3.) It is common ground that Ex. W-1 submitted with this letter Ex. W, contains, substantially, a correct statement of the applicant's income.