Income-Tax Officer (Union Of vs Nagendranath Khuntia
2023 Latest Caselaw 4289 Ori

     IN THE HIGH COURT OF ORISSA AT CUTTACK

                       CRA NO.32 of 1996

   (In the matter of application under Sections 378/382 of
   the Criminal Procedure Code, 1973.).

   Income-Tax Officer (Union of           ....      Appellant
   India), Jeypore
                       -versus-

   Nagendranath Khuntia                   ....    Respondent


   For Appellant           : Mr. S.S. Mohapatra, Advocate


   For Respondent          : Mr. J.M. Pattnaik, Advocate

         CORAM:
                     JUSTICE G. SATAPATHY


                     DATE OF HEARING :19.04.2023
                     DATE OF JUDGMENT:25.04.2023


G. Satapathy, J.

1. This is an appeal against acquittal of the

respondent-accused by an order of learned Additional

Chief Judicial Magistrate (Special), Cuttack dated

28.04.1994 passed in 2(c).C.C. No.116 of 1992 (Trial

No.119 of 1992).

2. Prosecution case in brief is on verification of

the return filed by the respondent-accused, who was

the Development Officer, LIC, Koraput, during the

assessment year 1990-91, the Income Tax Officer

(ITO) doubted the gross income of the accused and,

accordingly, issued notice to the respondent-accused,

who appeared and furnished his details of account

with xerox copy of savings bank passbook showing

deposit of money. While computing income for the

year under the reference, the Assessing Officer (ITO)

noticed that respondent-accused had shown

Rs.1,00,000/- (Rupees One Lakh) as his receipt for

additional conveyance allowance, but he claimed

Rs.70,013/- (Rupees Seventy Thousand and thirteen)

towards his expenses U/S.10(14) of the Income Tax

Act (in short the IT Act) and added the balance

amount of Rs.29,987/- (Rupees Twenty-nine

Thousand and Nine Hundred Eighty-seven) to his

total income, but the respondent-accused had

omitted to mention the receipt of advance against

incentive bonus of Rs.24,491/- (Rupees Twenty-four

Thousand and Four Hundred Ninety-one) for the

financial year 1988-89. It is also claimed by the ITO

that although accused had received conveyance

allowance of Rs.80,000/- (Rupees Eighty Thousand),

but he had improperly shown it as Rs.1,00,000/-

(Rupees One Lakh) to evade tax liability by getting

benefit U/S.10(14) of the Act. The respondent-

accused had also explained about receipt of

Rs.20,418/- (Rupees Twenty Thousand and Four

Hundred Eighteen) deposited in his SB account as an

advance from LIC, but the Branch Manager, LIC,

Koraput, on being asked, answered the details of

payment made by the respondent-accused including

this amount of Rs.20,418/- (Rupees Twenty

Thousand and Four Hundred Eighteen) in March,

1990 as incentive bonus. It is also alleged that the

respondent-accused did not furnish the receipt of

incentive bonus of Rs.24,691/- (Rupees Twenty-four

Thousand and Six Hundred Ninety-one) in his return

and, therefore, the assessment order was passed on

31.01.1991 showing the total income of the accused

at Rs.1,16,112/- (Rupees One Lakh Sixteen Thousand

and One Hundred Twelve) and, accordingly, tax was

assessed on such amount, but the respondent-

accused filed an appeal, which was allowed for a relief

to the tune of Rs.30,000/- (Rupees Thirty Thousand)

as against his claim of Rs.70,000/- (Rupees Seventy

Thousand) as an additional conveyance allowance

and, accordingly, a penalty proceeding was initiated

against the respondent-accused. On the above facts,

the complaint was made against the respondent-

accused for filing false return to defraud the Income

Tax Department. Accordingly, the complaint case

came into existence and the respondent-accused was

tried in such complaint, but the learned trial Court

after appreciating evidence, found the accused not

guilty of the offences U/S.276(C)/277 of IT Act and

acquitted the respondent-accused by the impugned

judgment.

3. The defence plea of the respondent-accused

was that he did not tendered any false statement to

the Income Tax Department and he filed the IT return

by getting the contents verified by the Office of the

Branch Manager, LIC, but the ITO hurriedly passed

the assessment order without appreciating the

material furnished by him. Being aggrieved by the

order of acquittal of the respondent-accused, the IT

Officer being authorized, has filed this appeal

challenging the acquittal of the respondent-accused.

4. In the course of hearing of the appeal,

learned counsel appearing for the appellant-Union of

India contends that the learned trial Court has fallen

in error in appreciating the evidence on record and,

thereby, had illegally recorded the finding in the

complaint by acquitting the respondent-accused.

On the other hand, learned counsel

appearing for the respondent-accused has submitted

that the learned trial Court has not in fact committed

any illegality in acquitting the respondent-accused,

rather the findings of the learned trial Court are on

the basis of legal scrutiny of evidence and, therefore,

there is no requirement of interference of the order of

acquittal of the respondent-accused after 30 (thirty)

years.

5. Admittedly, this is an appeal against

acquittal, which was recorded by the learned trial

Court way back in the year 1994 and law is well

settled that in case of acquittal, the presumption of

innocence of accused as provided under law, is

reinforced and unless there appears miscarriage of

justice and compelling reasons, no judgment of

acquittal can be interfered with after near about 29

years, more particularly in a case of this nature,

where the offences with which the respondent-

accused stood charged. In this case, the appellant

was charged for offence U/S.276(C)/277 of the IT

Act, but offence U/S.276(C) of IT Act can be

established by way of evidence that such persons

willfully attempted in any manner whatsoever to

evade any tax, penalty or interest chargeable or

imposable under this Act. Similarly, offence U/S.277

of IT Act can be established by way of evidence that

such persons made a statement in any verification

under this Act or under any rule made there under or

delivered an account of statement, which is false, and

which he either knows or believes it to be false or

does not believe it to be true.

6. While scrutinizing the impugned judgment,

it appears that the learned trial Court has rightly

framed the points of determination and proceeded to

appreciate the evidence on record. On reappraisal of

the evidence by this Court, it is now to be seen

whether the findings of the learned trial Court are

perverse or unsustainable in the eye of law. Now let

us see whether the respondent-accused had

furnished false return with intent to evade payment

of tax. It is alleged against the respondent-accused

that he had omitted to show the receipt of advance

against incentive bonus for an amount of Rs.24,691/-

(Rupees Twenty-four Thousand and Six Hundred

Ninety-one) as well as he had shown inflated figure of

Rs.1,00,000/- (Rupee One Lakh) as against

Rs.30,000/- (Rupees Thirty Thousand) received

towards additional conveyance allowance to get the

benefit U/S.10(14) of IT Act, but in order to establish

this allegation, the prosecution wholly relied upon the

confidential communication under Ext.2/13 received

from the Branch Manager (BM), LIC, Koraput towards

receipt of additional incentive bonus of Rs.24,691/-

(Rupees Twenty-four Thousand and Six Hundred

Ninety-one), which according to the prosecution

amounts to willful concealment by the respondent-

accused. This Court feels it proper to go back to the

evidence of P.W.3, who is the Asst. Administrative

Officer (AAO) of LIC, Koraput at the relevant time,

who had admitted in the cross examination that

Ext.2/13 was given confidentially without giving copy

thereof to the respondent-accused and there Office

had regretted for erroneous calculation of income of

the respondent and, thereby, sent a letter under

Ext.A to IT Officer, Jeypore Circle on 09.03.1992 and

it is further admitted by P.W.3 that specifically,

Rs.24,691.06/- as alleged had not been mentioned in

Ext.2/4. P.W.3 had further admitted in cross

examination that segregation of amount relatable to

the income and income tax of the respondent-

accused could not be made ready by their

department by the date of filing of return by the

respondent-accused and, thereby, on 07.05.1991,

the respondent-accused was granted with another

certificate for his income after due appraisal and

segregation for the year under reference. The above

evidence of P.W.3 clearly discloses that the

respondent-accused had not either willfully concealed

any amount in his return or had not any

intention/mens rea on his part. On the other hand,

P.W.2, who had passed the assessment order on the

return of the respondent-accused, had admitted in

the cross examination that he received reply under

Ext.2/13 on 30.01.1991 and passed the assessment

order on 31.01.1991, which is just one day after

receipt of the letter from LIC Office, Koraput. It is

also admitted by P.W.2 that the respondent-accused

had not been noticed to have his say in the matter

and the BM, LIC did not proved by showing any

document of his Office that the respondent-accused

had received Rs.1,00,000/- (Rupees One Lakh)

towards his additional conveyance allowance at the

time of his assessment and in the course of hearing

of appeal, the appellate authority was pleased to

deduct Rs.30,000/- (Rupees Thirty Thousand) from

the additional conveyance allowance of the

respondent-accused. It is also a fact that the

respondent-accused was never given an opportunity

to explain as to why complaint should not be filed

against him and there appears from the record that a

penalty proceeding was also pending at the time of

institution of the complaint, which is contrary to law

inasmuch as unless there is any finding in the penalty

proceeding, the department should be slow to file

complaint against the respondent-accused for the self

same cause of action.

7. Besides, Section 271(1)(C) of IT Act refers

to "concealment as deliberate act on the part of

assessee, but a mere omission or negligence would

not constitute a deliberate act of suppressio veri or

suggestio falsi, which means a misrepresentation of

truth by the omission or suppression of certain key

facts and suggestion of an untruth". In the course of

trial, the respondent-accused had stoutly taken two

pleas. One is that even for a moment, the evidence of

prosecution is taken into consideration, yet he cannot

be convicted for the offences with which he stood

charged for want of sanction, which is defective and

illegal. Second is the pendency of penalty proceeding

U/S.271(1) against him is a bar for institution of the

complaint. The learned trial Court after due analysis

of provision and evidence, had concurred with the

above pleas of the respondent-accused, but in the

course of hearing of this appeal, the appellant could

not validly dispute the said findings of the learned

trial Court and, it therefore, appears to this Court

that the appellant has failed to satisfy this Court

either on merit or on the ground of technicalities.

8. In view of the aforesaid discussion, this

Court has no other option left, but to concur with the

findings of the learned trial Court acquitting the

respondent-accused.

        9.          In    the     result,       the    appeal      merits       no

        consideration       and      is     accordingly     dismissed           on

contest, but in the circumstance, there is no order as

to costs.

(G. Satapathy) Judge

Orissa High Court, Cuttack, Dated the 25 th day of April, 2023/Subhasmita