False return and fabricated accounts led to reversal of acquittal, conviction upheld, and sentence softened on equitable grounds.

A revised return filed only after departmental verification and confrontation with unexplained discrepancies did not establish a bona fide mistake, and the trial court's acquittal was found perverse. The record showed intentional concealment of cash purchase payments, false account entries, fabricated accounts, and false verification in the return, attracting liability for false evidence, use of false evidence, attempt to cheat, and wilful attempt to evade tax. The acquittal was reversed and conviction sustained on the charged counts. On sentence, the respondent's age, illness, and delay in proceedings justified modification to imprisonment till the rising of the court with fines maintained.

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Issues: (i) Whether the acquittal of the respondent for offences under the Indian Penal Code and the Income-tax Act was sustainable on the evidence; (ii) whether the sentence required interference.

Issue (i): Whether the acquittal of the respondent for offences under the Indian Penal Code and the Income-tax Act was sustainable on the evidence.

Analysis: The evidence showed that the respondent had not truly disclosed cash payments for purchases and had maintained account entries that were inconsistent with the verified transactions. The alleged revised return was filed only after the department had completed enquiries and confronted the respondent with the discrepancies. The explanation of bona fide mistake was rejected as artificial, and the trial court's reasons for acquittal were found to be unreasonable and perverse. On the record, the respondent had intentionally fabricated accounts and furnished a false return, thereby attracting liability for making false evidence, using false evidence, attempt to cheat, and wilful attempt to evade tax, together with false verification and false statements in the return.

Conclusion: The acquittal was set aside and the respondent was held guilty of the offences charged, including the offences under the Income-tax Act.

Issue (ii): Whether the sentence required interference.

Analysis: While the conviction was affirmed, the respondent's age, illness, long pendency of the proceedings, and the circumstances placed before the Court were taken into account for the purpose of sentence. The Court considered that the ends of justice would be met by imposing imprisonment till the rising of the court and substantial fines on the respective counts.

Conclusion: The substantive sentence was reduced to imprisonment till the rising of the court with fines maintained and quantified on each count.

Final Conclusion: The appeal succeeded, the acquittal was reversed, the respondent stood convicted on the charged counts, and the sentence was modified on humanitarian and equitable considerations.

Ratio Decidendi: A revised return filed only after departmental verification and confrontation with unexplained discrepancies does not establish bona fide mistake, and a trial court's acquittal may be reversed where its appreciation of evidence is perverse and the record proves intentional concealment and false verification.

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