Framing of charge in disproportionate assets cases: income tax returns do not by themselves defeat prosecution at the threshold.
At the stage of framing charge in a disproportionate assets prosecution, the court applies the test of grave suspicion rather than proof of ultimate guilt, so alleged assets, expenditure, bank balances and income material may justify proceeding under the Prevention of Corruption Act. Income tax returns and assessments do not by themselves conclusively prove lawful source of funds. On the son's role, witness statements and financial linkage were treated as sufficient to raise a prima facie case of abetment or conspiracy, particularly where he had attained majority for a substantial part of the check period. Protection under the Special Bearer Bonds Act did not bar prosecution for corruption-linked offences, and the charges were left to stand for trial.
Issues: (i) Whether the order framing charge against the public servant for possession of assets disproportionate to known sources of income called for interference in proceedings under Article 226 and Article 227 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 1973. (ii) Whether the material on record disclosed a prima facie case of abetment or conspiracy against the son, and whether income tax returns and protection under the Special Bearer Bonds (Immunities and Exemptions) Act, 1981 defeated the prosecution at the stage of charge.
Issue (i): Whether the order framing charge against the public servant for possession of assets disproportionate to known sources of income called for interference in proceedings under Article 226 and Article 227 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 1973.
Analysis: At the stage of charge, the court is concerned only with whether the material raises grave suspicion and not whether the prosecution will ultimately succeed. The record reflected alleged assets, expenditure, bank balances, and income which were treated by the trial court as sufficient to proceed under Section 13(1)(e) and Section 13(2) of the Prevention of Corruption Act, 1988. Income tax assessments and returns did not conclusively establish the lawful source of the funds for the purposes of a disproportionate assets prosecution.
Conclusion: The charge against the public servant did not warrant interference and was sustained.
Issue (ii): Whether the material on record disclosed a prima facie case of abetment or conspiracy against the son, and whether income tax returns and protection under the Special Bearer Bonds (Immunities and Exemptions) Act, 1981 defeated the prosecution at the stage of charge.
Analysis: The court found that the son had attained majority for a substantial part of the check period and that the prosecution material, including witness statements and alleged financial linkage, was sufficient to create suspicion requiring trial. The protection under Section 3(2) of the Special Bearer Bonds (Immunities and Exemptions) Act, 1981 did not bar prosecution for offences under the Prevention of Corruption Act, 1988 or allied offences. The material was enough to test the allegations of abetment and conspiracy at trial, rather than to terminate the proceedings at the threshold.
Conclusion: A prima facie case against the son was made out and the challenge to charge failed.
Final Conclusion: The petitions were found meritless, and the charges were allowed to stand for trial without interference.
Ratio Decidendi: At the stage of framing charge in a disproportionate assets case, income tax returns and similar documents do not by themselves establish lawful source of income, and prosecution may proceed where the materials create grave suspicion of the offence, abetment, or conspiracy.
TaxTMI 
AI Drafter ✕
TaxTMI 
