TaxTMI 
TaxTMI 
2016 (8) TMI 1308
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....sidences of the appellants, in course whereof their statements were recorded on oath under Section 131 of the Act. On a query made by the authorities, it is alleged that they made false statements denying of having any locker either in individual names or jointly in any bank. It later transpired that they did have a safe deposit locker with the Axis Bank (formerly known as UTI Bank) at Aurangabad which they had also operated on 30.10.2010. The search at Aurangabad was conducted by the Income Tax Officer, Nashik and Income Tax Officer, Dhule and the statements of the appellants were also recorded at Aurangabad. 4. Based on the revelation that the appellants, on the date of the search, did have one locker as aforementioned and that their statements to the contrary were false and misleading, a complaint was filed as afore-stated under the above-mentioned sections of the Indian Penal Code by the Deputy Director of Income Tax (Investigation)-I, Bhopal (M.P.) on 30.5.2011 in the court of the Chief Judicial Magistrate, Bhopal, (M.P.) and the same was registered as R.T. No. 5171 of 2011. 5. The Trial Court on 9.6.2011, took note of the offences imputed and issued process against the ....
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....ch. It has been asserted with reference to Sections 246 and 246A of the Act in particular, that the complainant, the Deputy Director of Income Tax (Investigation)-I, Bhopal (M.P.) is not the authority/forum to whom appeal lies from the orders of the I.T.Os. involved and thus was not a Court as contemplated in Section 195(1)(b) or the appellate forum under Section 195(4) of the Code. 9. It has been emphatically maintained on behalf of the appellants that having regard to the place of search, the recording of their statements as well as of the location of the locker, no cause of action for initiation of the criminal proceedings had arisen within the jurisdiction of the court of the Chief Judicial Magistrate, Bhopal in terms of Sections 177 and 178 of the Code and thus the High Court had grossly erred in deciding contrary thereto. It has been argued that the rejection of their plea by the High Court on the ground that the Deputy Director of Income Tax (Investigation)-I, Bhopal (M.P.) was an officer superior in rank to the I.T.Os. conducting the search is patently flawed and unsustainable in law and on facts, having regard to the peremptory perquisites of a valid complaint under Sec....
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...., it would be apt to note the conclusions of the High Court on these two counts. In addition to the admitted factual aspects narrated hereinabove, the High Court upheld the jurisdiction of the Chief Judicial Magistrate, Bhopal by taking note also of the fact that the income tax returns relatable to the undisclosed property i.e. the locker had been filed at Bhopal. The facts, to reiterate, that the appellants were residents of Bhopal and Aurangabad, and that the search operations were conducted simultaneously at both the places were noted as well. 14. Qua the competence of the Deputy Director, Income Tax (Investigations)-I Bhopal, the High Court held the view that he being admittedly an officer superior in rank to the I.T.Os. conducting the search, the institution of the complaint by him was not vitiated by any lack of authority. Reference to Section 136 of the Act, whereunder any proceeding before an income tax authority would be a judicial proceeding and that for that matter, every income tax authority is deemed to be a civil court was recorded as well. The High Court did refer to the Section 195 of the Code to enter a finding that the Deputy Director, Income Tax (Investigation....
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....out to proceed against the appellants under Sections 191,193 and 200 IPC, issued process against them. 18. As the documents appended to the appeal would divulge that the search operations at Aurangabad had been conducted on the strength of the warrant of authorisation dated 26.10.2010 under Section 132 of the Act, issued, signed and sealed by the Director of Income Tax (Inv.), M.P. & C.G.,Bhopal/Deputy Director of Income Tax and the statements of the appellant Nos. 1 and 2 were recorded by Mrs. Bharati Choudhary, I.T.O. and Mr. A.T. Kapase, I.T.O. (Inv.), Nashik on 28.10.2010. The materials on record also disclose that search operations did continue on subsequent dates as well, in course whereof seizures were made. 19. Be that as it may, eventually the office of the Deputy Director of Income Tax (Investigation)-I, Bhopal on 8.2.2011 issued a show cause notice to the appellants under Section 277 of the Act alleging that they had made false statement under Section 132(4) thereof, thereby seeking a reply as to why prosecution would not follow by virtue thereof. It is in this factual premise, that the validity of the complaint filed by the Deputy Director, Income Tax (Investigati....
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....he Senior Subordinate Judge, Mr. Pitam Singh who made the complaint. The impeachment of the validity of the complaint has arisen in this backdrop. 24. As the sequence of events unfold, the appellant filed an appeal against the order of Mr. Pitam Singh to the Additional District Judge Mr, J.N. Kapur who held that the Senior Subordinate Judge Mr. Pitam Singh had no jurisdiction to make complaint. He also held that on merits as well there was no prima facie case. The High Court, however, in revision held that the Senior Subordinate Judge had the jurisdiction and further the materials on record did disclose a prima facie case. Accordingly, the order of the Additional District Judge was set aside and the order of the Senior Subordinate Judge was restored. 25. Three questions fell before this Court for scrutiny. Firstly, whether the Senior Subordinate Judge Mr. Pitam Singh had jurisdiction to entertain the application and make a complaint. Secondly, whether the Additional District Judge had jurisdiction to entertain an appeal preferred against the order of Mr. Pitam Singh and thirdly, whether the High Court had the power to reverse the order of the Additional District Judge in revi....
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....nter the legislative intent, alluded to the relevant provisions of the Punjab Courts Act, 1918 dealing in particular with the classes and hierarchy of Civil Courts. Apart from the Courts of Small Causes, it was noticed that under the said Act following three classes of Civil Courts were provided: (i) The Court of District Judge (ii) The Court of Additional Judge (iii) The Court of the Subordinate Judge 29. Vis-a-vis the provisions for appeal under Section 39 of the Act, it was noted that in the absence of any other enactment for the time being in force, appeals lay to the Court of the District Judge when the value of the suit did not exceed Rs. 5,000/- and in every other case to the High Court. Section 39(3), however, empowered the High Court by notification to direct that appeals lying to the District Court from all or any of the decrees or orders passed in its original jurisdiction by a Subordinate Judge, would be preferred to such other Subordinate Judge as mentioned in such notification. The facts revealed that as a matter of fact such power had been invoked and appeals lying to the District Courts from the decrees or orders passed by a Subordinate Judge in two clas....
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.... terms of the Notification dated 03.01.1923 that four classes of Subordinate Judges had been contemplated based on the pecuniary jurisdiction conferred. 33. In the above factual as well as legal premise it was thus propounded that the Senior Subordinate Judge Pitam Singh had no jurisdiction to lodge the complaint and instead it was the District Judge who was competent to do so, being the Court to which appeals ordinarily lay from the court of the subordinate judge and was lower in rank to the High Court in the hierarchy. It was held in this context, that the Court of the Additional District Judge could not be construed to be a District Judge and that the jurisdiction of the former was limited to the discharge of such functions as were to be entrusted by the District Judge. It was thus concluded that neither the Senior Subordinate Judge Mr. Pitam Singh nor the Additional Judge Mr. J.N. Kapur who construed himself as an Additional District Judge, had the jurisdiction in the matter and in view of the provisions of the Punjab Courts Act, it was the District Judge who was competent to lodge the complaint in terms of Section 195(3) of the Code. Having regard to the gravity of the alle....
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....ection 37 of the Income Tax Act, 1922 and sub-section (4) thereof in particular, it was held that as apparent therefrom, any proceeding before the I.T.O. in which powers under sub-sections (1), (2) and (3) are exercised by him, would be judicial proceeding for the purposes of the three sections of the Indian Penal Code as enumerated in sub-section (4). Consequently, the question as to whether the false statement alleged to have been made by the respondent No. 2 was rendered in a judicial proceeding within the meaning of Section 193 IPC was answered in the affirmative. 38. This Court also dwelt upon the aspect whether "judicial proceeding" as referred to in Section 193 IPC was synonymous with the expression "any proceeding in any court" used in Section 195(1)(b) of the Code. This issue surfaced primarily in view of the two classes of proceedings contemplated in Section 193 IPC attracting two varying punishments. This provision, it was noted, envisaged a punishable offence for giving false evidence in any stage of a judicial proceeding or fabricating false evidence for the purpose of being used in any stage of a 'judicial proceeding' and also for giving or fabricating false eviden....
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....ioner - assessee in terms of Section 142(2-A) of the Act. This was subsequent to a raid conducted in the premises of the assessee in course whereof some documents including its books of accounts had been seized. The assessee questioned this decision of appointment of a special auditor principally on the ground of want of fairness in action as no opportunity of hearing was given to it, prior thereto. The interpretation and application of Section 142(2-A) of the Act in the textual facts thus fell for consideration in this case. It is in this context that this Court ruled that an assessment proceeding under the Act, is in terms of Section 136 thereof, a judicial proceeding and that when a statutory power is exercised by the assessing authority in exercise of judicial function which is detrimental to the assessee, the same is not and cannot be administrative in nature. In the extant facts and circumstances the challenge of the assessee was upheld. 41. As the genesis of the debate is rooted to Section 195 of the Code, a detailed reference thereto is indispensable. For convenience, Section 195 as a whole is extracted hereinbelow: "195. Prosecution for contempt of lawful autho....
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....ppealable decrees or sentences of such former Court, or in the case of a Civil Court from whose decrees no appeal ordinarily lies, to the principal Court having ordinary original civil jurisdiction within whose local jurisdiction such Civil Court in situate: Provided that- (a) where appeals lie to more than one Court, the Appellate Court of inferior jurisdiction shall be the Court to which such Court shall be deemed to be subordinate; (b) where appeals lie to a Civil and also to a Revenue Court, such Court shall be deemed to be subordinate to the Civil or Revenue Court according to the nature of the case or proceeding in connection with which the offence is alleged to have been committed." Section 195(1)(b) of the Code, which is relevant for the instant pursuit, prohibits taking of cognizance by a court vis-a-vis the offences mentioned in the three clauses (i), (ii) and (iii) except on a complaint in writing of the Court when the offence(s) is/are alleged to have been committed in or in relation to any proceeding before it or in respect of a document produced or given in evidence in such a proceeding or by such officer of that court as it may authorise....
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.... Court, amongst others in C. Muniappan and Others vs. State of Tamil Nadu (2010) 9 SCC 567 wherein the following observations in Sachida Nand Singh and Another vs. State of Bihar and Another (1998) 2 SCC 493 were recorded with approval. "7.....Section 190 of the Code empowers 'any Magistrate of the First Class' to take cognizance of 'any offence' upon receiving a complaint, or police report or information or upon his own knowledge. Section 195 restricts such general powers of the Magistrate, and the general right of a person to move the court with a complaint is to that extent curtained. It is a well-recognised canon of interpretation that provision curbing the general jurisdiction of the court must normally receive strict interpretation unless the statute or the context requires otherwise.....". (emphasis supplied). 47. There is thus no escape from the proposition that for a valid complaint under Section 195 of the Code, the mandate thereof has to be essentially abided and as is easily perceivable this is to prevent frivolous, speculative and unscrupulous allegations relating to judicial proceedings in any court, lest the process of law is abus....
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....ubordinate." 51. As would be evident from the above extract, it deals exclusively with the inter se subordination of the authorities mentioned therein so much so that Income Tax Officers have been made subordinate to Assistant Directors or Assistant Commissioners within whose jurisdiction they perform their functions or other income tax authorities under whom they are appointed to work and to any other income tax authority to whom the Assistant Director or the Assistant Commissioner as the case may be or other income tax authority is subordinate. Noticeably this clause does not spell out any territorial barriers but logically warrant some order/notification to activate the functional mechanism in order to address the institutional exigencies. 52. Our attention has not been drawn to any document to this effect. Additionally as well, the decisive and peremptory prescription of Section 195(4) of the Code is not merely the levels of the rank inter se but the recognised appellate jurisdiction ordinarily exercised by the authority or the forum concerned for a complaint to be validly lodged by it, if in a given fact situation, the initiation of prosecution is sought to be occasioned....
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....ontained in Chapter XX dealing with Appeals and Revision. Whereas Section 246 catalogues the orders of an assessing officer other than those of the Deputy Commissioner from which appeal would lie to the Deputy Commissioner (Appeals), Section 246A lists the orders from which appeal would lie to the Commissioner (Appeals). Admittedly, the categories of orders specified under Section 246(1) of the Act do not include one stemming from any proceeding before an assessing officer under Section 132 of the Act pertaining to search or seizure. Noticeably though under Section 116 of the Act, as referred to hereinabove, under clause (d) thereof, Deputy Director of Income Tax, Deputy Commissioner of Income Tax and Deputy Commissioner of Income Tax (Appeals) have been bracketed together, it is only the Deputy Commissioner (Appeals), as is apparent from Section 246(1), who has been conferred with the appellate jurisdiction to entertain appeals, albeit from specified orders passed by an assessing officer as mentioned in that sub-section. The Deputy Director of Income Tax in particular, has not been designated to be the appellate authority or forum from such orders or any other order of the assessi....
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.... contemplated thereby to be competent has to be in furtherance of the restraint and not in casual relaxation thereof. Consequently, therefore the exposition of the provisions of the corresponding substantive law which designs the forums or authorities and confers original and appellant jurisdiction has also to be in aid of the underlying objectives of the restrictions stipulated. Any postulation incompatible with the restrictive connotations would be of mutilative bearing thereon and thus frustrate the purpose thereof, a consequence not approvable in law. To reiterate, Section 195 of the Code clearly carves out an exception to the otherwise conferred jurisdiction on a court under Section 190 to take cognizance of an offence on the basis of the complaints/information from the sources as enumerated therein. 62. Viewed in this context, in our estimate, the notification issued under Section 118 of the Act cannot be conceded an overriding effect over the scheme of the statute designating the appellate forums more particularly in absence of any order, circular, notification of any authority thereunder to that effect. The Deputy Director of Income Tax for that matter, as the framework ....
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....it the courts to do so unless the provision as it stands meaningless or doubtful and that the courts are not entitled to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the statute, was underlined. It was proclaimed that a casus omissus cannot be supplied by the court except in the case of clear necessity and that reason for is found in the four corners of the statute itself but at the same time a casus omissus should not be readily inferred and for that purpose, all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. 64. More recently this Court amongst others in Petroleum and Natural Gas Regulatory Board vs. Indraprastha Gas Limited and Others (2015) 9 SCC 209 had propounded that when the legislative intention is absolutely clear and simple and any omission inter alia either in conferment of power or in the ambit or expanse of any expression used is deliberate and not accidental, filling up of the....
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....puty Director of Income Tax cannot be construed to be one before whom an appeal from any order/decision of any income tax authority, lower in rank would ordinarily lie. 67. The Parliament has unmistakably designated the Deputy Commissioner (Appeals) to be the appellate forum from the orders as enumerated under Section 246(1) of the Act. This however, in our view, as observed hereinabove does not detract from the recognition of this authority to be the appellate forum before whom appeals from the decisions of an assessing officer or of an officer of the same rank thereto would generally and ordinarily lie even in the contingencies not referred to in particular in sub section 1 of Section 246. This is more so, to reiterate, in absence of any provision under the Act envisaging the Deputy Director of Income Tax to be an appellate forum in any eventuality beyond those contemplated in Section 246(1) of the Act. Neither the hierarchy of the income tax authorities as listed in Section 116 of the Act nor in the notification issued under Section 118 thereof, nor their duties, functions, jurisdictions as prescribed by the cognate provisions alluded heretobefore, permit a deduction that in ....
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....Court before which the complaint had been filed and the proceedings resultantly were quashed. 70. A similar fact situation obtained in Bhura Ram (supra) also involving offences under Sections 498A/406/147 IPC. In the attendant facts, it being apparent that no part of the cause of action for the alleged offence had arisen or no part of the offence had been committed within the jurisdiction of the court before which the complaint had been filed, the proceedings were quashed. 71. Both these decisions on territorial jurisdiction, to start with having regard to the facts involved herein are distinguishable and are of no avail to the appellants. As hereinbefore stated, the appellants as assesses, had residences both at Bhopal and Aurangabad and had been submitting their income tax returns at Bhopal. The search operations were conducted simultaneously both at Bhopal and Aurangabad in course whereof allegedly the appellants, in spite of queries made, did not disclose that they in fact did hold a locker located at Aurangabad. They in fact denied to hold any locker, either individually or jointly. The locker, eventually located, though at Aurangabad, has a perceptible co-relation or ne....