TaxTMI 
TaxTMI 
2018 (7) TMI 1818
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....The crux of the complaint filed by the respondent is that during the assessment year 1985 1986, a return of income was filed on behalf of the 1st Accused Company accompanied interalia by the profit and loss account and balance sheet, signed by the 2nd and 3rd accused persons. In the said return, a loss was declared to a tune of Rs. 10,10,731/-(Rupees ten lakhs ten thousand seven hundred and thirty one only). Thereafter, the revised return was filed showing a loss of Rs. 5,80,330/-(Rupees five lakhs eighty though three hundred and thirty only). The Assessing Officer in the course of his investigation and on examination of the accounts noticed that with a view to evade a tax by reducing the income, the 1st accused company had claimed in the profit and loss account a bogus payment of brokerage to a tune of Rs. 13,95,525/-(Rupees thirteen lakhs ninety five thousand and five hundred and twenty five only) and a bogus payment of sub-agency commission to a tune of Rs. 23,20,000/- (Rupees twenty three lakhs twenty thousand only) and a bogus loss to a tune of Rs. 60,42,644/- (Rupees sixty lakhs fourty two thousand six hundred and fourty four only) from out of the films purchased from M/s.Suj....
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.... appeal was partly allowed. In view of this development, the substratum for filing the very criminal complaint itself goes and even though, this is a subsequent event, the foundation for filing the compliant no longer exists. The petitioner was only the wife of the 2nd accused who was the Managing Director and she was not in-charge and responsible for carrying on the day today affairs of the Company. The signing of profit and loss account and balance sheet by the petitioner does not ipso facto make her an accused person. The Court below has not applied its mind while taking cognizance of the complaint. The cognizance has been taken by merely putting a Rubber Stamp to the effect that taken on file issue summons to the accused . It clearly shows that the Court below has not applied its mind to the contents of the complaint. The complaint apart from the offence under the Income Tax Act also alleges offence under the Indian Penal Code and the respondent is not competent to file a complaint for an offence under the Indian Penal Code. In support of his submission, the learned Senior Counsel appearing for the petitioner placed reliance on the following Judgments. [Thanjai M....
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....rtain issues, does not in any way affect the criminal complaint filed by the respondent. There are sufficient allegations made in the complaint and also spoken by the witness to show that the petitioner had signed the profit and loss account and the balance sheet in her capacity as the Director of the Company since she was incharge and responsible for the running of the day today affairs of the Company and therefore, there is no ground to dismiss the complaint filed by the petitioner. It is a settled law that the Indian Penal Code offence can also form part of the complaint filed by the respondent and there is no bar for the same. The Rubber Stamp cognizance taken by the Court below is a mere irregularity and that by itself will not vitiate the complaint filed against the petitioner. 9. Discussion :- 9.1 The main point that was canvassed by the learned Senior Counsel with regard to issuance of notice under Section 2(35) of the Income Tax Act is concerned, the same is only a requirement if the offence is under Section 276(B) of the Income Tax Act. The person responsible for paying the tax Deducted at Source (TDS), if it is a company under Section 204 (iii) specifically prov....
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....the continuation of the present criminal complaint. If the entire order of the Assessment Officer had been set aside by the Tribunal, the submission made by the learned Senior Counsel that the substratum itself will be erased, will have force. However in the present case, admittedly, the entire order of the Assessment Officer has not been set aside. The Judgements that have been cited by the learned Senior Counsel in this regard only covers cases where the entire order of the Assessment Officer is set aside and those Judgments will have no application in the present case. Therefore, the order passed by the Tribunal will not have any effect in the continuance of the criminal proceedings initiated by the respondent. 9.4 The submissions with regard to the petitioner not being the person in-charge of and responsible for the conduct of business of the company is concerned, there are sufficient averments that have been made in the complaint and spoken to by the witness which makes out a prima facie case against the petitioner. More particularly, since admittedly the petitioner has signed the profit and loss account and balance sheet for the relevant assessment year and whether the petit....
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....ima facie materials against the accused persons. Even strong suspicion is a ground for framing charges and the Court need not be satisfied, Whether ultimately the case will end up in acquittal. 11. Useful reference can be made to the judgment of the Supreme Court in (Amit Kapoor Vs.Ramesh Chander and another) reported in 2012 (9) SCC 460 :- 17. Framing of a charge is an exercise of jurisdiction by the trial court in terms of Section 228 of the Code, unless the accused is discharged under Section 227 of the Code. Under both these provisions, the court is required to consider the record of the case and documents submitted therewith and, after hearing the parties, may either discharge the accused or where it appears to the court and in its opinion there is ground for presuming that the accused has committed an offence, it shall frame the charge. Once the facts and ingredients of the Section exists, then the Court would be right in presuming that there is ground to proceed against the accused and frame the charge accordingly. This presumption is not a presumption of law as such. The satisfaction of the court in relation to the existence of constituents of an offence and the facts le....
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....obligatory for the Judge at that stage of the trial to consider in any detail and weigh in a sensitive balance whether the facts, if proved, would be incompatible with the innocence of the accused or not. The standard of test and judgment which is to be finally applied before recording a finding regarding the guilt or otherwise of the accused is not exactly to be applied at the stage of deciding the matter under Section 227 or Section 228 of the Code. At that stage the Court is not to see whether there is sufficient ground for conviction of the accused or whether the trial is sure to end in his conviction. Strong suspicion against the accused, if the matter remains in the region of suspicion, cannot take the place of proof of his guilt at the conclusion of the trial. But at the initial stage if there is a strong suspicion which leads the Court to think that there is ground for presuming that the accused has committed an offence then it is not open to the Court to say that there is no sufficient ground for proceeding against the accused. The presumption of the guilt of the accused which is to be drawn at the initial stage is not in the sense of the law governing the trial of crimina....
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....ny scope for an element of criminality nor does it satisfy the ingredients of a criminal offence with which the accused is charged. In such cases, the Court may discharge him or quash the proceedings in exercise of its powers under these two provisions. 27.2 The Court should apply the test as to whether the uncontroverted allegations as made from the record of the case and the documents submitted therewith prima facie establish the offence or not. If the allegations are so patently absurd and inherently improbable that no prudent person can ever reach such a conclusion and where the basic ingredients of a criminal offence are not satisfied then the Court may interfere. 27.3 The High Court should not unduly interfere. No meticulous examination of the evidence is needed for considering whether the case would end in conviction or not at the stage of framing of charge or quashing of charge. 27.10 It is neither necessary nor is the court called upon to hold a full- fledged enquiry or to appreciate evidence collected by the investigating agencies to find out whether it is a case of acquittal or conviction. 27.12 In exercise of its jurisdiction under Section 228 and/or under S....