TaxTMI 
TaxTMI 
1985 (6) TMI 12
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....e income derived from contract work should have been shown in the return as income from partnership business, which was not done. A dispute arose between the three partners and the matter was referred to arbitrators who gave their award on November 4, 1967, which was made a rule of the court. The petitioner then filed a petition before the Commissioner of Income-tax on October 10, 1969, admitting that the income derived from contract work was a partnership business with others. He was also examined by the Income-tax Officer, Muzaffarpur, on November 6, 1969. Thereafter, the Commissioner, by his order as contained in exhibit-4, sanctioned for the prosecution of the petitioner and in pursuance of that, eight cases were filed for the different assessment years for making a false verification in the return. Four witnesses have been examined by the prosecution and documents have been filed in support of the prosecution case and exhibit-1 is the report of the Income-tax Inspector which was endorsed by the Income-tax Officer, exhibit-2. Exhibit-3 is the statement of the petitioner before the Income-tax Officer. Exhibit-4 is the sanction order; exhibit-5 is the settlement petition filed....
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....AIR 1950 Madhya Bharat 76, in which extra judicial confession was made by the accussed but it was not put to him under section 342 of the Code of Criminal Procedure which is now section 313, and, therefore, it had been held that it could not be used against the accused. The principles are well known and there are numerous decisions on this point. But, the question for consideration is whether the accused has been taken unawares and had absolutely no knowledge about it. Sri Lalit Mohan Prasad, learned counsel for the Income-tax Department, has submitted that the petitioner himself, in his statement before the Income-tax Officer and in his petition before the Commissioner, had admitted that though there was a partnership business, it was not shown in the return and, therefore, the petitioner was fully aware of all the facts and no prejudice can be said to have been caused to him. He has further submitted that three witnesses have been examined by the defence and the petitioner had sufficient opportunity to show to the court that prejudice has actually been caused to him, but this has not been done. I have given my utmost and anxious consideration to the submissions made at the Bar an....
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....itioner knew the implication and became active and started filing petitions before the income-tax authorities. Mr. Bharuka has submitted that the statements made in the petition were done in an innocent manner in order to purchase peace; but it does not seem to be so innocent as it has been presented before me. The award was made on November 4, 1967, and even after that date, for the return for the year 1968-69, the partnership business was not shown in that return. The explanation, by no stretch of imagination, can be said to be reasonable or probable and, therefore, the case of Adikanda Swain v. Emperor, AIR 1947 Pat 251, will have no application to this case. It has also been vehemently argued by Mr. Bharuka that the, sanction order, as contained in annexure-4, is not in accordance with law and the prosecution lodged against the petitioner is fit to be quashed on that ground alone. His contention is that the sanctioning authority, namely, the Commissioner, has not applied his mind and on that ground alone the prosecution is fit to be quashed. Reliance has been placed on the case o Mohd. Iqbal Ahmed v. State of Andhra Pradesh, AIR 1979 SC 677, and on the case of Jagdish Prasad....
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....the petitioner, there is clear admission about the partnership business and, therefore, any court is fully entitled to take cognizance of the same. If the petitioner has himself accepted the position, then he is estopped from challenging the same. On a careful consideration of the submissions, in my opinion, the sanction order, exhibit-4, is valid and cannot be assailed. Lastly, it was contended that the petitioner should be given the benefit of section 360 of the Code of Criminal Procedure, he being a first offender and should not be sent to jail. Mr. Prasad, for the Department, has submitted that though the provisions of section 360 will be applicable to this case, it should not be resorted to in the instant case. He has submitted that in cases relating to economic offences and tax evasion, the court should be strict in giving such benefit to the accused. In support of his contention, reliance has been placed in the cases of Prem Ballab v. The State (Delhi Administration), AIR 1977 SC 56; Pyarali K. Tejani v. Mahadeo Ramchandra Dange, AIR 1974 SC 228, and Joginder Singh v. State of Punjab [1980] Cri LJ 1218 [FB]. In my opinion, the contention raised on behalf of the Department se....