TaxTMI 
TaxTMI 
2009 (1) TMI 50
X X X X Extracts X X X X
X X X X Extracts X X X X
....n-filing of the Wealth Tax Return for the assessment year 1993-1994. The gist of the allegations are as under:- (ii) The petitioner is the General Secretary of the political party-All India Anna Dravidar Munnetra Kazhagam (AIADMK). Earlier she was a Member of Parliament (Rajya Sabha). She was also the Chief Minister of Tamil Nadu during the period 1991-1996. Prior to her entry into politics, she was a film artist. The petitioner was assessed to wealth-tax since the assessment year 1966-1967 and as such she is aware of her duties and responsibilities under the Act. For the assessment year 1993-1994, relevant to the valuation date 31.03.1993, the petitioner was in possession and ownership of various assets set out in detail in the complaint. For the assessment year 1992-1993 she filed a return of wealth on 23.11.1992 on net wealth of Rs.5,81,94,800/- and her net wealth was assessed at Rs.6,53,98,100/-. The wealth tax return of the petitioner for the wealth tax assessment year 1993-1994 was due to be filed on or before 31.08.1993 as required under Section 14(1) of the Act. However the petitioner did not file her return of wealth within the due date prescribed by the Statute in spite ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... complaint that the petitioner was deliberately bent upon not to file her return of wealth tax at all and may be she has willingly welcomed the ex parte assessment for reasons best known to her. It is further alleged that by deliberately failing to file the return of wealth the petitioner has committed an offence punishable under Section 35 (B) of the Act. (iv) It is further alleged in the complaint that the complaint has been filed in pursuance of the sanction order dated 12.11.1997 passed by the Commissioner of Wealth Tax (Central II), Chennai, under Section 35 (i) of the Act. The said sanction order was filed along with the complaint. (v) Since the complaint had been filed by the respondent who is a public servant sworn statement of the respondent was not recorded and on a perusal of the allegations contained in the complaint and on being prima facie satisfied that a case has been made out under Section 35 (B) of the Act the learned Magistrate took cognizance of the offence on 08.12.1997 and process was ordered to be issued. 3. The above Criminal Original Petition has been filed seeking to quash all further proceedings in E.O.C.C.No.263 of 1997 pending on the file....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Criminal Original Petition the respondent has filed a counter inter alia contending as follows:- 7. The complaint is filed for the offence under Section 35 (B) of the Act for wilful failure to file the return of wealth for the assessment year 1993-1994 and such return has not been filed even up to this date and as such the offence is still continuing in view of the decision of the Apex Court reported in Maya Rani Punj v CIT (1986) 157 ITR 330 (SC) = 1986 (1) SCC 445 The petitioner has suppressed the filing of Crl.O.P.Nos.2759 and 5378 of 1998 before this Court which were dismissed as withdrawn by orders dated 06.03.1998 and 06.02.2001, respectively, and about the time limit fixed by this Court for disposal of the cases. The petitioner has also suppressed the orders passed in Crl.M.P.Nos.5854 of 2001, 3907 of 2002 and 13179 of 2002 whereby the time for disposal of the case was extended periodically. Ever since the filing of the complaint the trial has not progressed because of the conduct of the petitioner. In view of the dismissal of the earlier two quash petitions the present Criminal Original Petition is not maintainable. The present contention raised in the above petitio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le wealth before the deduction of Income Tax liabilities for the years 1987 to 1993-1994 and it means that the petitioner had sufficient wealth warranting her to file the return of wealth. Had the petitioner filed her return of wealth disclosing her true and correct wealth voluntarily, which is a statutory obligation, there would not have been any deficit wealth even in the consequential order. Not disclosing the true and correct net wealth and thereby inviting an ex parte assessment order and claiming Income Tax liabilities form the assessable net wealth, all have the ingredients of tax-evasion. Therefore failure to file the return of wealth is an independent offence under Section 35B of the Act. 12. It is further contended that against the order made in G.I.R. No.701 J/93-94 the Department has preferred a further appeal before the Income Tax Appellate Tribunal. Hence the order passed in GIR No.701 J/93-94 has no bearing on the offence alleged in the complaint and serious prejudice would be caused to the complainant if the impugned order is pressed into service without recording evidence as the offence alleged in the complaint is independent of the impugned order which has no be....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... containing merely the recitals without material evidence or materials has to be termed in law as an inchoate complaint which has no legal sanctity and as such the cognizance taken by the Court below is bad in law. It is further contended that any filing of the documents at the later stage cannot cure the initial defect. It is also contended that the wordings of Section 190 (1) (a) and Section 204 of Code of Criminal Procedure, 1973, illustrate that not only the material facts but also the material particulars have to be necessarily included in the complaint. Therefore the learned senior counsel for the petitioner can only canvass the aforesaid ground taken in the quash petition but not the following other grounds sought to be raised:- (i)When the assessment proceedings were not completed determining the actual wealth, prosecution could not have been launched on 08.12.1997. (ii)Unless the net wealth exceeds Rs.15,00,000/-, there is no necessity for the petitioner to file tax returns. Otherwise, she is bound to file tax returns. (iii)When there is no final determination of her wealth, the question of liability does not arise. (iv)Unless the tax liability is determined, the quest....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsequently, connected Crl.M.Ps. are also dismissed. Interim stay granted in all these cases shall stand vacated. 3. It is open to the petitioner to raise whatever grounds which are open to her under law before the trial court. As the matters relate to the years 1996 to 1998, the concerned trial Judge, E.O.I, Chennai shall dispose of the cases within a period of eight months from the date of the receipt of this order without fail" 21. A reading of the aforesaid order makes it clear that no permission / liberty has been given to the petitioner to file a similar quash petition on the same cause of action but liberty has been given to the petitioner to raise whatever grounds which are open to her under the law before the trial court. In the light of the said order it is not open to the petitioner to raise the very same grounds in the above Criminal Original Petition once-again. 22. In this context it will be useful to refer to a decision of the Apex Court reported in Sarguja Transport Service v. State Transport Appellate Tribunal (1987) 1 SCC 5. In this decision in paragraph 9 it has been observed as follows:- "9. The point for consideration is whether a petitioner after withdrawin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... order dated 30.07.2007 passed on the copy application filed by the petitioner in C.A.No.3100 of 2007 dated 23.07.2007. Therefore in the light of the aforesaid facts the present ground taken in the above quash petition could not have been taken in the earlier two quash petitions and therefore the above quash petition should be deemed to have been filed on a fresh cause of action which was not available to the petitioner earlier and hence the preliminary objection raised by the respondent cannot be countenanced. 25. Learned senior counsel for the petitioner while elaborating the contentions raised in the quash petition made the following submissions:- (i)Since the complainant being a public servant there is no need to record his sworn statement but at least the learned Magistrate must have perused the relevant documents mentioned in the complaint. (ii)Without calling for the records, the learned Magistrate ought not to have taken the complaint on his file and issued the summons, which shows his non application of mind. (iii)The learned Magistrate ought to have called for and examined the contents of the documents before taking cognizance of offence and issuing of summons. (iv)H....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r otherwise to secure the ends of justice. One of such guidelines is where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. Under Article 227 the power of superintendence by the High Court is not only of administrative nature but is also of judicial nature. This article confers vast powers on the High Court to prevent the abuse of the process of law by the inferior courts and to see that the stream of administration of justice remains clean and pure. .... 26. Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. It is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....w and order in the society are the prime objects of criminal justice but it would not be the means to wreak personal vengeance. Considered from any angle we find that the respondent had abused the process and laid complaint against all the appellants without any prima facie case to harass them for vendetta." (d) S.W. Palanitkar v. State of Bihar [2002] 1 SCC 241. In this decision in paragraphs 23, 25 and 27 it is observed as under (page 250):- "23. Many a times, complaints are filed under Section 200 of the Code of Criminal Procedure, 1973, by the parties with an oblique motive or for collateral purposes to harass, to wreck vengeance, to pressurize the accused to bring them to their own terms or to enforce the obligations arising out of breach of contract touching commercial transactions instead of approaching civil courts with a view to realize money at the earliest. It is also to be kept in mind that when parties commit a wrongful act constituting a criminal offence satisfying necessary ingredients of an offence, they cannot be allowed to walk away with an impression that no action could be taken against them on the criminal side. A wrongful or illegal act such as criminal brea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e to really serve the purpose and object for which they are conferred." 27. Countering the aforesaid submissions the learned Special Public Prosecutor submitted that if the perusal of the allegations contained in the complaint reveals prima facie the commission of any offence the Court can take cognizance of the same. The material point to be considered at this stage is as to whether the Court while taking cognizance has applied its mind to the allegations in the complaint or not. Since the complaint in this case has admittedly been filed by a Public servant, Sections 192 and 202 of the Code of Criminal Procedure, 1973, have no role to play. Section 192 of the Code of Criminal Procedure, 1973, cannot be made applicable to the complaint in this case which is filed by a Public servant as the said provision is applicable only to a complaint filed by a private person. The examination of the complainant and the perusal of the documents are not necessary in the case filed by a public servant for taking cognizance of the offence and therefore the learned Special Public Prosecutor submitted that the contentions put forth by the learned senior counsel for the petitioner are liable to be re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and does not suffer from any infirmity." (ii) Bhimappa Basappa Bhu Sannavar v. L.S. Samagouda 1970 (1) SCC 665. In this decision in paragraph 11 it has been observed as follows (page 668):- "The word 'complaint' has a wide meaning since it includes even an oral allegation. It may, therefore, be assumed that no form is prescribed which the complaint must take. It may only be said that there must be an allegation which prima facie discloses the commission of an offence with the necessary facts for the Magistrate to take action. Section 190(1)(a) makes it necessary that the alleged facts must disclose the commission of an offence." 29. I have carefully considered the above submissions made by the learned counsel on either side, perused the allegations contained in the complaint and the order of the learned Additional Chief Metropolitan Magistrate while taking cognizance of the case. 30. The contentions put forth by the learned senior counsel for the petitioner that in the absence of the documents mentioned in the list of documents appended to the complaint the cognizance taken by the learned Magistrate is bad is concerned this Court is of the considered view that it is not mandato....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on the side of the complainant at that stage does not arise and hence the above said observation made by the Apex Court is not applicable to the facts of this case. Similarly the law laid down in Punjab National Bank's case [1993] Supp 1 SCC 499 and S.W. Palanitkar's case [2002] 1 SCC 241 has no relevance to the facts of this case as the facts of those cases are totally different from the facts of the case on hand. In this case the examination of the witnesses and the production of documentary evidence is yet to commence and even before that the above quash petition has been filed. For taking cognizance the examination of the complainant who is a public servant is not necessary and the production of any documents in support of the allegations contained in the complaint are also not necessary. It is also pertinent to point out that it is not the contention of the petitioner that any of the facts stated in the complaint are false and therefore it is not at all necessary for the complainant to have produced the documents enumerated in the list of documents appended in the complaint. 33. It is pertinent to point out that the well settled legal principle relating to pleadings is that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....agistrate had applied his judicial mind to the allegations contained in the complaint and thereafter has come to the conclusion that such allegations do prima facie reveal the commission of the offence and taken cognizance of the offence no exception can be taken. 36. A perusal of the order passed by the learned Magistrate while taking cognizance of the complaint do reveal that the learned Magistrate has applied his judicial mind to the entire allegations contained in the complaint and only thereafter being satisfied that a prima facie case has been made out has taken cognizance of the offence alleged and has ordered issue of process to the petitioner. The learned Magistrate has passed a detailed order even for taking cognizance of the complaint and this Court finds absolutely no error or illegality in the order. Therefore this Court is of the considered view that the non-filing of the documents mentioned in the list of documents appended to the complaint has not vitiated the cognizance taken by the learned Magistrate. 37. For the aforesaid reasons this Court is unable to countenance the contentions put forth by the learned senior counsel for the petitioner. Accordingly the abov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sel on either side. It has to be pointed out that though the contention based on Section 14 (2) of the Act made by the learned senior counsel looks attractive it has no substance. 43. For better appreciation of the aforesaid contentions put forth by the learned senior counsel for the petitioner it will be useful to refer to the provisions contained in Section 14 of the Act, which reads as follows:- "14. Return of Wealth. - (1) Every person, if his net wealth or the net wealth of any other person in respect of which he is assessable under this Act on the valuation date exceeded the maximum amount which is not chargeable to wealth-tax, shall, on or before the due date, furnish a return of his net wealth or the net wealth of such other person as on that valuation date in the prescribed form and verified in the prescribed manner setting forth particulars of such net wealth and such other particulars as may be prescribed. Explanation.- In this sub-section, 'due date' in relation to an assessee under this Act shall be the same date as that applicable to an assessee under the Income-tax Act under the Explanation to sub-section (1) of Section 139 of the Income-tax Act. (2) Notwithstan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se the petitioner was already an assesee and as such she cannot evade liability from filing the return. Hence the above contention of the learned senior counsel for the petitioner cannot be countenanced and the same is rejected. 47. The second contention of the learned senior counsel for the petitioner is that when according to section 2 (m), "net wealth" means the assets in excess of the aggregate value of all the debts owed by the assessee as on the valuation date and when the appellate authority accepted the contention of the assessee and in terms of the appellate order, had the assessing officer done the arithmetic work, the net wealth of the assessee would have become in the negative and the question of prosecuting the assessee would not have arisen. It is further contended that even the amendment to Section 2(m) does not exclude the debt owed. Learned senior counsel for the petitioner further submitted that the rectification of an assessment must be treated on the same basis as an original assessment for the purpose of a claim to deduction in the computation of the assessee's net wealth. He further contended that it is the final quantification of the particular tax liability....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a wealth tax assessment, the assessee makes a claim to deduction on account of income tax, wealth tax and gift tax liabilities subsisting as debts owed by him on the valuation date, it is the final quantification of the particular tax liability which must be taken into account. Where the wealth tax assessment so made is carried in appeal, we have no doubt that the Appellate Authority will take into account the ultimate quantification of the tax liability, even though such ultimate quantification has been reached after the relevant valuation date and during the pendency of the wealth tax appeal." (iii) Kesoram Industries v. CWT [1966] 59 ITR 767(SC); (1966) 2 SCR 688. In this decision the Apex Court has laid down as under (page 785 of 59 ITR):- "For the reasons we have stated earlier, we agree with the conclusion arrived at by the Gujarat High Court. We, therefore, hold that the liability to pay income-tax is a debt within the meaning of section 2 (m) of the Wealth-tax Act and it arises on the valuation date during the accounting year". 48. Countering the aforesaid submissions the learned Special Public Prosecutor submitted that H.H. Sety Parvati Bayi v. CWT (1968) 69 ITR 864 (S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the said order the scope of the amended provision 2 (m) was considered in detail and ultimately it has been held as follows:- "Taking into consideration the entire conspectus of the case we are of the opinion that the income-tax and wealth-tax liabilities cannot be deducted as debts due in relation to taxable assets. We, therefore decide this issue in favour of the Revenue and against the assessee." 51. It is also seen that the Assessing Officer by his order dated 03.07.2006 in G.I.R. No.701 J/93-94 had quantified the wealth tax payable by the assessee as Rs.5,95,617/-. Therefore when the order of the Commissioner of Income Tax (Appeals) IV, dated 16.06.1997 itself has been set-aside by the Tribunal it goes without saying that all the consequential orders / proceedings passed / issued pursuant to the order dated 16.06.1997 namely the order dated 30.06.1997 of the Assessing Officer giving effect to the order dated 16.06.1997, the order dated 11.06.1999 passed in WTA No.17/98-99 and the consequential order dated 03.08.1999 passed in GIR No.701 J/93-94 gets obliterated and ceased to be in existence. Therefore the aforesaid contention of the learned senior counsel for the petitione....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ties constituted under the said Acts clothed with jurisdiction to pass assessment orders and determine the Income Tax / Wealth Tax liability of the assessees and as such the criminal court cannot decide the tax liability of a person. In the light of the said contention of the learned senior counsel for the petitioner himself this Court is of the considered view that the contentions put forth by the petitioner basing reliance on the provisions contained in Section 2 (m) of the Act ought not to have been raised at all before the Criminal Court. 53. The third submission made by the learned senior counsel for the petitioner is that the assessment proceedings in the case of the petitioner have not reached finality; the assessee has filed a tax case in Tax Case SR Nos.35552 to 35556 of 2008 on 22-4-2008 before this Court with a petition to condone the delay and such delay is yet to be condoned. Basing reliance on the pendency of the Tax Case the learned senior counsel submitted that an appeal re-opens everything and when the net wealth is finally quantified it reverts back to the original date and therefore till final quantification is done and all the remedies available to the assessee....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the contention that unless and until the wealth-tax assessment proceedings reach finality the assessee cannot be prosecuted for non-filing of the wealth-tax returns. (ii) CIT v. Bhupen Champak Lal Dalal (2001) 248 ITR 830 (SC). In this decision in paragraphs 3 to 5 the Apex Court has laid down as under (page 832) :- "3. The prosecution in criminal law and proceedings arising under the Act are, undoubtedly, independent proceedings and, therefore, there is no impediment in law for the criminal proceedings to proceed even during the pendency of the proceedings under the Act. However, a wholesome rule will have to be adopted in matters of this nature where courts have taken the view that when the conclusions arrived at by the Appellate Authorities have a relevance and bearing upon the conclusions to be reached in the case necessarily one authority will have to await the outcome of the other authority. 4. This Court in G.L. Didwania v. ITO [1997] 224 ITR 687 (SC);1995 Supp (2) SCC 724 dealt with the similar situation where there is a prosecution under the Act for making a false statement that the assessee had intentionally concealed his income and the Tribunal ultimately se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ency of the proceedings under the Act. The Apex Court has referred to and relied upon the earlier decisions of the Apex Court reported in G.L. Didwania v. ITO [1997] 224 ITR 687(SC);1995 Supp (2) SCC 724, Uttam Chand v. ITO [1982] 133 ITR 909(SC);(1982) 2 SCC 543;1982 SCC (Tax) 150 and P.Jayappan v. S.K.Perumal, First ITO [1984] 149 ITR 696 (SC);1984 Supp. SCC 437;1985 SCC (Tax) 7. (iii) G.L. Didwania v. ITO [1997] 224 ITR 687(SC);1995 Supp (2) SCC 724. In that case, the assessing authority holding that the appellant / assessee had intentionally concealed his income derived from 'Y' company which belonged to him, initiated prosecution against him. The appellant filed an appeal before the Appellate Tribunal and the Tribunal set-aside the assessment holding that there was no material to hold that the 'Y' company belonged to assessee. Basing reliance on the finding of the Appellate Tribunal a petition was filed before the Magistrate to drop the criminal proceedings. An application before the High Court under Section 482 of the Code of Criminal Procedure, 1973, to quash the criminal proceedings was filed and the same was dismissed. Hence the appeal was filed before the Apex Court and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e proceeding under the Act in which there is a chance of success of the assessee is pending. A mere expectation of success in some proceeding in appeal or reference under the Act cannot come in the way of the institution of the criminal proceedings under Section 276C and Section 277 of the Act. In the criminal case all the ingredients of the offence in question have to be established in order to secure the conviction of the accused. The criminal court no doubt has to give due regard to the result of any proceeding under the Act having a bearing on the question in issue and in an appropriate case it may drop the proceedings in the light of an order passed under the Act. It does not, however, mean that the result of a proceeding under the Act would be binding on the criminal court. The criminal court has to judge the case independently on the evidence placed before it. Otherwise there is a danger of a contention being advanced that whenever the assessee or any other person liable under the Act has failed to convince the authorities in the proceedings under the Act that he has not deliberately made any false statement or that he has not fabricated any material evidence, the conviction....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the out come of the Tax Case pending before this Court. 57. Learned senior counsel for the petitioner based reliance on the decision reported in State of Bihar v. Deokaran Nenshi (1972) 2 SCC 890. In this decision in paragraphs 5 and 9 the Apex Court has observed as under (page 892):- "5. A continuing offence is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all. It is one of those offences which arises out of a failure to obey or comply with a rule or its requirement and which involves a penalty, the liability for which continues until the rule or its requirement is obeyed or complied with. On every occasion that such disobediance or non-compliance occurs and reoccurs, there is the offence committed. The distinction between the two kinds of offences is between an act or omission which constitutes an offence once and for all and an act or omission which continues, and therefore, constitutes a fresh offence every time or occasion on which it continues. In the case of a continuing offence, there is thus the ingredient of continuance of the offence which is absent in the case of an offence which takes place when an act or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t in this case, even according to the petitioner, the Tax Case has been filed with a huge delay and the delay itself is yet to be condoned and thereafter the tax case is to be disposed of and it is not certain as to when the Tax Case will be finally disposed of and therefore submitted that when the disposal of the proceedings under the Act namely the Tax Case pending before this Court is not imminent there is no scope for either adjourning or postponing the hearing of the criminal case. He further pointed out that in the very same decision the Apex Court itself has observed that there is no rigid rule which makes it necessary for a criminal court to adjourn or postpone the hearing of a case before it indefinitely or for an unduly long period only because some proceeding which may have some bearing on it is pending elsewhere. But this, however, has no relevance to the question of maintainability of the prosecution. The prosecution in those circumstances cannot be quashed on the ground that it is a premature one. He further submitted that all the witnesses to be examined in this case are all aged and already three witnesses have retired from service and one witness is above 75 years ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lf is yet to be condoned and thereafter the tax case is to be disposed of and it is not certain as to when the Tax Case will be finally disposed of and therefore when the disposal of the proceedings under the Act namely the Tax Case pending before this Court is not imminent there is no scope for either adjourning or postponing the hearing of the criminal case. In the very same decision, the Apex Court itself has observed that "there is no rigid rule which makes it necessary for a criminal court to adjourn or postpone the hearing of a case before it indefinitely or for an unduly long period only because some proceeding which may have some bearing on it is pending elsewhere. But this, however, has no relevance to the question of maintainability of the prosecution. The prosecution in those circumstances cannot be quashed on the ground that it is a premature one." Further it is contended by the learned Special Public Prosecutor that all the witnesses to be examined in this case are all aged and already three witnesses have retired from service and one witness is above 75 years old and another witness is due to retire within few days and therefore this Court is of the considered view th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ention the learned Magistrate has observed that the question whether the notice issued by the Department asking the assessee to file the report is issued under correct provision of law and whether that notice was properly served on the person can be proved only during the trial by letting in oral and documentary evidence by the prosecution. The learned Magistrate has further observed that even the alleged notice has not been marked as an exhibit to enable the Court to look into it and hence has not considered the said contention on merits. According to the learned senior counsel, the learned Magistrate has erred in making such observation and submitted that the said contention ought to have been considered by the learned Magistrate on merits. 65. Countering the said submissions the learned Special Public Prosecutor submitted that when admittedly the notice issued under Section 16 (4) of the Act has not been marked as an exhibit and the proof of service has also not been marked before the Court below and the evidence is yet to be let in it is pre-mature to expect the learned Magistrate to decide the said question. 66. I have carefully considered the aforesaid submissions made by t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bed, or (ii) to produce or cause to be produced such accounts, records or other documents as the Assessing Officer may require. (5) if any person - (a) fails to make the return required under sub-section (1) of section 14 and has not made a return or a revised return under section 15, or (b) fails to comply with all the terms of a notice issued under sub-section (2) or sub-section (4), the Assessing Officer, after taking into account, all relevant material which he has gathered, shall, after giving such person an opportunity of being heard, estimate the net wealth to the best of his judgment and determine the sum payable by the person on the basis of such assessment." 68. 54. Section 17 of the Act reads as under:- "17. Wealth escaping assessment. - (1) If the Assessing Officer has reason to believe that the net wealth chargeable to tax in respect of which any person is assessable under this Act has escaped assessment for any assessment year (whether by reason of under-assessment or assessment at too low a rate or otherwise), he may, subject to the other provisions of this section and section 17A, serve on such person a notice requiring him to furnish within such period, as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....notice issued under sub-section (4) the Assessing Officer after taking into account all relevant material which he has gathered shall after giving such person an opportunity of being heard estimate the net wealth to the best of his judgment and determine the sum payable by the person on the basis of such assessment. Admittedly in this case the assessee / petitioner had not filed the return for the assessment year 1993-1994 within the due date and hence the Assessing Officer had issued the notice under Section 16 (4) of the Act and thereafter by following the procedure prescribed under Section 16 has passed the best judgment assessment. The aforesaid facts are not in dispute. 71. Whereas section 17 deals with cases relating to escaped assessment and it is not the case of the learned senior counsel for the petitioner that the assessment pertaining to the petitioner falls under this category namely escaped assessment. Only in a case where section 17 applies a notice contemplated under Section 17 (1) of the Act can be issued but not otherwise. Simply because in the explanation to Section (1-A) of section 17 of the Act it is provided that where no return of net wealth has been furnishe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n that regard. On the contrary the learned Special Public Prosecutor wanted to make submissions relating to mens rea on the part of the assessee in not filing the returns, but this Court did not permit him to advance any arguments by pointing out that it is the function of the trial court at the conclusion of the trial and on the basis of the evidence to be let in to decide the question of mens rea and its rebuttal by the petitioner. 74. In the decision reported in Prakash Nath Khanna v. C.I.T. (2004) 9 SCC 686; (2004) 266 ITR 1(SC) the Apex Court while considering Section 278E of the Income-Tax Act which is in pari-materia with section 35-O of the Act has held as under (page 12):- "There is a statutory presumption prescribed in Section 278E. The court has to presume the existence of culpable mental state, and absence of such mental state can be pleaded by an accused as a defence in respect of the act charged as an offence in the prosecution. Therefore, the factual aspects highlighted by the appellants were rightly not dealt with by the High Court. This is a matter for trial. It is certainly open to the appellants to plead absence of culpable mental state when the matter is taken....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h each of them and has come to the conclusion that some of the questions raised by the petitioner must be decided, substantiated and adjudicated at the time of trial. 78. It has to be pointed out that the learned Magistrate in his detailed order has considered all these aspects and applied the correct principles of law to the facts of this case and as such I find absolutely no reason to interfere with the order. For the reasons stated above the above Criminal Revision Case fails and the same is dismissed. 79. Before parting with the case this Court wants to refer to the submission made by the learned Special Public Prosecutor regarding the long pendency of the case before the Trial Court. The learned Special Public Prosecutor vehemently contended that the petitioner had sought for more than 180 adjournments and had not allowed the prosecution to commence the examination of the witnesses and submitted that the delay in disposal of the case is only due to various vexatious proceedings initiated by the petitioner. But it has to be pointed out that in the reply filed by the petitioner it has been pointed out that though the petition under Section 245 (2) of the Code of Criminal Proce....