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TaxTMI 
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TaxTMI 
2026 (3) TMI 503
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....h Court. The Central Bureau of Investigation (the 'CBI') which laid the trap at the instance of the complaint made by PW1, is in appeal. 3. We heard Mr. Kanakamedala Ravindar Kumar, learned Additional Solicitor General and Mr. Mukesh Kumar Moraria, learned counsel for the appellant-CBI and Mr. Vikas Pahwa, learned Senior Counsel for the respondent-accused. 4. PW1, the complainant, was the partner of a firm whose Assessing Officer under the Income Tax Act was the 1st appellant/1st accused; A1. There was a notice issued to the assessee for the assessment year 2008-09 as pending in the office of A1, to finalize which PW1 had approached the 2nd appellant/2nd accused; A2, an Income Tax Inspector, who was the subordinate of A1. It was the complaint of PW1 that in October 2010, he had met both the appellants concerned in connection with the scrutiny of the accounts of the firm in which he was a partner, pursuant to which he was directed to furnish information which also was submitted. On 27.12.2010, PW1 had gone to the Income Tax Office where he met A2 who took him to A1. After discussions, when PW1 was coming out with A2, the latter made a demand of Rs.5 lakhs purportedly on behalf....
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....in two separate tumblers of Sodium Carbonate solution, they turned pink revealing the taint of acceptance of the powdered envelope with the marked notes. 7. The TLO asked for A1 who was said to be in the Commissioner's office. The TLO proceeded to the Commissioner's office and after making a request to the Commissioner escorted A1 back to his room where the trap team had detained A1. The statements were taken from both A1 & A2 and the arrest recorded. After investigation charge was framed of conspiracy under Section 120B and the offence under Section 7 of the Prevention of Corruption Act, 1988 (for brevity, 'the PC Act'). 8. The prosecution examined twenty-three witnesses and produced relevant documents as also transcript of the conversation between PW1 and A2 over telephone and in person, recorded in the DVR. The defense examined three witnesses, two of whom were Officers of the Income Tax Department and DW2, a Junior Judicial Assistant at the record room of the Sessions Court at Patiala House Courts. The Trial Court listed out fifteen circumstances found established and held the charge raised against both the accused to have been proved. Convicting the accused under Section....
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....from the complainant. Having gone through the testimonies, specifically of PW1, PW10, PW18 and PW 22, we are unable to agree with the High Court, reasons for which we would presently elaborate. 11. Before we look at the evidence, we should first notice the compelling argument made by the learned Senior Counsel for the respondent that if the conspiracy element is found to be absent then there is no cause to further examine the records since the charge itself has to fail. Specific reference is made to the charge-sheet produced as Annexure R2 with the counter affidavit dated 27.10.2025 filed by A2. We cannot but notice that there are two charges raised, one under Section 120B of IPC r/w Section 7 of the PC Act and the other under Section 7 of the PC Act; but without the conspiracy angle, independently as against the two accused. For completeness we extract the charges as hereunder: "Firstly, that during the period of October, 2010 to December, 2010, you Arun Kumar Gurjar, Joint Commissioner of Income Tax, Range-29, New Delhi and Baljeet Singh, Inspector, Income Tax, Range-29, New Delhi/IAP-V, CIT (Audit) 1, C.R Building, New Delhi while posted and functioning as such publi....
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.... respondent, for which reliance was placed on the decisions in A. Srinivasulu v. State represented by the Inspector of Police (2023) 13 SCC 705, Dashrath Singh Chauhan v. Central Bureau of Investigation (2019) 17 SCC 509 and Bhagat Ram v. State of Rajasthan (1972) 2 SCC 466. 13. Bhagat Ram3 was a Police Inspector who was alleged to have conspired with one Ram Swarup in an attempt to extort an amount of Rs. 2,000/- from PW1. The Trial Court acquitted both the accused and in an appeal against acquittal, the learned Judges of the High Court found the charge under Section 120B of the IPC to be not proved. However, there was a dispute on whether Bhagat Ram alone can be convicted under Section 161 of the IPC and Section 5(1)(a) of the PC Act. A third judge found the conspiracy angle to be proved, but due to the unanimous opinion restrained himself from imposing any conviction under that provision but still convicted Bhagat Ram under Section 161 IPC and also under Sections 347 and 389 of the IPC. This Court found that the third judge could not have reopened the entire case, since the issue before him was only limited to the offence under Section 161 IPC and Section 5(1)(a) of the PC Ac....
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.... convicted. But here there is another charge of demand and acceptance against both, which as against the two are not inextricably linked by a definite charge of conspiracy. The second charge can be proved against both or against one independently as there is no meeting of minds alleged. 16. It was argued on behalf of the accused that there was no demand proved and even the trial court noticed the inconsistent stand regarding the demand in the complaint and the testimony, especially regarding the demand made in October 2010 and the amounts also did not tally. The pre-trap demand alleged through telephone was not established since the trial Court refused to give any credence to the voice recording for reason of the certification with respect to the electronic data under Section 65B of the Evidence Act not being produced. The voice recording at the time of trap also failed on the same count. The charge of conspiracy being that related to the demand in October the prosecution has to fail and there was also no proof offered of the other demands alleged, is the compelling argument. 17. The complainant was examined as PW1, who clearly spoke of a demand of Rs.5 lakhs having been made....
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..... A1 was the Joint Commissioner of Income Tax who was the Assessing Officer of the firm in which PW1 was a partner, and A2 was an Inspector in the same department is beyond any cavil. There was a suggestion raised by A2 in the cross examination of PW1 that he harbored enmity since he had conducted a scrutiny in a related firm carried on in the very same premises in which was housed the firm of PW1. The related firm had to shell out a huge penalty for the discrepancies revealed on scrutiny. It was also the suggestion of A2 that since A1 was the Assessing Officer of PW1's firm, there was no reason for A2 to demand or accept any bribe from PW1 since he was not the authority entrusted with the assessment of PW1. 20. PW1 readily accepted the scrutiny of the related firm by a team led by A2 and also the penalty imposed on such firm. There is nothing indicated other than this to establish that the trap was laid merely on the enmity especially since, as we would presently see, the acceptance of the bribe and the recovery of the envelope with the marked cash was made from the body of A2. PW1's evidence was categoric insofar as, after issuance of notice to his firm, he had contacted A2 an....
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....ons, PW1 is said to have had with A2 from the office of the CBI before the trap was laid and in the course of the trap. 23. Insofar as the trap, we find PW10 and PW18 to have prevaricated and deposed contrary to their Section 161 statements but still corroborated the version of PW1 and PW22 on many aspects. PW18 travelled with PW1 and PW22 while moving towards the Income Tax Office and PW10 was in another car with the other team members, following the car of the TLO. At the Income Tax Office, they dispersed and PW18 went along with the TLO who was following PW1. PW1 is said to have gone into the room of A1 where he categorically submits that he had handed over the envelope, which A2 accepted and kept inside the pocket of his coat. PW1 then came out of the room followed by A2 and on his signaling TLO, the team rushed to PW1 who pointed out A2. A2 was immediately held by his hands by PW22 and a constable and taken back into the room of A1. 24. PW18, though did not identify A2 in Court, spoke of the person who was apprehended by PW22 having been required to sit in a chair in the room of A1. PW18 also deposed that on the instruction of PW22, he had made a search of the person cau....
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....he trap having been successful as deposed by PW1 and PW22. 26. In this context, we cannot but notice the judgment of this Court in Prakash Chand v. State (Delhi Administration) (1979) 3 SCC 90. The complainant there, PW6, was an architect concerned with the sanction of a building plan, which was continuously being objected to by the Overseer- Section Officer of the Delhi Development Authority, who also demanded a bribe. The trap was laid with two independent witnesses, in the course of which PW6 was handed over a file by the accused which he read at a distance and returned with the bribe amount of Rs.30/- placed inside the file. When the file was handed over to the accused, the accused placed it under the table putting his foot on it. On the prearranged signal, the trap team came inside the room and accosted the accused. The accused denied the demand and also claimed the money to have been kept in the file, without his knowledge. The independent witnesses examined by the prosecution also did not fully support the prosecution case resiling from the statement made during the course of the investigation. These circumstances were in favour of the accused and the compelling argume....
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....s repelled. Relying on Himachal Pradesh Administration v. Shri Om Prakash (1972) 1 SCC 249, it was held that, when an accused person leads a police officer to a particular location where stolen articles and weapons are concealed, which have a connection with the offence alleged, on such recovery, the concealment would be admissible as relevant conduct under Section 8 of the Indian Evidence Act, 1872 irrespective of whether any statement by the accused contemporaneously with or antecedent to such conduct, falls within the purview of Section 27 of the Evidence Act. 28. We notice from the evidence of PW22 that after fully corroborating the trap it was deposed that on being challenged, A2 remained mum. It was also testified that A2 tried to escape and take out the money. It was PW1 who pointed out the upper pocket of the coat of A2 where he had kept the envelope which was taken out by PW18 as fully corroborated by PW22. PW10 also stated that the man apprehended in A1s room turned pale. All these are relevant conduct of A2 pointing to his guilt fortified by the recovery of the marked cash from his body and his hands, coat and sweater, on being washed in the test solution, turni....