ASSISTANT DIRECTOR OF INSPECTION INVESTIGATION Vs. A B SHANTHI
LAWS(SC)-2002-5-42
SUPREME COURT OF INDIA (FROM: MADRAS)
Decided on
May 03,2002
ASSISTANT DIRECTOR OF INSPECTION INVESTIGATION,CHAMUNDI GRANITES PRIVATE LIMITED
Appellant
VERSUS
A.B.SHANTHI,DEPUTY COMMISSIONER OF INCOME TAX,BANGALORE
Respondents
Referred Judgements :-
R.M. V.PONNUSWAMY NADAR SONS V. UNION OF INDIA [REFERRED]SUKHDEV RATH] V. UNION OF INDIA [REFERRED]
JAORA SUGAR MILLS PRIVATE LIMITED VS. STATE OF MADHYA PRADESH [REFERRED]
S K DUTTA INCOME TAX OFFICER SALARYCURN S I B CIRCLE ASSAM VS. LAWRENCE SINGH INGTY [REFERRED]
P N KRISHNA LAL VS. GOVERNMENT OF KERALA [REFERRED]
UNION OF INDIA VS. A SANYASI RAO [REFERRED]
Cited Judgements :-
KARIBASAPPA VS. MALLIKARJUN [LAWS(KAR)-2022-12-133] [REFERRED TO]COMMISSIONER OF INCOME TAX, SHIMLA VS. AMAR NATH [LAWS(HPH)-2015-10-134] [REFERRED]
COMMISSIONER OF INCOME TAX VS. BHAGWATI PRASAD BAJORIA [LAWS(GAU)-2003-7-5] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. AVET CHEMICALS (P) LTD. [LAWS(P&H)-2006-9-177] [REFERRED TO]
PRINCIPAL COMMISSIONER OF INCOME-TAX VS. M/S. TEHAL SINGH KHARA [LAWS(P&H)-2017-7-68] [REFERRED TO]
BHRAMARABAR DAS VS. STATE OF ORISSA [LAWS(ORI)-2012-3-14] [REFERRED TO]
DHARMENDRA M. JANI VS. UNION OF INDIA [LAWS(BOM)-2021-6-74] [REFERRED TO]
SHEELA SHARMA VS. MAHENDRA PAL [LAWS(DLH)-2016-8-189] [REFERRED]
SRI KALPATHARU FINANCIERS VS. V NATARAJAN [LAWS(MAD)-2012-2-493] [REFERRED TO]
SURINDER MOHAN & OTHERS VS. STATE OF PUNJAB & OTHERS [LAWS(P&H)-2013-4-269] [REFERRED TO]
MOHAMMED IQBAL VS. MOHAMMED ZAHOOR [LAWS(KAR)-2007-7-62] [REFERRED TO]
CHARAN DASS ASHOK KUMAR VS. COMMISSIONER OF INCOME TAX [LAWS(P&H)-2014-3-157] [REFERRED TO]
STATE OF ANDHRA PRADESH VS. K PURSHOTTAN REDDY [LAWS(SC)-2003-3-100] [REFERRED]
GAJANAN VS. APPASAHEB SIDDAMALLAPPA KAVERI [LAWS(KAR)-2022-11-893] [REFERRED TO]
RANGA REDDY DISTRICT PRADESH PANCHAYAT RAJ DEPARTMENT HYDERABAD VS. STATE OF A P [LAWS(APH)-2004-1-74] [REFERRED TO]
PRAKASH MADHUKARRAO DESAI VS. DATTATRAYA SHESHRAO DESAI [LAWS(BOM)-2023-1-294] [REFERRED TO]
SUNIL SITARAM MAHAJAN VS. SURYAKANT PANDURANG BADAVE [LAWS(BOM)-2018-6-73] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. BOMBAY CONDUCTORS AND ELECTRICALS LTD [LAWS(GJH)-2008-2-20] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. V.SIVAKUMAR [LAWS(MAD)-2013-2-235] [REFERRED TO]
BABUL SMOKELESS FUEL INDUSTRIES P LTD VS. STATE OF BIHAR [LAWS(PAT)-2003-1-38] [REFERRED TO]
SHIVA SHANKAR VERMA VS. STATE OF BIHAR [LAWS(PAT)-2011-8-14] [REFERRED TO]
SHIVA SHANKAR VERMA VS. USHA VERMA [LAWS(PAT)-2011-8-84] [REFERRED TO]
ALOK VERMA VS. VINOD KUMAR [LAWS(UTN)-2020-2-18] [REFERRED TO]
SURINDER SINGH VS. STATE OF HIMACHAL PRADESH & ANR. [LAWS(HPH)-2017-11-118] [REFERRED TO]
PAUL P. ABRAHAM VS. ACIT [LAWS(IT)-2015-1-68] [REFERRED TO]
CHARANJIT SINGH ANAND VS. MALLIKARJUN NINGAPPA GORAVI [LAWS(KAR)-2023-4-335] [REFERRED TO]
AASHIRWAD FILMS VS. UNION OF INDIA [LAWS(SC)-2007-5-189] [REFERRED TO]
COMMISSIONER OF INCOME TAX CENTRAL VS. TRIUMPH INTERNATIONAL FINANCE I LIMITED OXFORD CENTRE [LAWS(BOM)-2012-6-10] [REFERRED TO (S.C.) (PARA 11). 5.]
MAHAK SINGH VS. COMMISSIONER OF INCOME TAX [LAWS(ALL)-2013-8-32] [REFERRED TO]
P. BASKAR VS. COMMISSIONER OF INCOME TAX [LAWS(MAD)-2011-4-676] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. JAYASAKTHI BENEFIT FUND LIMITED [LAWS(MAD)-2007-12-145] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. AL- AMEEN EDUCATIONAL TRUST [LAWS(KER)-2018-3-88] [REFERRED TO]
DILIP CHAWLA VS. RAVINDER KUMAR & ANR. [LAWS(DLH)-2017-8-41] [REFERRED TO]
K R PALANISAMY VS. UNION OF INDIA [LAWS(MAD)-2008-8-159] [REFERRED TO]
UNION OF INDIA VS. N.S.RATHNAM [LAWS(SC)-2015-7-71] [REFERRED TO]
VASAN HEALTHCARE P . LTD . VS. ADDITIONAL COMMISSIONER OF INCOME TAX CENTRAL RANGE-2 [LAWS(MAD)-2019-2-116] [REFERRED TO]
CIT VS. M/S CHANDRA CEMENT LTD [LAWS(RAJ)-2016-8-170] [REFERRED TO]
BHUPENDRA KUMAR BHAUMIK VS. UNION OF INDIA [LAWS(DLH)-2002-10-94] [REFERRED]
M V RAJENDRAN VS. INCOME TAX OFFICER [LAWS(KER)-2002-12-58] [REFERRED TO]
DHANJI R ZALTE VS. ASSISTANT COMMISSIONER OF INCOME-TAX [LAWS(BOM)-2003-4-34] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. BALAJI TRADERS [LAWS(MAD)-2008-12-377] [REFERRED TO]
TUBE INVESTMENTS OF INDIA LIMITED VS. ASSISTANT COMMISSIONER OF INCOME TAX [LAWS(MAD)-2009-9-369] [REFERRED TO]
B. GOVINDRAJ HEGDE VS. STATE OF KARNATAKA AND OTHERS [LAWS(KAR)-2016-7-54] [REFERRED TO]
C.K. ANTONY VS. MATHAI M. PAIKEDAY [LAWS(KER)-2014-6-140] [REFERRED TO]
COMMISSIONER OF INCOME-TAX VS. RASHI INJECTION MOULDERS [LAWS(MAD)-2014-8-239] [REFERRED TO]
RAKESH KAMBLI VS. AJIT TARI [LAWS(BOM)-2020-9-225] [REFERRED TO]
PRAKASH MADHUKARRAO DESAI VS. DATTATRAYA SHESHRAO DESAI [LAWS(BOM)-2023-8-384] [REFERRED TO]
JUDGEMENT
K. G. Balakrishnan, J. -
(1.)In both these appeals, the constitutional validity of Ss. 269-SS and 271-D of the Income-tax Act, 1961 (for short, "the Act"), is challenged. In Criminal Appeal No. 601 of 1992, the learned single Judge of the Madras High Court quashed the prosecution initiated against the respondent by holding that S. 269-SS is violative of Art. 14 of the Constitution and, therefore, the prosecution initiated against the respondent was not legal. The learned single Judge granted certificate under Art. 134-A of the Constitution and the present appeal has been filed by the Department.
(2.)In Civil Appeal No. 4478 of 2000, the appellant had challenged the constitutional validity of Ss. 269-SS and 271-D of the Act before the High Court. The learned single Judge dismissed the writ petition. Thereupon the appellant filed an appeal before the Division Bench. The Division Bench in Writ Appeal No. 5447 of 1999 affirmed the order of the learned single Judge. The judgment of the Division Bench is now challenged before us in this appeal.
(3.)Section 269-SS was inserted in the Income-tax Act by Finance Act, 1984 with effect from 1-4-1984, but the same was made operative from 1-7-1984. The Income-tax Department, in course of searches carried out by them from time to time recovered large amounts of unaccounted cash from certain tax payers and often the tax payers gave explanation for their unaccounted cash to the effect that they had borrowed loans or received deposits made by other persons. Sometimes, it was noticed, that the unaccounted income was also brought into the books of accounts in the form of loans and deposits and later they would obtain confirmatory letters from other persons in support of their explanation. The Department was not able to unearth the source of such unaccounted cash. Therefore, in order to plug the loopholes and to put an end to the practice of giving false and spurious explanation by tax payers, a new provision was inserted in the Income-tax Act debarring persons from taking or accepting from any other person any loan or deposit otherwise than by account payee cheque or account payee bank draft, if the amount of such loan or deposit or the aggregate amount of such loan or deposit is Rs. 10,000/- or more. The amount of Rs. 10,000/- was later revised as Rs. 20,000/- with effect from 1-4-1989.
(2.)In Civil Appeal No. 4478 of 2000, the appellant had challenged the constitutional validity of Ss. 269-SS and 271-D of the Act before the High Court. The learned single Judge dismissed the writ petition. Thereupon the appellant filed an appeal before the Division Bench. The Division Bench in Writ Appeal No. 5447 of 1999 affirmed the order of the learned single Judge. The judgment of the Division Bench is now challenged before us in this appeal.
(3.)Section 269-SS was inserted in the Income-tax Act by Finance Act, 1984 with effect from 1-4-1984, but the same was made operative from 1-7-1984. The Income-tax Department, in course of searches carried out by them from time to time recovered large amounts of unaccounted cash from certain tax payers and often the tax payers gave explanation for their unaccounted cash to the effect that they had borrowed loans or received deposits made by other persons. Sometimes, it was noticed, that the unaccounted income was also brought into the books of accounts in the form of loans and deposits and later they would obtain confirmatory letters from other persons in support of their explanation. The Department was not able to unearth the source of such unaccounted cash. Therefore, in order to plug the loopholes and to put an end to the practice of giving false and spurious explanation by tax payers, a new provision was inserted in the Income-tax Act debarring persons from taking or accepting from any other person any loan or deposit otherwise than by account payee cheque or account payee bank draft, if the amount of such loan or deposit or the aggregate amount of such loan or deposit is Rs. 10,000/- or more. The amount of Rs. 10,000/- was later revised as Rs. 20,000/- with effect from 1-4-1989.
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