S.S.SIDHU, J. - (1.) LAL Chand, Mohan Lal and Sohan Lal respondents were tried under s. 277 of the IT Act and s. 193 IPC, on a complaint filed against them by the ITO, District II (vii), Amritsar, by the Court of the Chief Judicial Magistrate, Amritsar. That Court, vide its judgment dt. 21st March, 1974, acquitted all the three respondents of the charge under s. 193, IPC, and acquitted Mohan Lal and Sohan Lal also of the charge under s. 277 of the IT Act, but convicted Lal Chand alone under s. 277 ibid and sentenced him to rigorous imprisonment for six months. The complainant filed the present appeal against the acquittal of Mohan Lal and Sohan Lal, respondents. An appeal preferred by Lal Chand against his conviction and sentence was accepted by the Court of Additional Sessions Judge, Amritsar (Shri Balwant Singh Teji), and as a result thereof his conviction and sentence were set aside and he too was acquitted of the charge under s. 277 of the IT Act, vide its judgment dt. 12th April, 1978. The complainant therefore, file Criminal Appeal No. 58 of 1979 against the aforesaid acquittal of Lal Chand. This judgment, therefore, shall dispose of that appeal also.
(2.) THE facts of the case, in brief, are that the complainant filed a complaint against all the three respondents alleging that they along with Smt. Veero and one Daljit Rai filed an application on 30th April, 1956, for the registration of their firm, named and styled as M/s Roda Ram Lal Chand, under s. 26A of the Indian IT Act, 1922, for the asst. yr. 1957-58. The partnership deed dt. 20th April, 1956, purporting to be signed by Daljit Rai also was presented along with that application and, consequently, the registration of the firm was obtained on the basis of the partnership deed and the representations made in the application. During the proceedings for the asst. yr. 1962-63, it came to the notice of the IT Department that Daljit Rai partner was aged about ten years and, as such, he was a minor. Accordingly, Shri Joginder Singh, ITO, P.W. 2, cancelled registration of the firm for the asst. yr. 1957-58 and also its continuation as such upto the asst. yr. 1962-63. Lal Chand, respondent, a partner of the aforesaid firm, had filed the return of income on 17th Aug., 1964, for the asst. yr. 1963-64, in response to a notice dt. 31st Aug., 1963, issued under s. 139(2) of the IT Act by Shri Joginder Singh, P.W. 2, which he had received on 19th Sept., 1963. The return was filed beyond the prescribed period and it showed the income of Rs. 17,447. The declaration made in that return was signed and duly verified by Lal Chand on his own behalf as a partner of the firm and on behalf of other partners. That return was accompanied by the profit and loss account, trading account of various items and personal accounts of partners, besides two applications. The first application was made for a condonation of the delay in filing the return and another application was made for registration of the assessee-firm under the name and style of M/s Roda Ram Lal Chand, and therein the respondents admitted that Daljit Rai was a minor and so he was only admitted to the profits of the firm. During the pendency of assessment proceedings for the year 1963-64, the shop of the respondents was raided by the officers of the Excise and Taxation Department and a Dasti Bahi was recovered from there and the same was produced before Shri V. P.Sood, ITO, P.W. 3. Thereupon, the said Officer, vide his order dt. 13th July, 1966, issued a notice under ss. 143(2) and 142(1) of the IT Act requiring the assessee to appear before the ITO on 27th July, 1966, along with the cash book, ledger, bank pass book and Dasti Bahi relating to the asst. yr. 1963-64. However, the respondents obtained a number of adjournments and their counsel appeared before the ITO on 12th June, 1967. The recovered Dasti Bahi mentioned above contained a number of opening debit entries relating to different sums which when totalled amounted to Rs. 75,221. Those entries actually represented the amounts due from various parties to the assessee-firm regarding the business transactions which had taken place during the accounting year 1962-63, but there was no mention of those transactions or profits earned therefrom in the set of books, including the ledger pertaining to that period, of the firm. The trading account of various items, and the profit and loss account which had been annexed to the return of income did not show the profits earned from these transactions nor did the personal accounts of the partners show the distribution of these profits. Thus, it appeared that the assessee- firm had another set of books for the accounting year 1962-63 in which these business transactions had been recorded and from which opening debit balance as posted in the Dasti Bahi had been brought forward. The respondents failed to produce the genuine set of books despite notice being served on them requiring them to produce those genuine account books and, accordingly, the assessee-firm was given an opportunity to show cause as to why that entire amount be not treated as income of the firm from undisclosed sources. After getting a number of adjournments, the assessee-firm applied to the CIT that the amounts shown in the Dasti Bahi be treated as its concealed income and the same be spread over a number of relevant years. However, that request was turned down. The assessee again submitted another application which was also rejected. Thereafter, the assessee-firm was given a notice to produce evidence on which it might rely in respect of the addition of Rs. 75,221 to its total income. Mohan Lal respondent appeared in response to that notice and obtained adjournments and finally the assessment order was passed by Shri V. P. Sood, P.W. 3, on 26th March, 1968, and the income of the assessee-firm for the accounting year 1962-63 was assessed at Rs. 85,000. In an appeal before the AAC, the estimated income of the firm was reduced from Rs. 85,000 to Rs. 75,221. But for that reduction, that appeal was otherwise dismissed. It was also alleged in the complaint that the respondents had been carrying on business and earning huge profits in the relevant year but deliberately and intentionally, with a view to concealing the profits for evading payment of income-tax, they did not enter the particulars of such business and profits earned therefrom in the account books which they had fabricated for the purpose of producing the same before the IT authorities. It was further alleged that the accused-respondents filed statements of account as annexures to the return of income which they knew to be false and made a false verification and declaration in the return of income and they being guilty of delivering accounts and statements which were false and which they either knew or believed to be false or did not believe to be true and further they caused the circumstances to exist by making false entries in the books which they produced before the ITO intending that such circumstances of false entries might appear in evidence in the proceedings before the ITO and the same might cause the IT authorities, who were to form an opinion upon such false evidence, to entertain an erroneous opinion touching the material points, to the result of such proceedings before such authorities. It was finally alleged that since the accused were guilty of committing offences under the IT Act and also under the IPC, they should be tried and punished in accordance with law. The trial Court, after examining Sarvshri R. D. Mann, Joginder Singh and V. P.Sood, the ITO, P.Ws. 1 to 3, respectively, found that a prima facie case under s. 277 of the IT Act and under s. 193, IPC, was made out against the three respondents. The trial Court, therefore, charged them accordingly. They pleaded not guilty to the charges and claimed to be tried. After that, the prosecution examined Shri Babu Ram Sharma, records Keeper, Officer of the Excise and Taxation Office,Amritsar, P.W. 4, Shri Joginder Singh, Taxation Inspector, Ludhiana, P.W. 5, and Shri S. K. Jain, Deputy Excise and Taxation Commissioner (A), Rohtak, P.W. 6.
(3.) ALL the three accused-respondents, in their statements recorded after the close of the prosecution evidence, admitted having filed the return of income and also that they had got their firm registered with the IT Department, but pleaded ignorance about all other facts. Both MohanLal and SohanLal respondents further added that they did not remember the facts and pleaded their ignorance in respect thereof. However, none of the accused produced any evidence in their defence. The result of the trial of the case has already been indicated above, and so also the result of the appeal filed by Lal Chand against his conviction and sentence. It has been argued by the learned counsel for the appellants that Lal Chand respondent filed ex. P. K. Return of income of the assessee-firm for the asst. yr. 1963-64 before the IT authorities and along with it he also filed statements of accounts, exs. P.L., P.M., P.N. and P.O. signed by Mohan Lal respondent. In ex. P.K., the total income of the assessee-firm of the respondent were searched by the District Excise and Taxation authorities as deposed to by Shri S. K. Jain, P.W. 6, and Inspector Joginder Singh P.W. 5, whereupon the Dasti Bahi, ex. P. Y., was recovered. That Dasti Bahi showed various debit balances amounting to Rs. 75,221 which had been carried forward from the previous years and, therefore, those balances apparently represented the income of the assessee-firm from the transactions entered into by it in the accounting year 1962-63, that is, asst. yr. 1963-64. On the basis of that Dasti Bahi, the IT authorities gave a number of notices to the respondents to explain the amounts of debit balances carried forward from the previous year in the Dasti Bahi but they failed to give any explanation and, therefore, they were ultimately given notice to show cause as to why the amounts of debit balances shown in Dasti Bahi, ex. P.Y., be not treated as their concealed income. The accused could not give any explanation for those amounts and finally, vide their applications exs. P.A.C., P.A.D. and P.A.F., which were signed by Mohan Lal, the respondents requested that the amounts entered in the Dasti Bahi be treated as income of the assessee-firm but the same be spread over a number of relevant years. It has further been argued by the learned counsel for the appellants that since Dasti Bahi, ex. P.Y. was found from the premises of the firm of the respondents and the entries contained in that Dasti Bahi showed that the accused earned profits in the year 1962-63 which they had concealed by not making a mention thereof in their return, ex. P.K., it stands proved that the respondents had filed a return of income for the asst. yr. 1963-64, marked ex. P.K., which contained false declarations and statements with respect to the income of the firm and, thus, the respondents had committed an offence punishable under s. 277 of the IT Act. He has further submitted that the filing of the false return and statements of accounts reveals that the respondents had fabricated false documentary evidence for the purposes of being used before the IT authorities and thereby they had committed an offence within the mischief of s. 193, IPC, also.;