Prosecution u/s 276C- Signing/verification of ITR by director is prima-facie evidence

Prosecution u/s 276C- Signing, verification of ITR by director is prima-facie evidence. Charge to be framed even on the basis of strong suspicion

ABCAUS Case Law Citation:
ABCAUS 2885 (2019) (04) TC

Important Case Laws Cited/relied upon by the parties
Union of India vs Prafulla Kumar Samal and another, [(1979) 3 SCC 4]
Niranjan Singh Karam Singh Punjabi vs Jitendra Bhimraj Bijjaya, (1990), 4 SCC 76
Vijayan vs State of Kerala and another, (2010) 2 SCC 398
State of Bihar vs Ramesh Singh (1977) 4 SCC 39

The petitioner had challenged the order passed by Additional Chief Metropolitan Magistrate (ACMM) whereby charge had been ordered to be framed against him for wilful attempt to evade tax u/s 276C(1) and false statement in verification u/s 277 R/w section 278-B of the Income Tax Act, 1961 (the Act).

The petitioner was director in a company. The Income Tax Department (Revenue) had filed a complaint alleging that the of the said company (accused company) and the petitioner (accused director) had not declared their income for tax willfully and furnished false verification in the returns.

The Magistrate came to the conclusion that there was sufficient material available on record to frame charge against all the accused(s) as they had contravened the provisions of Section 276-C(1), 277 R/w section 278-B of the Act and accordingly charges were ordered to be framed.

Feeling aggrieved, a revision petition was filed by the said director u/s 397 CrPC on the grounds that there was no mention in the complaint that petitioner had been in charge of day to day affairs of the accused company or managing the affairs thereof.

It was contended that there was no allegation as to how petitioner was responsible and as per settled legal position merely for the reason of being a director, vicarious liability cannot be deemed.

It was submitted that no specific role had been attributed to petitioner and the Magistrate passed the order in a mechanical manner and without application of mind. It was prayed that order is liable to be set aside.

The Hon’ble Judge observed that the law on the question of consideration of charge is well settled. If the criminal court, on consideration of the material submitted with the charge sheet finds that a grave suspicion exists about the involvement of the accused in the crime alleged, it is expected to frame the charge and put the accused on trial. At such initial stage of the trial, the truth, veracity and effect of the evidence which the prosecutor proposes to adduce is not required to be meticulously judged, nor any weight is to be attached to the probable defence of the accused.

The Hon’ble Judge opined that in the instant case, in view of specific averments in the complaint and statements of witnesses a clear prima-facie case was made out against the petitioner / accused for having committed the offences u/s 276 C(1), 277 R/w section 278-B of the Income Tax Act.

The Hon’ble Judge opined that it was evident from the record that petitioner being the director of the accused company had signed and verified the returns of income declaring a loss. Therefore, from the record itself, the role of petitioner was prima-facie clear and at this stage no further evidence was required.

The Hon’ble Judge held that on examination of the order of the Magistrate, no illegality or infirmity could be found and therefore no interference was called for. It was also held that the defence of petitioner / accused can be appreciated only at the stage of trial.

Thus, in view of settled legal position that charge is to be framed even on the basis of strong suspicion, the grounds taken by petitioner in the revision were rejected and the revision was accordingly dismissed

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