Prosecution u/s 276CC-Challenge to satisfaction note u/s 153C rejected. If view taken by trial court is reasonable possible view, it is not to be disturbed
ABCAUS Case Law Citation:
ABCAUS 2716 (2019) (01) AC
Important Case Laws Cited/relied upon:
Pepsi Foods Pvt. Ltd. Vs. Assistant Commissioner of Income Tax
Canyon Financial Services Ltd. Vs. Income Tax Officer
Shyam Babu Vs. State of UP AIR 2012 SC 3311
The accused appellant/assessee was convicted u/s 276CC of Income Tax Act, 1961 (the Act) and sentenced to six months simple imprisonment with fine by the Additional Chief Metropolitan Magistrate (ACMM).
A survey u/s 133A of the Act was conducted at the office of one person which was converted into search operation during which incriminating documents/papers belonging to the accused / appellant were found and seized.
A notice u/s 153C r/w Section 153A of Income Tax Act was issued requiring the accused to file his return of income for the relevant assessment year but no such return was filed.
Later, notice was served upon the accused about the launch of prosecution and penalty u/s 271 (1) (b) of the Act was levied.
The accused also failed to comply with the provisions of notice issued u/s 148 of the Act by not filing his return of income, which led to the filing of complaint by income tax department.
The accused was summoned by the court of ACMM and pre-charge evidence was recorded, during which witnesses were examined on behalf of income tax department which included the complainant, the officer who issued various notices to the accused, member of search team who recorded the statement u/s 132 (4) of the Act of the person searched, officer who recorded the statement of accused u/s 131 (1A) of the Act and the officer who recorded satisfaction note u/s 153 (C) of the Act.
A charge u/s 276-CC of Income Tax Act was framed against the accused, to which he pleaded not guilty and claimed trial. The matter was posted for post charge evidence during which again the witnesses of the complainant were allowed to be cross-examined.
The statements of accused were recorded u/s 313 CrPC r/w Section 281 CrPC wherein he pleaded false implication.
The ACMM concluded that prosecution had been successful in proving its case and accordingly convicted the accused/appellant for offence punishable u/s 276CC of Income Tax Act and sentenced him accordingly.
The accused assessee approached the Appellate Court of Special Judge challenging the satisfaction note u/s 153C.
It was asserted that satisfaction note u/s 153C is a sine qua non for the section to come into operation and the note must display the reasons or basis of the conclusion to the effect that assessing officer of the searched person is satisfied that the seized documents belong to the person other than the searched person thereby rebutting the legal presumptions that any article, thing, document etc. found in a premises is presumed to belong to the person whose premises are searched under the provisions of Income Tax Act.
According to the appellant, the satisfaction note was silent as to the reasoning for coming to the conclusion as also there was no reference to any statement allegedly recorded by assessing officer or to any other material and therefore, the notice was bad and deficient in law. It was contended that findings of trial court were erroneous and against settled legal position.
The Hon’ble Special Judge opined that the role of appellate court in an appeal is extremely important. The burden is on the appellant to show that judgment impugned is wrong or perverse. Appellant can not succeed by only showing that either view is equally possible. Unless appellate court finds the impugned order clearly unreasonable and that there are substantial and compelling reasons to interfere, the same should not be interfered with. If the view taken by trial court is reasonable possible view, it should not be disturbed.
The Hon’ble Special Judge pointed out that it has been held by Supreme Court that interference in appeal against acquittal is permissible only if the decision of the trial court is perverse. If two views are possible on a set of evidence, then the appellate court need not to substitute its own view in preference to the view of the trial court.
On examining the relevant observations of trial court, the Appellate Court opined that no justification or reason was present to interfere with the said findings as to the satisfaction note. The facts and circumstances of the case, the statements of witnesses and the documents proved therein clearly showed that requirement of section 153C Income Tax Act had been complied with by the concerned officer before launching prosecution against the appellant.
The Appellate Court opined that the trial court was required to see that ingredients of offence punishable u/s 276 CC Income Tax Act stood proved on record by way of sufficient and cogent evidence and there was proper and objective appreciation of evidence by the trial court and observations were comprehensive and based on due reasons.
The Special Judge dismissed the appeal as without having any merit or substance. The appellant / accused was given into custody.