Release of convicts prosecuted under Income Tax Act on probation- Revenue’s condonation appeal dismissed

Release of convicts prosecuted under Income Tax Act on probation- Special Judge dismiss Revenue’s appeal delay condonation application for casual approach

ABCAUS Case Law Citation:
ABCAUS 2574  (2018) (10) AC

Important Case Laws Cited/relied upon by the parties:
Mohd. Hasim Vs State of UP
State of Nagaland Vs.Lipok AO AIR 2005 SC 2191

In the case of a partnership firm, prosecution was filed against the partners and auditor on the allegation that during the course of assessment, the Assessing Officer found that convicts had attempted to evade Tax penalty or interest chargeable or imposable under the Act and had further made false statement in the verification of the statement/Account and other documents which were false and which they knew are believed to be false.

After conclusion of evidence, the ACMM convicted three partners for offences u/s 276 (C) (1) r/w Section 278 and Section 277 of the Act and the auditor was convicted for offence u/s 278 of the Act.

However, appeal was filed by the Income Tax Department against the order on sentence by ACMM by which he, after convicting the convicts inter alia sentenced one convict to pay a fine of Rs. 50,000/ each for the offence u/s 276 C (1) and 277 of the Income Tax Act, 1961 (the Act) and released the three convicts including a chartered accountant on probation for a period of six months.

The main contention of the Revenue was that the Trial Court failed to consider Section 292 A of the Income Tax Act which specifically provides that nothing contained in Section 360 Cr.P.C or in the Probation of Offender Act shall apply to a person convicted of an offence under Income Tax Act unless that person is under 18 years of age.

Thus it was argued that the benefit of probation given by Trial Court was beyond its jurisdiction and the order of releasing the accused on probation was patently wrong and was liable to be corrected.

It was also submitted that Hon’ble Supreme Court has held that when the legislature has prescribed minimum sentence without discretion, the same cannot be reduced by the court and in such cases imposition of minimum sentence is mandatory and leaves no discretion to the court.

The Revenue prayed the Special Judge for setting aside the impugned order

and to award maximum sentence to the convicts.

Along with the appeal, the Income Tax Department also filed an application u/s 5 of the Limitation Act seeking condonation of delay in filing the appeal. In the application it was stated that the delay had been caused in getting the certified copy of the impugned order, the opinion of public prosecutor was received and thereafter file was processed for obtaining approvals of concerned officials which consumed time and appeal could not be preferred in the prescribed period.

The respondents opposed the application for condonation of delay and argued that the application was drafted in most casual manner. It was argued that there was a huge delay in filing the appeal and in the absence of any sufficient cause being shown to condone the delay, the application be dismissed.

The Special Judge observed that there was no dispute about the fact that Hon’ble Supreme Court had  clearly observed that although no special indulgence can be shown towards the State, but certain amount of indulgence to the State is not impermissible on account of the fact that in the case of Government, officials tend to cause delay intentional or otherwise in processing the files.

The Special Judge opined that the word ‘sufficient cause’ shall be considered, in the case of State appeals, with pragmatism and justice oriented approach as observed by the Apex Court.

The Special Judge further opined that it must be borne in mind that after the  expiry of period of limitation for filing the appeal, a vested right is created in favour of the opposite party on the basis of a judicial finding and that should not be disturbed until cogent reasons are shown. In all such cases, the prosecution must show that they are acting with utmost diligence to have their grievance redressed at the earliest rather than going through the red tape where each of the officials takes decision according to their own whims and fancies.

It was noted that As per Article 115 (b) (ii) of The Schedule to the Limitation Act, 1963 the period of limitation for filing the appeal is 30 days and the period starts running from the date of sentence or order. According to Section 12(1), in computing the period of limitation for any suit, appeal, the day from which such period is to be reckoned, shall be excluded. According to Section 12(2) of the Limitation Act, the day on which the judgment complained of was pronounced and time requisite for obtaining a copy of the decree, sentence or order appealed from shall be excluded.

It was observed that the records showed that order on sentence was passed on 19.01.2018. Application for obtaining the certified copy was filed on 08.03.2018 and certified copy was received on 09.03.2018. Whereas the present appeal was filed on 03.07.2018.

The Special Judge stated that in the present case there was a delay of 134 days in filing the appeal. However, as the certified copy had been applied after the expiry of period of limitation, appellant was not entitled to exclude the period consumed in calculating the period of limitation since the period had already expired.

The Special Judge opined that the above facts clearly showed the casual approach on the part of officials of the Revenue in not obtaining the certified copy within the time permissible to file the appeal.

It was further noted that it had also been stated in the application that after obtaining the certified copy of the impugned judgment and order on sentence,

opinion of Public Prosecutor was received and thereafter approval of the concerned officials were obtained. However, in the entire application, the details of the persons from whom the opinion and approval has been obtained, number of days the officials took in giving this opinion had not been disclosed at all. Thus, the application was bereft of necessary details which could help the appellant in showing sufficient cause for condonation of delay in filing the present appeal.

It was further observed that the application also did not mention any date on the final approval was given by the concerned official/officer for filing the appeal. The appeal was filed almost after 4 ½ months after the expiry of the period of limitation.

The Special Judge opined that such a callous attitude on the part of the appellant cannot be countenanced. Thus, it was held that the judgment relied upon by the appellant seeking condonation of delay did not come to the rescue of the

appellant as the application was totally devoid of any details and therefore, even in such a case the delay cannot be condoned as no ‘sufficient cause’ had been shown.

Accordingly, the application seeking condonation of delay was dismissed and at the same time since the appeal also did not survive being barred by limitation, it was also dismissed.

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