Sharad Manohar, J.
1. This revision application is filed by the Assistant Director of Inspection (Intelligence), Bombay of the Income-Tax Department of the Government of India against the order passed by the learned Addl. Chief Metropolitan Magistrate, 19th Court refusing to frame charge against respondent No. 1 (who will be referred to hereafter as the 'accused'). The petitioner (who will be referred to hereafter as the 'complainant') had filed Criminal Case No. 64/S of 1980, against the accused on 26-3-1980, for offence under section 277 of the Income-Tax Act 1961. For the alleged offence arising out of, more or less, the same set of facts, another Criminal Case No. 78/S of 1980, was filed by him against the accused for offence under section 191 read with section 193, Indian Penal Code on 28-3-1980. Some evidence was led by the prosecution even before the framing of the charge and after examining the said evidence and after considering the likely plea of the accused, the learned Magistrate was of the opinion that the facts stated in the two complaints as also the materials sought to be placed by the prosecution in support of the said complaint could not conceivably bring home a conviction against the accused either under section 277 of the Income-Tax Act or under section 191 read with section 193, I.P.C. Hence, by the order dated 9-6-1982, the learned Magistrate passed an order discharging the accused in both the cases.
The Present revision application is filed by the Department against the said order of discharge.
2. I may state here that both the cases were considered by the learned Magistrate together because the facts in both the cases belonged, more or less, to the same set of circumstances. As a matter of fact, the facts stated in the first complaint, Case No. 64/S of 1980, cover the facts contained in the second complaint, Case No. 78/S of 1980, also. The offences are, however, of a different character. The offence alleged in the case of 78/S of 1980, was that the accused had made a false statement before the relevant officer of the Department as regards the ownership of certain articles of value found in his house on the date of raid, thus committing an offence under section 191, I.P.C. Punishable under section 193, thereof. The substance of the offence alleged in Criminal Case No. 64/S of 1980, was that although the accused had agreed to treat some of the precious articles namely, the miniature paintings, found in his house on the date of raid to be of his ownership and had condescended to pay income-tax on the same on the basis that they were his articles without admitting that on the relevant date namely, the date of the raid, they belonged to him, still while filing the return in that behalf he had under-valued the said valuable articles, namely, the miniature paintings, to a gross extent and had, thus, committed the offence under section 277 of the Income-tax Act.
3. The revision application was argued at length before me on 15-6-1983, as also on 16-6-1983, by Shri Poras Mehta, the learned Counsel for the petitioner as well as by Shri H.M. Jagtiani for the accused. After hearing the learned Counsel for both the parties at length but before hearing them finally, I expressed an opinion in the Court that this was certainly a case where the order passed by the learned Judge as regard the offence, under section 277, could not be seriously called in question. At the same time, I also expressed an opinion that so far as the desired charge under section 191, read with section 193, I.P.C., was concerned, the order of the learned Judge refusing even to frame charge against the accused for the offence under that section and discharging the accused is said Case No. 78/S of 1980, was unsupportable. Mr. Jagtiani, therefore, took time from the Court to consider whether he should submit to the order of the Court so far as the question of framing charge in Criminal Case No. 78/S of 1980, was concerned. I may state here that Shri Mehta did not make any such statement relating to Case No. 64/S of 1980. All the same, however, I adjourned the hearing of the petition till today to enable the learned Advocate for the petitioner to state whether he would insist on opposing the said revision application against the order in Criminal Case No. 78/S of 1980.
When the petition reached before me today, Mr. Jagtiani, the learned Counsel for the respondent-accused made an unequivocal statement before me that he had instructions not to argue the matter any further and that the accused was submitting to the orders of the Court and was agreeable to a charge being framed against him in Criminal Case No. 78/S of 1980. The hearing of the petition, therefore, proceeded only on the question as to whether the order in Criminal Case No. 64/S of 1980, refusing to frame charge for offence under section 277, of the Income-tax Act could be sustained. I heard Mr. Mehta further on the said question today.
I may state here at the outset that Mr. Mehta was not in a position to advance any argument other than those urged by him on the last date of hearing in support of his contention that on the material placed before the Court it was incumbent upon the learned Magistrate to frame charge in said Criminal Case No. 64/S of 1980.
4. Just a few facts may be stated very briefly in order to indicate the reason why I am passing the order allowing the revision application so far as Criminal Case No. 78/S of 1980 is concerned and why I am dismissing the same so far as Criminal Case No. 64/S of 1980 is concerned.
The accused is admittedly a director of several companies and is assessed for income-tax. On 9-1-1975, almost at mid-night, his residential flat was raided by the Income-tax Officer and valuable articles worth approximately Rs. 9,21,000/- were seized by the Officer, under panchanama, under the suspicion that the returns filed by the accused under the Income-tax Act as also the other cognate Acts did not disclose the said articles as assets belonging to the accused. On 10-1-1975, mid-night, statement of the accused was recorded by the Income-tax Officer concerned. The statement pertained to various articles. We are concerned with two kinds of articles :
(a) Coins of silver and other metals (other than gold) of the approximate value of Rs. 2,37,584/-; and
(b) several miniature paintings approximately valued by the department for Rs. 2,31,350/.
The substance of the statement made by the accused relating to the coins and miniature paintings was that all those silver, nickel and copper coins as well as the miniature paintings had been left to him by one Kalyanmal for approval and that those articles did not belong to him, the accused, as such. On 11-3-1975, thereafter, the accused made a second statement before the Office. It appears that the making of second statement continued from 11-3-1975 to 18-3-1975. Various questions were asked to the accused during the course of the second statement. In answer to question No. 91 the accused stated that 68 bags of the value of Rs. 81,600/- of the silver coins (other than gold coins) belonged to the family consisting of the accused and his four brothers. He further stated that for the remaining coins a sum of Rs. 1,52,000/- was paid by him to Kalyanmal. He further stated that the coins of the value of Rs. 81,600/- were declared in the Wealth Tax Returns filed by his brothers.
5. Thereafter, certain correspondence ensued between the accused on the one hand and the department on the other. In the said correspondence, the accused sought to insist upon the self-same-plea as regard the owner-ship of the coins raised in the second statement in answer to question No. 91 referred to above. The correspondence also shows certain pleas raised by the accused relating to the ownership of the miniature paintings.
6. On 29-9-1975, the accused filed his income-tax return. The return was accompanied by a covering letter of that date written and signed by R. Jain and Co., which is a firm of Chartered Accountants, acting for the accused. As per the said letter, the accused had decided to treat the miniature painting, the gold-coins and the currency notes to be of his ownership without giving any confession as such in that behalf. The miniature paintings were valued by him at Rs. 40,000/-, the gold coins at Rs. 1,70,000/- and currency notes at Rs. 5000/-. In para 5 of the said letter, it was stated as follows :
'In view of the above and with a view to avoid multiplicity of legal proceedings involving time and money and with a view to purchase peace and extend full co-operation, our client has after careful consideration offered the said amount as his income in the return of income for the assessment year 1975-76'.
In view of the statement made by Shri Jagtiani for the accused, it is unnecessary to set out in detail the various statements made by the accused in relation to these two items of property, namely, the coins and the miniature paintings. It is enough to state here that while offering to pay income-tax upon the said assets namely, the miniature paintings, the accused valued them at Rs. 40,000/- and paid income-tax on the same on the basis that the said value of the miniature paintings was the income of the accused for the current assessment year. On 11-9-1978, the assessment order was passed by the Income-tax Officer rejecting the valuation of the said item or items of property, namely, the miniature paintings, as given by the accused and valuing the same for an amount of Rs. 2,31,350/-. I am informed that an appeal has been filed against the same. But we are not concerned with the said appellate proceedings. Likewise, I am informed by Mr. Kher that independent proceedings regarding penalty in connection with the valuation made by the assessee have been started by the Department against the accused. But we are not concerned even with those proceedings. All that we are concerned here is the fact that on 26-3-1980, Criminal Case No. 64/S of 1980 was filed by the Department against the accused as mentioned above, for the alleged offence of under-valuation made punishable by section 277, of the Income-tax Act and on 28-3-1980. Criminal Case No. 78/S of 1980, was filed by the Department against the accused for the alleged offence of a false statement allegedly made by the accused on 9-1-1975, relating to the ownership of :
(a) the coins (other than gold coins) and currency notes; and
(b) miniature paintings.
7. As regards the material placed by the persecution in Criminal Case No. 78/S of 1980, the learned Magistrate appears to have taken a somewhat unsupportable view on the question as to whether the material placed before him by the prosecution in support of the of complaint disclose any offence or not. In view of the statement made by Shri Jagtiani I don't wish to analyse in detail the various statements made by the accused at various times and particularly the two versions given by him, the first in his statement recorded on 10-1-1975, (mid-night) and the other during the proceedings held between 11-3-1975, and 18-3-1975. But it is not disputed before me that these statements do betray a noticeable inconsistency in the contentions of the accused and it does appear, prima facie that the explanation sought to be given by the accuse in his first statement dated 10-1-1975, is not easy to be reconciled with his subsequent statement given in the proceedings held between 11-3-1975, and 18-3-1975. Moreover, in the statement made on 11-3-1975, itself, certain ostensible irreconcilable inconsistency can be noticed. I may state here that at least in the order of discharge passed by the learned Magistrate there is no indication of any valid explanation given by the accused relating to the said inconsistency. I don't want myself to be taken as meaning that he cannot give the explanation during the course of the trial. But what I mean to observe is that so far as the learned Magistrate was concerned, he should have seen that the two statements given by the accused on two different occasions are mutually inconsistent and the inconsistency is nowhere resolved in the subsequent correspondence. For ought one knows, the accused may be able to show that the statement made by him on one of the two days was a true and correct statement and he may even have some reasonably acceptable explanation for apparent inconsistency between the two. But the Court cannot assume that such explanation exists. Once the inconsistency in his subsequent statement made on oath is brought home to the Court, the Court cannot just wish away the inconsistencies and cannot hold that the accused may have some plausible explanation to the inconsistency. If the accused wants to give some explanation, he must give it either before the charge is framed and satisfy the Court that in view of the explanation, which must be proved by him, no charge can be framed or else he must face the charge under section 191, read with section 193, of the Indian Penal Code, and prove during the trial that the statement dated 10-1-1975, was not a false statement. What the learned Judge has done is that he has assumed the fact that though the accused stated in his statement, dated 10-1-1975, that the coins and the paintings belonged to one Kalyanmal and that he was not the owner of the paintings on the date of the raid, still it might be quite possible that the accused had purchased those articles after the date of the raid. For coming to this conclusion, the learned Magistrate relied upon the covering letter accompanying the return filed by the accused dated 29-9-1975. The accused had stated in the said letter that for the purpose of purchasing peace, he was prepared to pay income-tax on the various articles such as gold coins, currency notes and the miniature paintings. The learned Magistrate held that this statement contained in the said letter did not show that the accused admitted the ownership of the articles as on the date of the raid. The learned Magistrate inferred that form the materials it can well be said that the said articles had been purchased by the accused subsequent to the date of the raid. I make it clear that I don't wish to foreclose the right of the accused to prove that this reasoning is correct. But at the same time, I must observe that the learned Judge had no justification to make a surmise on behalf of the accused to this effect. The learned Magistrate did not have any justification to hold that this is the case which the accused can make. As a matter of fact, the learned Magistrate should see that if this was the case, that case would be inconsistent with his second statement given in the proceedings between 11-3-1975 and 18-3-1975. The learned Magistrate was not entitled to assume that in the face of the said second statement, the accused would come out with a plea that he had purchased all those articles subsequent to the date of the raid. In this view of the matter, to my mind, the learned Judge was duty bound to frame a charge against the accused in Criminal Case No. 78/S of 1980, for offence under section 191, read with section 193 of the I.P.C. I reiterate that since the learned Counsel for the accused has made a statement mentioned above conceding this legal position, no further discussion as regards the order in Criminal Case No. 78/S of 1980, is necessary.
8. The position, however, is entirely different so far as the order of discharge relating to Criminal Case No. 64/S of 1980, is concerned. In that case, all that is alleged by the prosecution is that according to the prosecution the price of the miniature paintings has been estimated by the Valuer appointed by the Department to be Rs. 2,31,350/- and the contention of the Department is that the valuation of Rs. 40,000/- given by the assessee/accused is miserably below par giving rise to offence under section 277, of the Income-tax Act. However, it was not disputed before me by Mr. Mehta that in the assessment proceedings the accused had specifically asked for an opportunity to lead evidence of his own export Valuer to prove that the miniature paintings could not be valued at a price exceeding Rs. 40,000/- and that request was turned down by the Income-tax Officer on the ground that the Department had already got those paintings valued from an expert Valuer namely, the Curator of the Prince of Wales Museum. It was not disputed that no opportunity was given to the accused to cross-examine the said Valuer. However, it was contended that no opportunity was asked for by the assessee for cross-examination of the Department's said Valuer. I am not satisfied about the validity of this reply. But that apart, to my mind, it is an exercise in futility to hold enquiry into the question as to what would be the objective value of such articles as miniature paintings. It is admitted that these miniature paintings are nearly 200 to 300 years old. From the very nature of things, they cannot have any fixed valuation. Person 'A' may not have any value for these articles. Another connoisseur may put upon them the value which may be sky-high. It may be that if the Curator of the Prince of Wales Museum was asked for his advice as to what price the Museum should purchase the said articles, he would have advised that Authorities of the Museum to purchase them for the value up to the one mentioned by him. The Museum might or might not, in such case, purchase those articles at that price, depending upon its financial position as at that time. The Curator might give same advice to his friend in confidence; but that friend howsoever affluent may not rush to offer that music price straightaway. He, will probably higgle-haggle, keeping in mind that the price advised by the Curator should be the upper limit. In this process, he might get it for a song, depending upon numerous factors including the financial urgency faced by the vendor. From the very nature of things, the articles are of such a character that their value is bound to be more or less, of a subjective determination and the articles are incapable of having any objective value as such, meaning thereby, that they are incapable of having any such fixed value as will be universally accepted or insisted upon. This being the objective position of the article which have only a subjective valuation, to my mind, it will be impossible for anyone of the Department to bring home the offence of under-valuation made punishable under section 277, of the Income-tax Act against the accused. The order passed by the learned Magistrate in this behalf is, therefore, a correct order to my mind.
9. The revised application is, therefore, partly allowed. The Rule earlier issued is made partly absolute. The order of discharge passed in favour of the accused in Criminal Case No. 78/S of 1980, is hereby quashed and set aside and the learned Magistrate is ordered to frame an appropriate charge against the accused on the basis of the complaint filed by the complainant in the said case, if necessary, read along with the material placed before him on behalf of the prosecution. I am told that common evidence was led for framing charge in both the cases. If that is so, the learned Magistrate will be at liberty to refer to the said common evidence while framing the necessary charge in Criminal Case No. 78/S of 1980.
So far as Criminal Case No. 64/S of 1980 is concerned, the rule stands discharged.