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YasIn Khan and anr. Vs. Income-tax Officer, d Ward, Circle-ii, Hyderabad and anr. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAndhra Pradesh High Court
Decided On
Case NumberCriminal Revision Case No. 695 of 1982 (Criminal Revision Petition No. 687 of 1982)
Judge
Reported in[1984]150ITR692(AP)
ActsIncome Tax Act, 1961 - Sections 291; Code of Criminal Procedure (CrPC) , 1973 - Sections 306; Indian Penal Code (IPC), 1860 - Sections 120B; Constitution of India - Article 14
AppellantYasIn Khan and anr.
Respondentincome-tax Officer, "d" Ward, Circle-ii, Hyderabad and anr.
Appellant AdvocateN.V.S.R. Gopalakrishnamacharyulu, Adv.
Respondent AdvocateAdditional Public Prosecutor
Excerpt:
.....code, 1973, section 120b of indian penal code, 1860 and article 14 of constitution of india - immunity from prosecution given to particular accused challenged - high court observed that immunity from prosecution could be tendered to any person who in view of central government would give evidence in proof of offence in question - central government cannot in nature of things be expected to give an opportunity to each of accused to make statement in proof of prosecution case - there will then be no accused left to be proceeded against for trial of offences - government has therefore discretion to chose one of accused to figure as witness to prove its case. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the..........to the evasion of payment of tax on income, it is necessary or expedient so to do, tender to such person immunity from prosecution for any offence under this act or under the indian penal code, 1860 (45 of 1860), or under any other central act for the time being in force and also from the imposition of any penalty under this act on condition of his making a full and true disclosure of the whole circumstances relating to the concealment of income or evasion of payment of tax on income. (2) a tender of immunity made to, and accepted by, the person concerned, shall, to the extent to which the immunity extends, render him immune from prosecution for any offence in respect of which the tender was made or from the imposition of any penalty under this act. (3) if it appears to the central.....
Judgment:

Ramchandra Raju, J.

1. Petitioner Nos. 1 and 2 are accused Nos. 2 and 3 in C.C. No. 43 of 1980, on the file of the Special Judge for Economic Offences, Hyderabad. They are partners of the 1st accused firm. A-4 and A-5 were chartered accountants looking after the income-tax proceedings of A-1 to A-3. A-6 is a lower division clerk working in the Income-tax Department. The complaint was filed against these several accused by the concerned ITO alleging various offences under ss. 277 and 278 of the I.T. Act and ss. 107, 120B, 193 AND 196, IPC. The 5th accused, Mr. R. R. Vaidya, was, however, concerned only with s. 120B, IPC. Immunity from prosecution was given to the 5th accused under s. 291 of the I.T. Act. When the complainant wanted to examine Mr. Vaidya as a prosecution witness, the 6th accused expressed objection for examining the said Mr. Vaidya as a witness but the petition filed by the A-6 expressing such objection was dismissed by the Special Judge by his order dated July 1, 1982. Again when Mr. Vaidya was sought to be examined as a prosecution witness, the two petitioners filed Crl. M.P. No. 3103 of 1982, requesting the Special Judge to proceed under the provisions of s. 306, Cr. P.C., and supply copies to them before Mr. Vaidya is examined as a witness. The learned Special Judge dismissed the application being of the view that the provisions of s. 306, Cr. P.C., do not apply in the case of a person to whom immunity under s. 291 of the I.T. Act was given.

2. Section 291 of the I.T. Act runs as follows (only material portions extracted) :

'(1) The Central Government may, if it is of opinion (the reasons for such opinion being recorded in writing) that with a view to obtaining the evidence of any person appearing to have been directly or indirectly concerned in or privy to the concealment of income or to the evasion of payment of tax on income, it is necessary or expedient so to do, tender to such person immunity from prosecution for any offence under this Act or under the Indian Penal Code, 1860 (45 of 1860), or under any other Central Act for the time being in force and also from the imposition of any penalty under this Act on condition of his making a full and true disclosure of the whole circumstances relating to the concealment of income or evasion of payment of tax on income.

(2) A tender of immunity made to, and accepted by, the person concerned, shall, to the extent to which the immunity extends, render him immune from prosecution for any offence in respect of which the tender was made or from the imposition of any penalty under this Act.

(3) If it appears to the Central Government that any person to whom immunity has been tendered under this section has not complied with the condition on which the tender was made or is wilfully concealing anything or is giving false evidence, the Central Government may record a finding to that effect, and thereupon the immunity shall be deemed to have been withdrawn, and any such person may be tried for the offence in respect of which the tender of immunity was made or for any other offence of which he appears to have been guilty in connection with the same matter and shall also become liable to the imposition of any penalty under this Act to which he would otherwise have been liable.'

3. Section 306, Cr. P.C., provides (only material portions extracted) :

'(1) With a view to obtaining the evidence of any person supposed to have been directly or indirectly concerned in or privy to an offence to which this section applies, the Chief Judicial Magistrate or a Metropolitan Magistrate at any stage of the investigations or inquiry into, or the trial of, the offence, and the Magistrate of the first class inquiring into or trying the offence, at any state of the inquiry or trial, may tender a pardon to such person on condition of his making a full and a true disclosure of the whole of the circumstances within his knowledge relative to the offence and to every other person concerned, whether as principal or abettor, in the commission thereof.....

(3) Every Magistrate who tenders a pardon under sub-section (1) shall record -

(a) his reasons for so doing;

(b) whether the tender was or not accepted by the person to whom it was made,

and shall, on application made by the accused, furnish him with a copy of such record free of cost.'

4. Section 308, Cr. P.C., provides for the trial of the person who has not complied with the conditions of pardon.

5. A comparative reading of these provisions brings to the forefront the following differences. In case of tender of pardon under s. 306, Cr. P.C., every accused is entitled to copies of records of the proceedings leading to the tender of pardon. No similar provision is found in a case where immunity from prosecution was tendered under s. 291 of the I.T. Act. The power to tender pardon under s. 306, Cr. P.C., and the power to tender immunity from prosecution under s. 291 of the I.T. Act is to be exercised by different authorities specified therein. The petitioners are, therefore, not correct in requesting the Magistrate to proceed against Mr. Vaidya under the provisions of s. 306, Cr. P.C. That request was rightly negatived by the learned Special Judge.

6. It is submitted that Mr. Vaidya who was an accused cannot at all be examined as a witness for the complainant. Reliance is placed on Desai Digambarrao v. State of A.P. [1978] 2 An WR 579, in support of this the submission. That was a case where without recourse to s. 306, Cr. P.C., the prosecution wanted to examine one of the accused as a witness for the prosecution. Such an attempt was discountenanced. That decision cannot be an authority for submitting that even if pardon or immunity was granted to an accused, that accused cannot be examined to prove the prosecution case.

7. In the application which was negatived by the learned Special Judge, a request was also made to supply copies to the petitioners before Mr. Vaidya was examined as a witness and it is stated that otherwise the petitioners would be gravely prejudiced in their trial. Section 291 of the I.T. Act does not, of course, provide for the grant of copies of proceedings leading to immunity from prosecution tendered to Mr. Vaidya. Before, however, Mr. Vaidya is to be examined as a prosecution witness, the prosecution must make available for inspection of the accused and their counsel the statement leading to the immunity from prosecution tendered to Mr. Vaidya as otherwise the petitioners will be handicapped in crossexamining Mr. Vaidya with reference to the statement which he may have earlier made before the authorities concerned while granting such immunity to Mr. Vaidya. It is, therefore, directed that the complainant should make available to the accused and their counsel for their inspection such statement and it is only after giving such inspection of the proceedings Mr. Vaidya may be examined, allowing the accused to contract Mr. Vaidya on any statement earlier made by him before the Department.

8. Mr. Satyanarayana, learned counsel for the petitioners, has submitted that the power under s. 291 of the I.T. Act offends art. 14 of the Constitution. According to him, no guidelines are provided for the exercise of the power under s. 291 in choosing one of the several of the accused in whose favour the immunity from prosecution was tendered and the absence of such guidelines leads to unbridled exercise of power and s. 291 of the I.T. Act should be struck down as violating art. 14 of the Constitution. I do not find any substance in this submission. As in s. 306, Cr. P.C., the immunity from prosecution could be tendered to any person who, in the view of the Central Government, would give evidence in proof of the offences in question. It is not the petitioners' case that they have made any statements in proof of the prosecution case and claimed immunity from prosecution and offered to figure as a witness for the complainant. The Central Government cannot, in the nature of things, be expected to give an opportunity to each of the accused to make statements in proof of the prosecution case. There will then be no accused left to be proceeded against for the trial of the offences. The Government has, therefore, the discretion to choose one of the accused to figure as a witness to prove its case. So far as Mr. Vaidya is concerned, he is concerned only with the offence under s. 120B, IPC and s. 291 of the I.T. Act is not, therefore, susceptible to any attack made against it as violating art. 14 of the Constitution.

9. The revision is, accordingly, allowed in part to the limited extent of directing the complainant to allow inspection of the statement of Mr. Vaidya leading to the immunity from prosecution tendered to him a day before Mr. Vaidya is examined as a witness for the complainant. The revision in other respects is dismissed.


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