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income-tax Officer Vs. Sita Ram and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberCivil Revision Nos. 714 and 715 of 1979
Judge
Reported in(1980)18CTR(All)266; [1983]144ITR503(All)
ActsIncome Tax Act, 1961 - Sections 277 and 278
Appellantincome-tax Officer
RespondentSita Ram and ors.
Excerpt:
- - , the ito, as well as both the courts below, had no correct idea of the law applicable at that time. 1. they had been satisfied merely by imposing the tax due after taking into consideration the concealed income......that which existed at the time the offence was committed. 9. in the case of all these revisions, false returns were submitted prior to 1st april, 1964. the concealment was detected while dealing with the assessment year 1963-64, which dealt with the income for the financial year 1962-63 ending on march 31. the return in that case was filed on 27th september, 1963. all other returns, i.e., returns for 1957-58 to 1962-63, were naturally filed prior to this date. so the offences for filing false returns, in each case, were committed prior to september 27, 1963. 10. prior to april 1, 1964, the quantum of punishment for filing false returns according to section 277 of the i.t. act was simple imprisonment which might extend to six months or to fine which might extend to rs. 1,000 or both......
Judgment:

Mahabir Singh, J.

1. These revisions raise a common question of law and, therefore, have been heard together and are being disposed of by a common order.

2. The opposite party No. 1, Sita Ram, was convicted by the Chief Judicial Magistrate, Bareilly, under Section 277 of the I.T. Act, 1961, for filing false returns of his income for the various years from 1957-58 onwards to 1963-64, and in each case he was sentenced to six months' rigorous imprisonment.

3. On appeals in all these seven cases, the learned Sessions Judge, Bareilly, while maintaining the conviction of the opposite party No. 1, modified the sentence to a fine of Rs. 1,000 only.

4. The ITO, on whose complaint proceedings had begun in the court of the Chief Judicial Magistrate, filed a revision in each case and it was contended that the modification of the sentence made by the learned sessions judge was illegal and against the mandatory provisions of law. It was pointed out that the minimum sentence of imprisonment would not be less than six months' rigorous imprisonment and it could be reduced only when there was some special or adequate reasons but in that case also the sentence was to be one of imprisonment and there could be no sentence of fine at all. It was also alleged that the reason given by the learned sessions judge for reducing the sentence are far from satisfactory and do not merit any reduction in the matter of the sentence imposed by the Chief Judicial Magistrate in each case.

5. At the time of hearing none appeared for the opposite party No. 1. I have, therefore, heard only the learned counsel for the applicant and the learned Government counsel.

6. It appears that the applicant, i.e., the ITO, as well as both the courts below, had no correct idea of the law applicable at that time. They have applied the law as it existed prior to 1975. Section 277 of the I.T. Act prior to 1975 contained the following provisions:

'277. False statement in declaration.--If a person makes a statement in any verification under this Act or under any rule made thereunder or delivers an account or statement which is false and which he either knows or believes to be false, or does not believe to be true, he shall be punishable (with rigorous imprisonment for a term which may extend to two years :

Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six months).'

7. It was for this reason that though the learned Chief Judicial Magistrate while appreciating the fact that litigation was a long drawn out one, could not help it and had to impose the minimum sentence provided bylaw.

8. The learned sessions judge also followed this law. He, however, held that the minimum sentence could be reduced as there were adequate and special reasons to the contrary. But this was not the law either on the date of offence. It is not disputed that the law applicable would be that which existed at the time the offence was committed.

9. In the case of all these revisions, false returns were submitted prior to 1st April, 1964. The concealment was detected while dealing with the assessment year 1963-64, which dealt with the income for the financial year 1962-63 ending on March 31. The return in that case was filed on 27th September, 1963. All other returns, i.e., returns for 1957-58 to 1962-63, were naturally filed prior to this date. So the offences for filing false returns, in each case, were committed prior to September 27, 1963.

10. Prior to April 1, 1964, the quantum of punishment for filing false returns according to Section 277 of the I.T. Act was simple imprisonment which might extend to six months or to fine which might extend to Rs. 1,000 or both. From April 1, 1964, this provision was amended by Act No. 5 of 1964 and the bracketed portion of Section 277 as shown on p. 504 (supra) of this judgment was substituted in its place.

11. It appears that the courts below applied the 1975 law as it was in force when the complaints against opposite party No. 1 were filed. But as shown above the law applicable would be the law existing on the date the offence was committed. The learned sessions judge has given the alternative punishment of fine and so it cannot be said to be illegal.

12. The learned counsel for the applicant still contends that even if the old provisions prior to 1st April, 1964, are applicable, the courts should not have dealt with the offence so lightly and that at least some imprisonment was needed.

13. In revision, the discretion of the courts below in the matter of sentence is not to be interfered with unless it is wholly disproportionate and thus improper. The learned judge has imposed the maximum amount of fine which was the alternative punishment permissible, so it cannot be said that he exercised the discretion improperly. The policy of the Legislature was not to regard such offence then with seriousness. It was only in later years that the policy has changed and violations have been visited with severe punishment.

14. It may also be pointed out that in Criminal Revisions Nos. 714 and 715 of 1979, even the I.T. authorities had not imposed any penalty uponthe assessee, opposite party No. 1. They had been satisfied merely by imposing the tax due after taking into consideration the concealed income. In other cases heavy penalty had been imposed besides the tax due. The litigation as pointed out by the learned sessions judge has been a , long drawn out one and so under these circumstances there is no case for interference in the sentences imposed.

15. All the revisions have, therefore, no force and are dismissed.


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