1. Petitioner No. 1 in this case is a partnership firm (SIC) ling in handloom clothes and art silk yarn at Elampallai in Salem (SIC) trict. Petitioner No. 2 is its managing partner. This business was start-(SIC) by this firm (sic) filed the income-tax return before P.W. 1 for the years (SIC) mencing from November 10, 1961, giving ' August to August' as the (SIC) of accounting for them. P.W. 1, during the scrutiny, found in (SIC) dbit P-7, the day book for the year ending August, 1963, an entry (SIC) iting to the year 1965. This kindled his suspicion. He felt that (SIC) ibit P-7 was written in the year 1965. Then he wrote to the (SIC) nmercial Tax Officers and got from them particulars about the various (SIC) ks produced by the petitioners before them. We are now concerned, in(SIC) case with the books for the periods from January 10, 1961, to August 28,(SIC) 2 and August 28, 1962, to August, 1963. Exhibit P-49 is the day book (SIC) exhibit P-50 is the ledger for the first period. Exhibit P-7 is the day (SIC) k and exhibit P-8 is the ledger for the second period. P,W, 1 issued anotice under Section 142(1) of the Income-tax Act, viz, exhibit P-19, callin (SIC) on the petitioners to produce the account books for the year 1963-64. Th (SIC) books were produced on March 15, 1966. On that, he recorded a swor: (SIC) statement, exhibit P-22, from the second petitioner, the managing director (SIC) He asked him as to whether he had got any other books and the answe (SIC) was that he had no other books. Thereupon exhibit P-23 notice was issue (SIC) by him calling upon him tp produce the books signed by the Commercia (SIC) Tax Officers. By exhibit P-27, the petitioners stated that they hav (SIC) produced all the books with them and that they had no other books (SIC) Thereupon a complaint for an offence under Section 276(1)(c) of th (SIC) Income-tax Act and under Section 193 of the Indian Penal Code, for making; (SIC) false statement was filed (exhibit P-32). The petitioners in defence contende (SIC) that they had produced the account books which they had with them and (SIC) that they never made any false statement as stated by the complainant (SIC) The District Magistrate, Salem, found as a fact that the petitioners had wit] (SIC) them some other account books which they had produced before the commer (SIC) cial tax authorities and that they had not produced them before P.W. 1 (SIC) He further held that the statement made by them in exhibit P-22 tha (SIC) they had no other account books with them was false within the ambit o Section 193 of the Indian Penal Code. He convicted the 1st accused am (SIC) the 3rd accused under both the sections. Under Section 276(1)(c) of the (SIC) Income-tax Act, he sentenced the first accused-firm to pay a line o (SIC) Rs. 1,000 and the managing partner, the 3rd accused, to pay a fine o (SIC) Rs. 1,000. Under Section 193, Indian Penal Code, he sentenced the 3rd (SIC) accused to suffer rigorous imprisonment for six months with a fine o (SIC) Rs. 2,000. On appeal, the Sessions Judge, Salem, affirmed the findings (SIC) confirmed the sentences of fine, and reduced the sentence of imprison (SIC) ment on the 3rd accused to one till the rising of the court. The (SIC) correctness of these findings is canvassed in this revision.
2. Petitioners arc dealing in handloom clothes and art silks in Salem (SIC) District from 1961. They have filed the income-tax return only in the (SIC) year 1966, for all the previous years, i.e., from the year commencing (SIC) from the time they had commenced business, viz., November 10, 1961 (SIC) Their year of accounting for income-tax purposes is from August to (SIC) August. Prior to that, they had produced their accounts before the (SIC) sales tax authorities for purposes of assessment after a determination of (SIC) the turnover in their business. These are admitted facts. During the (SIC) scrutiny of accounts, P.W. 1, the Income-tax Officer, found in exhibit P-7 (SIC) the day book, for the year 1963, an entry relating to the year 1965. He (SIC) opined that this day book, exhibit P-7, was written only in the year 1965 (SIC) Thereupon on March 7, 1966, he issued a notice, exhibit P-18, under sec (SIC) tion 142(1) of the Income-tax Act calling upon the petitioners to produce (SIC) all the account books of their business from the date of the commencement till the date, viz., March 15, 1966. Petitioner No. 2 received this notice, appeared before the officer and produced the day books exhibits P-49, P-7 and P-16 and the corresponding ledgers, exhibits P-50, P-8 and P-17. Thereupon P.W. 1 recorded the statement, exhibit P-2, from him (vide page 53 of volume 3). He, in this statement, stated that the account, books produced by him were the only books maintained by him and available with him. Thereupon P.W. 1 asked him as to whether he had brought with him and produced before him all the day books and ledgers relating to their business from the commencement till the date March 31, 1966. Petitioner No. 2 answered in the affirmative stating that exhibits P-49, P-50, P-7, P-16 and P-18 are the only books which he had. Then P.W. 1 specifically questioned him as to whether he had with him any other chitta and account books for the period from November 10, 1961, to March 31, 1966. Petitioner No. 2 asserted positively that he had no other books. He further stated that he had given all the books. On the same day P.W. 1 issued the notice, exhibit P-23 (see volume 3, page 57) to petitioner No. 2, calling upon him to produce certain books of accounts that were produced before the Commercial Tax Officers, stating therein that in these books the officers have signed in certain pages giving necessary date and details. He gave this notice directing him to produce those books for the two periods in question and also for the subsequent years. By exhibit P-27 (volume 3, page 64), petitioner No. 2 stated that other than the books already produced by him, he had no other books. The prosecution case is that these statements are false statements intentionally made by the petitioner No. 2 and so he is punishable under Section 193 of the Indian Penal Code. The further case is that the petitioners have not produced the account books, which admittedly they had produced before the Commercial Tax Officers in response to the notice of demand by P.W. 1. This is punishable under Section 276(1)(c) of the Income-tax Act.
3. Learned counsel appearing for the petitioners contends that the petitioners were maintaining what is commonly called as rough chitta books, that in the year 1964-65, when they had the necessity for filing the income-tax return, they prepared proper day books with reference to the entries contained in the said rough chitta books and from those day books, the ledgers, exhibit P-49 and P-17, were prepared and that the rough day books were not available with them on the date when P. W. 1 questioned them. He further contends that the prosecution has not proved that the petitioners had in their possession any other account books other than those books already produced on the date when they were examined. Next, it is contended that the question was in general terms in presenttense as to whether they had any books on that day and for this answer was given by them in the negative and, in those circumstances, it is urged that there could be no question of any one making any false statement so as to render him liable under Section 193 of the Indian Penal Code.
4. There is more of ingenuity than of substance in these contentions now advanced by the petitioners. The courts below have, as a fact, held that the petitioners had with them account books other than the books produced by them and they were not produced before P. W. 1. The further finding is that the statement in exhibit P-22 that they had no other account books is a false statement, intentionally made by the second petitioner. It cannot be said that this finding is either erroneous or perverse so as to justify an interference in revision. Even otherwise, the prosecution has proved beyond doubt that the petitioners had with them other account books and that they did not produce those account books to P.W. 1 when he demanded them under Section 142 of the Income-tax Act. In other words, there is intrinsic evidence in the case to show that such account books, in fact, existed. The petitioner commenced the business on November 10, 1961. We are concerned with two periods. The first period is for the year from April 1, 1961, to March 31, 1962. The second period is for the year commencing from April 1, 1962, to March 31, 1963. P. W. 5, the Deputy Commercial Tax Officer, had checked the account books, i.e., the day book and the ledger of this firm on September 25, 1962. He has signed on page 13 of the day book and page 73 of the ledger. Exhibit P-39 is the notes which evidence this scrutiny thus made by him (vide page 94, volume 3). In page 13 of the day books he has signed. In the ledger, he has signed on page 73. This was on September 25, 1962, (vide page 41). P.W. 5 has spoken to these facts and his evidence, which stands corroborated with the contemporaneous records, viz., exhibits P-39 to P-41, conclusively establish that there were account books in which he had signed on pages 13 and 73. This day book and the ledger have not been produced before P.W. 1. On the other hand, they have produced exhibit P-49, the day book, and exhibit P-50, the ledger, for this year. We do not have the signature of P.W. 5, the officer, in these books. In the, ledger, exhibit P-50, P.W. 7, the Assistant Commercial Tax Officer, has signed on February 4, 1964. This officer is an officer who succeeded P.W. 5 and he was scrutinising the accounts in the year 1964. The fact remains that the account books, viz., day book and the ledger, admittedly signed by P.W. 5 for the year 1962, were not produced before P. W. 1. Obviously, exhibits P-49 and P-50 were brought into existence some time late in the year 1964 and produced before P.W. 7. Thus, it is obvious that the petitioners did not produce the day book and the ledger in which P. W. 5 had signed on the 25th of September, 1962.
5. Then we come to the period from April 1, 1962, to March 31, 1963. P.W. 1, the Deputy Commercial Tax Officer, had scrutinised the books in the year 1964. He had signed in page 173 of exhibit P-50. Exhibit P-43 is the notes of check. The sales tax year for purposes of assessment of sales tax was from April and ends with March. He had called for accounts for the year 1961-62 (April to March) and from April, 1962, to March, 1963. Exhibit P-43 is the notes of check, vide volume 3, page 95. Two ledgers and one day book were produced before him. He has signed on page 143 of the ledger and page 53 of the day book. This is evidenced from his notes of check made on February 4, 1964, in exhibit P-43 (see also page 45). The ledger in which he had signed on page 143 and the day book in which he had signed on page 53 were not produced before P.W. 1. Exhibit P.W. 7 is the day book and exhibit P-8 is the ledger produced for this year. P.W. 7's signature is not found in them. In exhibit P-7 no one has signed, but in exhibit P-8 ledger P. W. 8 has signed. Thus, it is obvious that one ledger and one day book signed by P.W. 7 on February 4, 1964, were not produced. P.W. 1 has specifically referred to these books and stated that the petitioners have not produced them. On the other hand the petitioners have stated that other than the books produced, they had no other books with them. Obviously this statement is a false one. Thus, the prosecution has proved beyond doubt that the petitioners had with them other account books, admittedly signed by the Commercial Tax Officers, and when a notice under Section 142(1) of the Income-tax Act was issued and when a further notice specifically calling for those books were issued, they did not produce those books, but made a false statement to the effect that they had no other books.
6. Exhibit P-22 is the sworn statement recorded by P. W. 1 from petitioner No. 2. He had questioned him as below :
' Have you got any other books
Answer : I have no other books. '
7. Then P. W. 1 issued a notice under Section 142(1) to produce the books signed by the Commercial Tax Officers. By exhibit P-27, petitioner No. 2 stated that he had produced all the books he had and that he had no other books. Obviously, the statement thus made by him is a false statement made intentionally.
8. Learned counsel appearing for the petitioners contends that when books are not produced as per the notice issued under Section 142 of the Act, it is imperative on the part of the concerned officers to act under Section 132, viz., issue a warrant for search. Failure to issue a search warrant does not bar a prosecution for the specific offence alleged to have been committed by a particular party. Section 276(1)(c) of the Income-tax Act of 1961 provides that if a person, who is called upon undersection 142(1) of the said Act to produce or cause to be produced such accounts and documents as are referred to therein, fails to produce them without reasonable cause or excuse, he would be punishable with a fine indicated therein. It is, therefore, necessary for the prosecution to establish: (1) that a notice was issued to the person concerned to produce the account books, (2) that the said notice was served on him, (3) that notwithstanding such service, he did not produce the account books called upon, and (4) that such non-production was without reasonable cause or excuse. The question is whether the prosecution has shown that account books really existed and were not produced. . The question as to whether the non-production is without reasonable cause or excuse will arise if and when the reason for the non-production is given by the person called upon to produce the account books. When the account books called upon and which are proved to be in existence are not produced and where the person called upon to do so does not give any reason for not producing them, the question of there being any reasonable cause or excuse for such non-production will not and cannot arise. There is no substance in the contention that the rough chitta books which existed, even as admitted by the petitioners, were not available on March 15, 1966, because they were either destroyed or disappeared. They did not put forth any such case in exhibit P-27. Thus, the prosecution has proved beyond doubt that the petitioners failed to produce without reasonable cause or excuse the account books which actually existed and which they had produced before P. Ws. 5 and 7 on September 25, 1962, and February 4, 1964, despite their being called upon to do so by exhibit P-23 notice dated March 16, 1966. The conviction under Section 276(1)(c) of the Income-tax Act is correct. They have been sentenced to pay a fine of Rs. 1,000 under this head. This is not excessive. Both are confirmed.
9. Then as regards the conviction under Section 193 of the Indian Penal Code, I have already held that the statement made by petitioner No. 2, viz., that he had no account books other than those already produced by him on March 15, 1966, under exhibit P-22 before P. W 1 is clearly false. Section 136 of the Income-tax Act provides that any proceedings under the said Act before an income-tax authority shall be deemed to be a judicial proceeding for purposes of sections 193 and 228 and for the purpose of Section 196 of the Indian Penal Code. Therefore, exhibit P-22 is a statement made by petitioner No. 2 before P. W. 1 in a judicial proceeding. This statement is a sworn statement. P. W. 1 also has sworn that he recorded this sworn statement from petitioner No. 2. He has not been cross-examined on this aspect. The conviction of the 2nd petitioner under Section 193 of the Indian Penal Code is also correct and the same is confirmed. The court below has imposed a fine of Rs. 2,000 under this count. For the offence under Section 276(1)(c) the firm and this petitioner have been each sentenced separately to pay a fine of Rs. 1,000. Taking these facts into consideration, while confirming the conviction under Section 193 of the Indian Penal Code, I reduce the fine levied under count No. 2, viz., under Section 193, Indian Penal Code, to one of Rs. 500 (rupees five hundred only), in default simple imprisonment for two months.
10. With this modification in sentence, the criminal revision case is dismissed. Excess fine, if collected, shall be refunded.