IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 08TH DAY OF MARCH 2019 BEFORE THE HON' BLE MR.JUSTICE ARAVIND KUMAR CRIMINAL PETITION No.4472 OF 2018 BETWEEN:
Mr.Sunil Kumar Jallan, Son of Kisan Kumar Jallan, Aged 42 years, Residing at-703, Godrej Apartments, Kempapura, Bellary Airport Road, Bengaluru-560 092.
(By Sri.Diwakar.K. Advocate) AND:
1. State of Karnataka, Kudigehalli Police Station, Represented by State Public Prosecutor High Court Bengaluru-560 001.
2. Sri.B.Jankhanmuan, Son of Kuliamthong, Income Tax Inspector, Office of Income Tax Inspector, Unit 2(3), Central Revenue Building, Queens Road, Bengaluru-560 052.
3. Deputy Commissioner of Income Tax, Circle (1) (1) (1), …Petitioner Central Revenue Building, Infantry Road, Bengaluru-01.
(By Sri.Rachaiah, HCGP for R1 Sri.E.I.Sanmathi, Advocate for R3) …Respondents This Criminal Petition is filed under Section 482 of Code of Criminal Procedure praying to quash the charge sheet in Cr.No.328/2015 filed by respondent No.1 and the further proceedings against the petitioner in CC.No.28701/2017 for the offence p/u/s 353 and 204 of IPC pending on the file of C.M.M., Bengaluru.
This Criminal Petition coming on for Admission this day, the Court made the following:
ORDER The Officials of the Income Tax Department entered the office premises of M/s.A-One Steels India Private Limited at 3.15 pm on 09.11.2015 for survey action under Section 133A of Income Tax Act, 1961 (for short ‘Act’). Said survey was necessitated according to the Income Tax department on the ground that search and seizures conducted by Investigation Team, Kolkata by other directorates had revealed that many people were claiming bogus exemption under Section 10(38) of the Income Tax Act, 1961 namely, some listed Companies (Stock Exchange) have been established, who sell their shares at a lesser price to their clients and later on they manipulate their shares in such a manner that prices of shares will be increased within a short period and later on person, who purchases the shares, will sell the shares at a higher rate after certain period and claim the resultant Long Term Capital Gains (LTCG) as exempted under Section 10(38) of the Act. With this credible information, investigating team as noted herein above conducted survey of petitioner’s business premises under Section 133A of the Act.
2. At the time of survey being conducted, certain officials of the department were present and Mr.Sunil Kumar Jalan, the Director is said to have entered the office premises at 6 PM and when the process of survey was being wound up at around 2.30 am on 10.11.2015, after recording the statements of said Mr.Sunil Kumal Jalan, Director of M/s.A-one Steels India Private Limited under Section 131 of the Act, said person i.e. Sunil Kumar Jalan is said to have been entered the chambers where the Income Tax Inspector Shri.B.Jamkhanmuan, was in the process of packing of all the impounded materials and took out page No.107 containing some notings from the folder numbered A-3/AOSI/133A and swallowed it in the presence of Income Tax Authorities and efforts said to have been made by the said Income Tax Inspector to take out the page from the mouth of Mr.Sunil Kumal Jalan, was not successful or said paper was not being retrieved as he had swallowed it. Hence, alleging that the assesse was not co-operative and had destroyed all the evidences. During the survey, complaint came to be lodged at 17.45 hours on 11.11.2015 before the jurisdictional police namely Kudigehalli Police Station which was registered in Crime No.328/2015 for the offences punishable under Sections 353 and 204 of IPC. Hence, for quashing of the said proceedings, petitioner is before this Court.
3. I have heard the arguments of the Sri.Diwakar.K., learned counsel appearing for petitioner and Sri.E.I.Sanmathi, learned counsel appearing for respondent No.3 and learned HCGP appearing for State.
4. It is contention of Sri.Diwakara.K., learned counsel appearing for petitioner that complaint has been lodged belatedly i.e. after one day of the incident and no explanation whatsoever is forthcoming and even otherwise, charge-sheet material does not disclose any offence committed by accused that too for the offences punishable under Sections 353 and 204 of IPC. He would also submit that list of inventory accounts book impounded under Section 133A(3) of the Act, does not disclose about Page-107 alleged to have been swallowed by the petitioner and not find a place in the inventory and contends that petitioner has been falsely implicated. He would also submit that petitioner has not been subjected to any medical examination/radiological evaluation to ascertain the existence of swallowed material and the lacuna in the prosecution case is writ large and even assuming the material placed on record by the prosecution is taken to its logical end, would not end in conviction of the petitioner. As such he prays for quashing of the proceedings. He would also submit that in the order relating to assessment year 2016-2017 it does not reflect about any alleged incriminating material i.e. paper page No.107 alleged to have been swallowed by petitioner finding a reference and as such, he prays for quashing of the proceedings.
5. Per contra, Sri.E.I.Sanmathi, learned counsel appearing for respondent No.3-Income Tax Department would support the case of the prosecution and contends that prima-facie material on hand would disclose the offence alleged against petitioner and the assessment order of 2016-17 relied upon by the petitioner is not related to the Company which was surveyed and as such he prays for rejection of the petition by reiterating the contents of the affidavit filed by the Income Tax Officer of the jurisdictional ward in which business premises of petitioner is the assessee.
6. Having heard the learned advocates appearing for parties and on perusal of the records and after bestowing my anxious and careful consideration to the rival contentions raised at the bar, it would emerge there from that, undisputedly, survey proceedings under Section 133A of the Income Tax Act was conducted in the premises of M/s.A-one Steels India Private Limited on 09.11.2015 by the Officers of the Income Tax Department by entering the said premise at about 3.15 pm. The facts narrated in the petition as well was grounds urged in support of the prayer sought for by the petitioner would also disclose that till survey proceedings was coming to an end on 10.11.2015 at 2.30 am, there is no dispute about the procedure adopted by the department or in other words, there is no serious attack in that regard. Be that as it may. The issue revolves around in this petition is relating to a purported sheet of page No.107 of the folder numbered A-3/AOSI/133A having been swallowed by petitioner in the presence of Income Tax Authorities or its officials.
7. The Company in which survey was conducted under Section 133A of the Act was in respect of M/s.A-One Steels India Private Limited for the assessment year 2015-2016 and assessment is yet to be framed by the Jurisdictional Officers. The assessment order which has been relied upon by the petitioner is relating to “M/s.A-one Steels and Alloys Private Limited” and not relating to “M/s.A-One Steels India Private Limited”. In fact jurisdictional Income Tax Officer has clearly stated that assessment of the said Company-M/s.A-One Steels India Private Limited is not yet concluded and as such, the only irresistible conclusion which can be drawn would be, assessment order for the assessment year 2016-17 produced would not have any bearing in so far as M/s.A-One Steels India Private Limited is concerned or in so far as present proceedings are concerned, except petitioner being the Director of both the Companies. Hence, contention raised by learned counsel Sri.Diwakar.K., in that regard cannot be accepted and it stands rejected.
8. The jurisdictional Income Tax Officer has categorically stated in paragraph-6 of his affidavit dated 05.03.2019 that he has received reports from DDIT (Investigation), Bengaluru with regard to survey conducted in the case of petitioner on 04.01.2017, whereby on the basis of the incriminating material found during the course of the survey, certain income is said to have been escaped for assessment in the hands of the petitioner and others. The sheets which came to be impounded, according to the prosecution, page No.107 alleged to have been swallowed by the petitioner during the survey proceedings is missing.
9. While considering the prayer for quashing the criminal proceedings, this Court would examine as to whether the complaint would disclose any offence or the allegations made in the complaint is so frivolous and vexatious, it would not serve any fruitful purpose if it is taken to its logical end or it would be an abuse of process of law and as such said proceedings is to be quashed or not. If the allegations set out in the complaint do not constitute any offence which has been alleged by prosecution and on which cognizance has been taken by the jurisdictional Court, then such proceedings are liable to be quashed. At this stage, it would not be necessary that there should be meticulous analysis of all the material to be examined or in other words microscopic examination of the material would be called for. To put it differently a mini trial will not be held at this stage. However, if it appears by a reading of the complaint and the allegations made therein that ingredients of the offence are disclosed, then there would be no justification for this Court to interfere in quashing the proceedings.
10. Though Mr.Diwakara.K, learned counsel appearing for petitioner would make an attempt to butter his arguments, contending that witnesses who are supporting the case of the prosecution are all Official witnesses and as such there being no independent witness about the factum of swallowing of sheet at the time of survey proceedings. At this stage this Court would not be in a position to express its opinion with regard to the evidentiary value of the prosecution witnesses which may prejudice rights of the parties. Hence, it would be appropriate and safe to desist for expressing any opinion in this regard. Defence that may be available or facts which would establish during the trial may lead to acquittal or not the grounds for quashing of the complaint at the threshold. At this stage, the only question which would arise for consideration is: whether averments made in the complaint spell out the ingredients of the criminal offence or not? In this background, the complaint in question if perused it would clearly disclose that allegations made in the complaint is for trying to destroy the evidence and obstructing public authorities to discharge their duties. There cannot be any dispute to the fact that officials of the Income Tax Department in exercise of the provisions under Section 133A of Income Tax Act, 1961 would be empowered to enter any place within the limits of the Area assigned to such Offices, any place kept by any persons in respect of whom he exercises the jurisdiction, any place in respect of which he authorizes for the purpose of under Section 133A of the Act and area within which such place is situated and such person is occupied such place inclusive of business or professional place and required any proprietor/ employee or any other person who may at the time and place be attending or helping in carrying on business or profession. (2) afford for such officials by facility to inspect the books of accounts or other documents available at such place, check or verify the cash, stock or other available articles or furnish such information as may be required which may be useful for a relevant to any proceeding under the Act, having been carried out by the officials of the Income Tax Department at 09.11.2015 at 3.15 pm and at the time of concluding survey proceedings on 10.11.2015 at 2.30 am, petitioner herein is alleged to have taken out page No.107 containing some notings from the folder numbered as A-3/AOSI/133A from one of the folder which had been impounded and swallowed it in the presence of the authorities. It is for the prosecution to prove the alleged incident during the course of the trial and as such it cannot be held that complaint does not disclose the prima-facie offences which is lodged against the petitioner. Correctness or otherwise of said allegations has to be decided only in the trial. In that view of the matter, this Court finds there is no good ground to entertain this petition. Hence, it stands rejected.
11. It is made clear that any opinion expressed by this Court during the course of this order is limited for the purpose of the consideration of the prayer for quashing of the proceedings and trial Court shall not be influenced by there observations and it shall independently evaluate the evidence that may be tendered and proceed to decide the matter in accordance with law and on its merit.
SD/- JUDGE SB