2016 Supreme(SC) 677

SUPREME COURT OF INDIA
PINAKI CHANDRA GHOSE, AMITAVA ROY, JJ.
BABITA LILA & ANOTHER – APPELLANTS
VERSUS
UNION OF INDIA – RESPONDENT
CRIMINAL APPEAL NO.824 OF 2016 [ARISING OUT OF S.L.P. (CRL) NO. 1474 OF 2012]
Decided On : 31-08-2016

IMPORTANT POINTS
The Deputy Director of Income Tax (Investigation)-I Bhopal, (M.P.) cannot be construed to be an authority to whom appeal would ordinarily lie from the decisions/orders of the I.T.Os. involved in the search proceedings so as to empower him to lodge the complaint in view of the restrictive preconditions imposed by Section 195 of the Code.
Concept of cause of action as identifiable with a civil action is not routinely relevant for criminal cases.
Section 116 of Income Tax Act places Deputy Commissioner of Income Tax and the Deputy Commissioner of Income Tax (Appeals) at par. However section 246 confers appellate power only on Deputy Commissioner of Income Tax (Appeals). This omission cannot be said to be accidental or unintended
When single and combined search operation was undertaken simultaneously both two places for the same purpose, the offence can be tried by competent courts at both places.

Headnote:(a) Income Tax Act, 1961 – Section 37(4) r/w Sections 195(1)(b), Code of Criminal Procedure, 1973 and section 195 IPC – Search conducted by Income Tax Officer u/s 37(4) is judicial proceeding within the meaning of section 195 IPC and "any proceeding in any court" in terms of Section 195(1)(b), CrPC. (Para 37, 38)

       1956 SCR 125; 1964 (6) SCR 700; (2007) 2 SCC 181 – Relied upon

       (b) Code of Criminal Procedure, 1973 – Section 195 – Provisions of Section 195 are mandatory – Non-compliance thereof would vitiate the prosecution and all consequential orders. (Para 46)

       (2010) 9 SCC 567; (1998) 2 SCC 493 – Relied upon

       (c) Code of Criminal Procedure, 1973 – Section 195(4) – Requiring complaint to be filed by authority having appellate jurisdiction – Section 116 of Income Tax Act declares assistant Directors/Assistant Commissioners senior to Income Tax Officers – Merely the levels of the rank inter se are not the decisive and peremptory prescription of Section 195(4) but the recognised appellate jurisdiction ordinarily exercised by the authority concerned for a complaint to be validly lodged by it. (Para 52)

       (d) Income Tax Act, 1961 – Section 246(1) and 246A – Only the Deputy Commissioner (Appeals) conferred with appellate jurisdiction to entertain appeals from orders passed by an assessing officer. (Para 56)

       (e) Words and phrases – "Ordinarily" – Denotes developments likely to occur, exist or ensue in regular or normal course of events as logically and rationally anticipated even though not set out or expressed in categorical terms – A compendious expression to encompass all events reasonably expected to occur in the usual and common course of occurrences and are expected to so happen unless prohibited, prevented or directed by some express and unexpected interventions to the contrary. (Para 60)

       (f) Income Tax Act, 1961 – Section 246 – Sub-section stating decisions appealable to or decision of Deputy Commissioner (Appeals) – Provision silent about decisions than those specified in sub-section (1) – Does not mean that Deputy Director of Income Tax can be recognized as appellate forum – That would amount to judicial legislation – Unwarranted. (Para 62, 64)

       (2008) 306 ITR 277 (SC); (2015) 9 SCC 209; (2015) 3 SCC 353 Relied upon

       (1978) 1 All ER 948 (HL) – Referred

       (g) Income Tax Act, 1961 – Section 246 and 116 – Section 116 placing Deputy Commissioner of Income Tax and the Deputy Commissioner of Income Tax (Appeals) at par – However section 246 conferring appellate power only on Deputy Commissioner of Income Tax (Appeals) – This omission cannot be accidental or unintended – Therefore, Deputy Director of Income Tax cannot be construed to an authority before whom an appeal from any order/decision of any income tax authority, lower in rank would ordinarily lie – Casus omissus. (Para 66, 67)

       (h) Territorial jurisdiction – Cause of action – Concept as identifiable with a civil action – Not routinely relevant for criminal cases. (Para 74)

       (2014) 9 SCC 129 – Relied upon

       (i) Code of Criminal Procedure, 1973 – Sections 177,178 and 179 – Single and combined search operation undertaken simultaneously both at Bhopal and Aurangabad for the same purpose – The offence can be tried by competent courts at both places. (Para 75)

       (2004) 8 SCC 100; (2008) 11 SCC 103 – Distinguished

       Facts of the case:

       The appellants, who are husband and wife, are residents of both Bhopal and Aurangabad. A search operation was conducted by the authorities under the Income Tax Act, 1961 on 28.10.2010 at both the residences of the appellants, in course whereof their statements were recorded on oath under Section 131 of the Act. On a query made by the authorities, it is alleged that they made false statements denying of having any locker either in individual names or jointly in any bank. It later transpired that they did have a safe deposit locker with the Axis Bank (formerly known as UTI Bank) at Aurangabad which they had also operated on 30.10.2010. The search at Aurangabad was conducted by the Income Tax Officer, Nashik and Income Tax Officer, Dhule and the statements of the appellants were also recorded at Aurangabad.

       Based on the revelation that the appellants, on the date of the search, did have one locker as aforementioned and that their statements to the contrary were false and misleading, a complaint was filed 109/191/193/196/200/420/120B/34 IPC by the Deputy Director of Income Tax (Investigation)-I, Bhopal (M.P.) on 30.5.2011 in the court of the Chief Judicial Magistrate, Bhopal, (M.P.) and the same was registered as R.T. No. 5171 of 2011.

       The Trial Court on 9.6.2011, took note of the offences imputed and issued process against the appellants.

       The appellants impugned this order of the Trial Court before the High Court under Section 482 Cr.P.C. and sought annulment thereof.

       The High Court has declined to interfere.

       Finding of the Court:

       The Deputy Director of Income Tax (Investigation)-I Bhopal, (M.P.) cannot be construed to be an authority to whom appeal would ordinarily lie from the decisions/orders of the I.T.Os. involved in the search proceedings so as to empower him to lodge the complaint in view of the restrictive preconditions imposed by Section 195 of the Code. The complaint filed by the Deputy Director of Income Tax, (Investigation)-I, Bhopal (M.P.), thus has to be held as incompetent.

       Result: Appeal allowed.