Income Tax Officer v. T. V. Rajamanickam — 1996 DIGILAW 410 (MAD)

Judgment :- M. KARPAGAVINAYAGAM J. By consent of parties, all these four appeals have been taken up together for final disposal, as the issue involved in all these appeals and the arguments advanced are one and the same All these appeals have been preferred by the Income-tax Officer, Circle I(1), Salem, against the judgments dated July 10, 1986, of the learned Additional Chief Metropolitan Magistrate (Economic Offences II), Egmore, Madras 8, acquitting T. V. Rajamanickam (the accused in E.O.C.C. Nos. 1343, 1344 of 1983 and 812 of 1984), and R. Dhanabagyam (accused in E. O. C. C. No. 1361 of 1983), in respect of the charges under sections 193, 420 and 471 of the Indian Penal Code, and sections 277 and 276C(1) of the Income-tax Act Originally in EOCC No. 1344 of 1983, T. V. Rajamanickam was tried along with another accused, M. Srinivasan, the 2nd respondent in C. A. No. 23 of 1987, herein, who is reported to be dead, while the batch of appeals pending against him and the same in C. A. Nos. 24 etc., of 1987 were dismissed by this court by order dated June 29, 1995, as having abated. Accordingly, Criminal Appeal No. 23 of 1987 against the 2nd respondent, viz., M. Srinivasan is also dismissed as having abated C. A. Nos. 22, 23 and 32 of 1987 were filed against the said T. V. Rajamanickam and C. A. No. 30 of 1987, was filed against the said R. Dhanabagyam. EOCC No. 1343 of 1983, relates to T. Vinayatha Mudaliar and Sons and Co., Salem. EOCC No. 1344 of 1983 relates to T. Vinayatha Mudaliar and Sons. 22, 23 and 32 of 1987 were filed against the said T. V. Rajamanickam and C. A. No. 30 of 1987, was filed against the said R. Dhanabagyam. EOCC No. 1343 of 1983, relates to T. Vinayatha Mudaliar and Sons and Co., Salem. EOCC No. 1344 of 1983 relates to T. Vinayatha Mudaliar and Sons. EOCC No. 1361 of 1983, relates to National Hotel, Salem, and EOCC No. 812 of 1984, to Sri Venkateswara Weaving and Sizing Mills, Salem The trial court has framed charges against the accused on the allegations that the respective accused, being the partners of the respective company/firm, filed declarations under section 184(7) of the Income-tax Act, a return of income and statement, etc., relating to the respective firm for the assessment year 1979-80 and in so far as EOCC No. 1343 of 1983 is concerned for the assessment year 1980-81 also and acted in collusion and conspiracy with a view to deceive the Income-tax Officer and to evade income-tax by fraudulently getting the benefit of continuation of registration of the firm, fabricated false evidence, forged the signatures of the other partners, thereby dishonestly induced the Income-tax Officer to act on the fabricated and forged declarations, and thereby punishable under the relevant sections as referred to aboveFour separate trials were conducted by the court below. In EOCC No. 1343 of 1983, on the side of the prosecution P.Ws.-1 to 9 were examined and exhibits P-1 to P-54 were marked. In EOCC No. 1344 of 1983, 9 witnesses were examined and 32 exhibits were marked on the side of the prosecution. In EOCC No. 1361 of 1983, 12 witnesses were examined and 50 exhibits were marked for the prosecution. In EOCC No. 812 of 1984, 9 witnesses were examined and 29 exhibits were marked on behalf of the prosecution. In all the four cases, D.Ws.-1 and 2 were examined on the side of the defence One Thangavel Mudaliar (hereinafter referred to as P.W.-1) was examined as P.W.-1 in EOCC Nos. 1343, 1344 of 1983, as P.W.-6 in EOCC Nos. 1351, 1343 and 1344 of 1983 and as P. W.-4 in EOCC No. 812 of 1984. One Chellamal (hereinafter referred to as PW2) was examined as P. W.-2 in EOCC Nos. 1343, 1344 and 1351 of 1983 and as P.W.-1 in EOCC No. 812 of 1984. 1343, 1344 of 1983, as P.W.-6 in EOCC Nos. 1351, 1343 and 1344 of 1983 and as P. W.-4 in EOCC No. 812 of 1984. One Chellamal (hereinafter referred to as PW2) was examined as P. W.-2 in EOCC Nos. 1343, 1344 and 1351 of 1983 and as P.W.-1 in EOCC No. 812 of 1984. One Sundaram (hereinafter referred to as P.W.-3) was examined as P.W. 3 in EOCC Nos. 1343 and 1344 of 1983, as P.W.-4 in EOCC No. 1351 of 1983 and P.W.-2 in EOCC No. 812 of 1984. One Palanisamy Mudaliar (hereinafter referred to as P.W.-4), was examined as P.W.-4 in EOCC Nos. 1343 and 1344 of 1983, as P.W. 5-in EOCC No. 1351 of 1983 and as P. W.-3 in EOCC No. 812 of 1984. One Menon, Kupusami Nair, Vaidyanathan and Manonmani Raja (hereinafter referred to as P.Ws.- 5 to 9 respectively) were examined as P.Ws.-5 to 9 in EOCC Nos. 1343 and 1344 of 1983, and EOCC No. 812 of 1984 and as P.Ws.-8 to 12 in EOCC No. 1351 of 1983 respectively. One Mohanraj and Chandrasekaran were examined as P.Ws.-1 and 7 in EOCC No. 1351 of 1983, respectively The short facts can be summarised as follows One Ellappa Mudaliar who was a partner in all the four firms referred to earlier, is the husband of P.W. 2 Chellammal. He died on April 10, 1979. After his death, difference of opinion developed among the partners. At that stage, a panchayat was held to settle the disputes among the partners. In the panchayat, the accused asked the other respective partners, viz., P.Ws.-1 and 2, and the said Mohanraj, through the panchayatars to put the signatures in Forms Nos. 11, 11-A and 12 to file the declaration to the Income-tax Officer for the assessment year 1979-80 and as, stated earlier in so far as T. Vinayatha Mudaliar and Sons and Co., Salem, was concerned, for the assessment year 1980-81 also. However, they refused to sign the same. But, subsequently, the other partners came to know that the respective accused/respondent filed Form No. 12 with their forged signatures. Since they have not actually put their signatures, they sent petitions to the income-tax authorities, complaining against the concerned accused. Then, the Income-tax Officer examined P.Ws. However, they refused to sign the same. But, subsequently, the other partners came to know that the respective accused/respondent filed Form No. 12 with their forged signatures. Since they have not actually put their signatures, they sent petitions to the income-tax authorities, complaining against the concerned accused. Then, the Income-tax Officer examined P.Ws. 1 and 2 and Mohanraj, who stated that the signatures found on those forms were not put by them and thereafter the Income-tax Officer examined P.Ws. 3 and 4, the panchayatars who stated that in the panchayat the request of the accused to put their signatures in the form was not acceded to by P.Ws.-1 and 2 and MohanrajP.W.-6, Kuppusami, Inspecting Assistant Commissioner of Income-tax, examined P.W.-5, Menon, Income-tax Officer also, who received the declaration in Form No. 12. P.W.-8 Vaidyanathan, Assistant Director of Inspection, Income-tax Department, sent the genuine signatures subsequently obtained from the partners and the suspected signatures of the partners found in Form No. 12 to the Director of Forensic Laboratory, for examination. P.W.-9, Manonmani Raja, the Assistant Director of Forensic Science Department, sent the report that the signatures found in Form No. 12 did not tally with the accepted signatures of the partners, who disputed their signatures, in Form No. 12. P.W.-7, Nair, the concerned Income-tax Officer, gave a statement, on receipt of the reports from the handwriting expert, that it was noticed that some of the partners' signatures were not genuine and, therefore, the firms were treated as unregistered firms and if the registration is not granted, the concessional rate will not be applicable to the firms On the side of the defence, one S. P. Sambandam and V. S. Varadarajan were examined as D.Ws.-1 and 2. D.W.1 Sambandam, was one of the panchayatars, who settled the dispute that arose between the family members of the accused and P.Ws.-1 and 2. D.W.1 Sambandam, was one of the panchayatars, who settled the dispute that arose between the family members of the accused and P.Ws.-1 and 2. He stated that the accused never asked for subscribing the signatures of P.Ws.-1 and 2 in the income-tax forms, D.W.-2, Varadarajan, is the auditor of all the four firms in question, who has stated that as an auditor he used to send Form No. 12 for being signed by the partners by post or through messenger and after receipt of the forms sent by the partners duly signed, he used to send the same under a covering letter to the Income-tax Officer by post or through messenger After the evidence was over, the accused were examined under section 313, Criminal Procedure Code, to explain the incriminating circumstances found against them, and they denied having participated in the crime and further stated that the evidence of the prosecution witnesses was not correct and that there was enmity between their families and the family of other partners and that signatures of other partners were not asked for by them in the panchayat and that in order to harass the accused, false cases have been foisted against themOn appraisal of the evidence, oral and documentary, adduced on either side, the trial court acquitted the accused, holding that the prosecution was not able to prove the ingredients of the offences, with which the accused were charged. Aggrieved over the similar findings in the above four judgments, the present appeals have been preferred by the Income-tax Officer, Circle I(1), Salem Mr. Ramaswamy, learned counsel for the appellant, took me through the entire evidence and contended that while the prosecution was able to establish that the signatures found in Form No. 12 of the respective firms were not those of P.Ws.-1, 2 and Mohanraj and as such they are forged signatures and such being the case when the forms were presented by the respective accused alone and since the accused alone will be getting the concessional rate of income-tax, it must be presumed that the accused alone committed forgery of signatures, fabricated false documents and by filing the same induced the Income-tax Officer to pass a wrong assessment order. He also contended that admittedly there was dispute among the partners and the evidence of the panchayatars, viz., P.Ws.-3 and 4, would clearly establish that the accused concerned, requested the signatures of other partners in the presence of panchayatars, which was in vain, and that from the above evidence, it could be inferred that the accused alone had forged the signatures and filed it before the income-tax authorities, and thereby the ingredients of the offences are clearly proved. The nutshell of the contentions made by learned counsel for the appellant is that the finding given by the court below is wrong and liable to be set aside I heard Mr. Jothiraman, learned counsel for the respondents/accused, who also equally showed vehemence in his submissions, by referring to various reasonings given by the learned Additional Chief Metropolitan Magistrate, Madras, and pointing out vital contradictions found in the evidence of the prosecution witnesses. He also submitted that the evidence of D.Ws.-1 and 2 would make it clear, that the accused never asked for the signatures of other partners before the panchayatars and the practice prevailing in the firms is that forms will be sent to the partners for their signatures through post and on receipt of the duly signed forms sent by the concerned partners, the auditor in charge of the firms will in turn send it to the income-tax authorities. On this factual position, the trial court has made an elaborate discussion and come to the correct conclusion, acquitting the accused and, therefore, the view taken by the trial court need not be interfered withI have gone through the evidence and other records, while analysing the submissions made by learned counsel appearing for both the sides. The accusation levelled by the complainant is that the accused wilfully filed false returns, containing forged signatures of partners, thereby dishonestly inducing the Income-tax Officer to pass assessment orders. It cannot be disputed that the prosecution has established through the evidence of P.Ws.-1, 2 and 9, that the disputed signatures found in Form No. 12 are not genuine, but only forged. It is also not in dispute that the returns in Form No. 12 were filed by the accused concerned. It cannot be disputed that the prosecution has established through the evidence of P.Ws.-1, 2 and 9, that the disputed signatures found in Form No. 12 are not genuine, but only forged. It is also not in dispute that the returns in Form No. 12 were filed by the accused concerned. But the main questions that arise for consideration in these appeals are who has actually forged the signatures in question, whether knowledge can be attributed against the accused at the time of presentation of the forms before the Income-tax Officer, whether the accused has got the dishonest intention to induce the officer to pass wrong assessment orders, and whether the accused has the knowledge that the contents of the returns are false To answer these questions, some portions of the evidence of the prosecution as well as the defence have to be taken note of. P.W.-1, Thangavel Mudaliar, himself admits in his cross-examination that one other partner by name Srinivasan (2nd respondent in C. A. No. 23 of 1987) and other clerks obtained the signatures of the partners in cheques and in income-tax return forms and it was the practice for the past so many years. As has been stated earlier, the said Srinivasan, an accused, died during the pendency of the appeal. Even according to the evidence of P.W.-1, there is no material whatever available against the accused in these cases, referring to their involvement in the process of getting signatures from the other partners. The same fact was admitted by P.W.- 2, Chellammal, also. P.W. 4, Palanisamy Mudaliar, one of the panchayatars also did not implicate the accused. He only deposed that Srinivasan presented a petition to the panchayatars complaining that Ellappa Mudaliar refused to sign Forms Nos. 11, 11-A and 12 and requested the panchayatars to direct him to sign the forms. He also stated in his evidence that Srinivasan gave a letter requesting the panchayatars to obtain signatures of P.W.-1, Thangavel Mudaliar, and Mohanraj, who has been examined as P.W.-1 in EOCC No. 1351 of 1983 in the income-tax return forms. Nowhere in the evidence of these witnesses, the reference about the accused, viz., T. V. Rajamanikam and R. Dhanabagyam, is available, in making an attempt to get the signatures from the other partnersIn the light of the admission made by P.Ws.-1 to 3, the evidence of D.W.-1 becomes very relevant. Nowhere in the evidence of these witnesses, the reference about the accused, viz., T. V. Rajamanikam and R. Dhanabagyam, is available, in making an attempt to get the signatures from the other partnersIn the light of the admission made by P.Ws.-1 to 3, the evidence of D.W.-1 becomes very relevant. D.W.-1, S. P. Sambandam, says that the accused never asked for the signatures of the other partners in the income-tax return forms in the panchayat. D.W.-2, V. S. Varadarajan, a chartered accountant, specifically deposed that he used to send the forms to all the partners for signature through post and on receipt of the forms duly signed by the partners he alone sent the same to the income-tax authorities by post or through messengers. A close scrutiny of the evidence adduced by these defence witnesses as well as the witnesses of the prosecution, would lead to the conclusion, that there is no material to show that the accused had committed forgery, fabricated false document and by filing the same with dishonest intention induced the Income-tax Officer to pass the wrong assessment orders It is important to note that it is for the prosecution to establish positively that the disputed signatures found in Form No. 12 are in the handwriting of the respective accused or at least to prove that these signatures were made at the instance of the accused. Merely because there are some circumstances to show that the accused would be the beneficiaries, it cannot be contended that the accused alone had forged the signatures of other partners. Unless the prosecution has let in evidence that the accused had knowledge about the forgery of the signatures, the accused could not be said to have committed the said offences. It is also not proved by the prosecution, that the accused alone had actually presented the forms before the income-tax authorities. Even assuming that it has been done by the accused, in the absence of any material to show the knowledge and dishonest intention of the accused, it is not sufficient to hold that the accused had perpetrated the abovesaid crimes. In fact, there is nothing on record to connect the accused with the offence of forgery. Even assuming that it has been done by the accused, in the absence of any material to show the knowledge and dishonest intention of the accused, it is not sufficient to hold that the accused had perpetrated the abovesaid crimes. In fact, there is nothing on record to connect the accused with the offence of forgery. The suspicion that the accused could have forged and could have presented the forms with the knowledge and could have dishonestly induced the Income-tax Officer, to get the assessment order passed, has no substance, because in a criminal case, the onus is not on the accused to prove his innocence, but it is always with the prosecution to prove the guilt of the accused. Therefore, the main ingredients, viz., the intention or mens rea or a wilful act with the knowledge that the contents of the documents are false is lacking in these cases. Unless the prosecution establishes that it is the accused, who signed the names of other partners or the names have been written at the instance of the accused, the accused could not be said to be the culprit. The reasonings given by the trial court are well merited. I see no reason to interfere with the sameThese four appeals, which have no merits are liable to be dismissed. Accordingly, all the appeals are dismissed.