Perusal of the above table reveals that the respondent has
preferred these complaints on the very same material, evidence and documents and allegations in all the three complaints are to a large extent quite same. The petitioner is, thus, facing three separate trials in all the three complaints before the same Magistrate for not declaring the fact of having a foreign account to the Income Tax Authorities. {Para 15}
16. The ingredients of Section 220 of Cr.P.C. have been defined in
Chandni Srivastava Vs. CBI & Ors. decided on 9th Feb., 2016 in
W.P.(CRL) 3486/2018 & Crl.M.A. 47373/2018 Page no.15 of 17
WP(Crl.) 743/2013 in which it was held that Sec. 220 of the Cr.P.C. permits of one trial even if many offences are committed, if such offences form part of the same transaction, the rationale for such an exception being that in such circumstances, separate trials may lead to conflicting judgments.
17. In ‘Mohan Baitha vs. State of Bihar, AIR 2001 SC 1490’, the
Supreme Court interpreted Section 220 of the Code and observed as
under:-
"It may be noticed that under Section 220 of the
Code of Criminal Procedure, offences more than
one committed by the same persons could be tried
at one trial, if they can be held to be in one series
of acts, so as to form the same transaction. The
expression "same transaction" from its very nature
is incapable of an exact definition. It is not
intended to be interpreted in any artificial or
technical sense. Common sense and the ordinary
use of language must decide whether on the facts
of a particular case, it can be held to be in one
transaction. It is not possible to enunciate any
comprehensive formula of universal application
for the purpose of determining whether two or
more acts constitute the same transaction. But the
circumstances of a given case indicating proximity
of time, unity or proximity of place, continuity of
action and community of purpose or design are the
factors for deciding whether certain acts form parts
of the same transaction or not. Therefore, a series
of acts whether are so connected together as to
form the same transaction is purely a question of
fact to be decided on the aforesaid criteria".
18. The broad test, therefore, for ascertaining whether offences
charged form part of the same transaction is whether the other set of offences, even though distinct and separate, have been committed for facilitating the commission of the main offence. If the offences alleged involve similar persons and there is a hint of continuity of action, it is then part of the same transaction. Thus, if the substratum of the series of acts is common, then those acts do constitute same transaction.
19. As discussed above, the three complaints in fact are a part of the same transaction. The first complaint has been filed on the assumption that petitioner is holding an undisclosed foreign account and two subsequent complaints are nothing but to arrive at a figure to meet the ingredients of the first offence. The chart given above reveals that the allegations, documents and nature of evidence are same in all the three complaints. In these circumstances, it will be in the interest of justice to have a common trial for all the three complaints.
IN THE HIGH COURT OF DELHI AT NEW DELHI
Pronounced on: November 24th, 2020
W.P.(CRL) 3486/2018 & Crl.M.A. 47373/2018
PARAMINDER SINGH KALRA Vs THE COMMISSIONER, INCOME TAX
CORAM: HON'BLE MR. JUSTICE BRIJESH SETHI
1. The petitioner is said to be the Director/EEO of one M/S
Consortium Securities Pvt. Ltd. On 28th July, 2011 the respondent/
department conducted a search on the premises of petitioner on the
allegation that an information was received from the Government of
France that petitioner is having an account in HSBC Bank, Zurich,
Switzerland with the mala fide intention to evade tax and to hide
money transactions.
2. The respondent/department preferred a criminal complaint being
CC No.511538/16 (Old CC No.131/2014), under Section 276-D of the Income Tax Act on 28th February, 2015 against the petitioner. The respondent/ department also preferred two separate criminal
complaints under Section 276-C (1) and Section 277 of the Income
Tax Act being CC No. 528982/16 (Old CC No.157/4) and CC
No.528983/16 (Old CC No.158/4) on 12th January, 2016. In this
petition, the stand of the petitioner is that the respondent/department
has preferred these complaints on the very same material, evidence,
witnesses and documents and the allegation in all the three complaints are to a large extent word to word same.
3. The petitioner is facing three separate trials in all the three
complaints before the same Magistrate for allegedly not declaring the
fact of having a foreign account to the Income Tax authorities, though the material and evidence relied upon by the respondent/department is similar in all the three complaints. Petitioner stated that he had filed an
application before the learned Magistrate for clubbing of the three
complaints and joint trial, which was rejected by the learned
Magistrate on 30th June, 2018 while observing as under:-
“7. Keeping foreign funds for number of years
might be part of same transaction but not
declaring the same in the Income Tax file for each
specific year under prosecution is a distinct
offence. Each instance of filing of income tax
return without disclosing foreign funds is a
separate and different act and same cannot held in
part of same transaction.
8. In the present case I am of the opinion that
the test of each offences being part of same
transaction fails. As in the present case the
accusations are for evasion of income tax for the
different assessment years or for false statement
given on oath before the income tax authorities.
9. Accordingly, in my humble opinion, no
prejudice would be caused to the accused if he is
tried in the separate complaints.”
4. Vide this petition, petitioner is seeking quashing of the aforesaid
order of 30th June, 2018 passed by the learned Magistrate on the
ground that petitioner cannot be subjected to several criminal
prosecutions for the same offence on the basis of same material,
evidence and list of witnesses under the same enactment merely on the
basis that the financial years of the complaints are different. It is
submitted on behalf of the petitioner that the filing of three different
complaints by the respondent/Department is abuse of process of law
and is in contravention of Article 20(2) of the Constitution of India,
Section 71 of IPC, Section 300 of Cr.P.C and Section 26 of General
Clauses Act.
5. It is averred on behalf of the petitioner that first the existence of
the alleged foreign account for funding of amount from India has to be proved and only thereafter the other two complaints, which are based on mere assumption of petitioner having a foreign account funded
from India, have to follow. It is stated that such an assumption has to
be dealt with in one complaint instead of all the three complaints and
in case the respondent/department fails to prove that the petitioner has suppressed holding of a foreign account or the income, the subsequent complaints shall cease to exist, for which petitioner has been forced to undergo trial.
6. It is urged on behalf of the petitioner that the learned trial court
in para-7 of the impugned order dated 30th June, 2018 has returned the finding that each instance of filing of income tax return without
disclosing foreign funds is a separate and different act and same cannot form part of same transaction, which is an erroneous conclusion inasmuch as that in the very same paragraph the learned trial court has concluded that keeping of foreign funds for number of years is part of
the same transaction. It is stated that filing of income tax returns for
each financial year cannot give rise to a separate cause of action for
filing prosecution for each financial year, particularly when the core
allegation is of keeping a foreign account, which the court itself
concluded to be part of the same transaction.
7. It was submitted on behalf of the petitioner that the respondent
has not been able to distinguish between 'assessment proceedings' and the 'prosecution proceedings'. The assessment proceedings are
conducted by an Assessment Officer as designated under the Income
Tax Act while an "offence" is triable by a Court of Law. Assessment
proceedings conducted by competent authority known as Assessment
Officer as defined u/s 2(7A) is an assessment for the purposes of
calculating/assessing any tax or any other sum of money payable under
the Income Tax Act, be it interest or penalty."Tax" is defined u/s 2(43)
of Income tax Act to mean as income tax chargeable in any
Assessment Year and subsequent years under the provisions of Income
Tax Act, which may be of one year or spread over to several years.
Such "tax" does not include "interest" or "penalty". Interest is defined under section 2(28A) of Income Tax. There can be prosecution only for payable interest or penalty or tax, as stipulated u/s 276C of Income
Tax Act. Assessment proceedings are dealt under separate chapters of
Income Tax Act whereas penalties imposable are dealt under Chapter
XXI of Income Tax Act from sections 270 to 275 of the said Act.
Learned counsel for the petitioner, therefore, submitted that importing
the concept of "Assessment Year" into the definitions of "offences"
triable by Special Courts is reading something in the definition which
does not exists and which is contrary to constitutional safeguards and
criminal jurisprudence.
8. It was submitted on behalf of the petitioner that it is laid down in
law that if different cases are filed on same cause of action, 'Doctrine
of Issue Estoppel' prevents second prosecution on the same sets of
facts for which a person could be prosecuted. The petitioner relied
upon decision of Hon’ble Apex Court in State of ‘Andhra Pradesh vs.
Cheemalapati Ganeswara Rao & Anr., 1964 (3) SCR 297’ and a
decision dated 9th February, 2016 of a Coordinate Bench Of this Court
in ‘Chandni Srivastava Vs. CBI & Ors.’ to submit that allowing of
several complaints on same cause of action would lead to reappreciation of evidence several times on one issue of fact which is
against the principle of "Doctrine of Issue Estoppel". Hence, dismissal
of impugned order of 30th June, 2018 passed by the learned trial court
is sought and it is prayed that a common trial in all the three
complaints be conducted.
9. On the other hand, respondent /department has alleged that
during search proceedings on 28th July, 2011, the petitioner in his
statement had admitted of having an undeclared account in HSBC
Bank, Zurich, Switzerland and disclosed the entire modus operandi of
opening the account with the help of an introducer, one Charlie with
the mala fide intention to evade tax. It is the stand of respondent that
during the financial year 2006-07, notices dated 9th May, 2013 and 15th July, 2013, under Sections 142(1) of the Income Tax Act, 1961
(henceforth referred to as the “Act”) were issued to the petitioner to
furnish the details of the foreign accounts held by him. In addition, he was also asked to provide consent letter to procure details from HSBC bank, Zurich, Switzerland. Since the petitioner failed to respond to the aforesaid, notice under Section 274 r/w Section 271 of the Act was issued for non compliance of Section 142(1) of the Act, which is punishable with rigorous imprisonment for a term upto one year under section 276D of the Act. It is alleged that the petitioner did not disclose the foreign bank account in return of income and balance appearing in the said foreign account was also not taken into account in his balance
sheet and thus, the petitioner made a "willful attempt to evade income
tax" thereby committed substantive offence under section 276C(1) of
the Act for which the he is liable to be prosecuted u/s 276C(1) of the
Income Tax Act for both the assessment years i.e. A.Y. 2006-07 and
A.Y. 2007-08. Besides, the petitioner is also alleged to have committed
the offence under Section 277 of I.T. Act for making a false statement/
false verification in the respective returns of income for both the
assessment years 2006-07 and 2007-08. Resultantly, criminal
complaint C.C. No. 511538/16, under Section 276D of the Act for the
assessment year 2006-07 was preferred by the respondent/department
against the petitioner. In addition, two separate criminal complaints
C.C. Nos. 528983/16 and 528982/16 for the assessment years 2006-07
and 2007-08, u/s 276C(1) and 277 of the Act were preferred by the
respondent/department.
10. It was further submitted on behalf of respondent/department that
no illegality has been committed by the department by filing three
different complaints, as the offence committed in each complaint is
separate and distinct. Attention of this Court was drawn to the
provisions of Sections 276C, 276D and 277 of the Income Tax Act.
11. Learned counsel for respondent/department submitted that
every assessment year is separate and distinct year under the
provisions of the Income Tax Act. The proceeding under the Act
initiates with filing of return by the assessee and culminates at framing of assessment order (including the appellate proceedings) determining the correct tax liability of an assessee and recovery of pursuant demand arising thereto. The offence under Section 276C of the Act can only be in respect of particular assessment year alone as the quantum of sentence depends upon the amount of tax, penalty or
interest sought to be evaded. Similarly, the offence under Section 277
of the Act is also assessment year specific, as the misdeclaration or
furnishing of false account or statement is assessment year specific
and such misdeclaration etc. are committed while the assessee files the return for a particular assessment year or during the course of
assessment proceedings of a particular assessment year. Depending
upon the nature of offences committed, there can be more than one
offence in respect of any particular assessment year for which separate
complaint can be preferred within the same assessment year also.
12. Learned counsel for respondent/department further submitted
that Section 276D of the Act provides for punishment for failing to
comply with the notice under Section 142(1) of the Act or failing to
produce within the time specified such accounts or documents as are
referred in the notice under section 142(1) and for each default, a
separate complaint can be instituted by the department, which in the
instant case was instituted for the assessment year 2006-07. It was
further submitted on behalf of respondent that by not taking into
account the transactions in the said foreign bank account in his return
of income and by not taking into account the balance appearing in the said foreign bank account in his balance sheet, petitioner had
committed the offence under section 277 of the Act by making false
statement/ false verification in the respective returns of income for
both the assessment years 2006-07 and 2007-08. Therefore, separate
criminal complaints C.C. Nos. 528982/16 and 528983/16 for
assessment years 2006-07 and 2007-08 u/s 276C(1) and u/s. 277 of the
Act was preferred by the Department. Learned counsel pointed out that
as per the provisions of Code of Criminal Procedure, the offence under
Section 256D of I.T. Act is a summons triable offence and Sections
276C and 277 I.T. Act are warrant triable cases and these cannot be
tried together. It is also pointed out that Section 220 Cr. P.C is an
exception to section 218 Cr.P.C. which provides for one trial for every such offence if these are a part of the same transaction. It was
submitted that offence under Section 276C I.T. Act and Section 277
I.T. Act are premised on different transactions in the said undisclosed
foreign account and non disclosure thereof in the income tax returns
for different assessment years. It was stated that these transactions are not part of same transaction warranting joint trial under Section 220 Cr.P.C and thus, this petition deserves dismissal.
13. I have heard the rival submissions made by learned counsel for
the parties and gone through the material placed on record. The genesis
of trial of three petitions before the trial court is the complaint bearing
CC No.511538/16 (Old CC No.131/2014), under Section 276-D of the
Income Tax Act dated 28th February, 2015 and the other two
complaints rest on the same. Whether the petitioner is holding a
foreign account or not is a matter of trial in the first complaint and the assumption that he holds an undisclosed foreign account, which forms basis of other two complaints, is also subject matter of trial.
14. The following chart will reveal that facts and evidence are the
same in all the complaints.
S.No.
CC No. 511538/16
(Old No. 131/4)
CC No. 528982/16 (Old
No. 157/4)
CC No. 528983/16 (Old
No. 158/4)
1. Information received
from the Government
of France in 2011
under Double Tax
Avoidance
Convention with India
revealed that certain
Indian including
accused, held or were
beneficial owners of
bank account(s) with
HSBC, Switzerland.
That information received
from the Government of
France in 2011 under
double tax avoidance
convention with India
revealed that certain Indians
including the accused, held
or were beneficial owners
of Bank account(s) with
HSBC, Switzerland. The
information/documents
received, contained the
personal information of the
accused viz. his name,
address, nationality, date of
birth, place of birth,
profession, place of office,
passport no. etc. The
documents also contained
details of the entities which
were held by the accused as
trustee viz. ‘Nine on Ten
Foundation’ and “Burnfield
Invest SA’ etc.
That information
received from the
Government of France in
2011 under double tax
avoidance convention
with India revealed that
certain Indians including
the accused, held or were
beneficial owners of
Bank account(s) with
HSBC, Switzerland. The
information/documents
received, contained the
personal information of
the accused viz. his
name, address,
nationality, date of birth,
place of birth, profession
placed of office, passport
no. etc. the documents
also contained details of
the entities which were
held by the accused as
trustee viz. “Nine on Ten
Foundation’ and
Burnfield Invest SA’ etc.
2. That a search action
was carried out
on28.07.2011 at the
residence of the
accused, A-29 Friends
Colony (East), New
Delhi.
That a search action was
carried out on 28.07.2011 at
the residence of the
accused, A-29 Friends
Colony (East), New Delhi.
That a search action was
carried out on
28.07.2011 at the
residence of the accused,
A-29 Friends Colony
(East), New Delhi.
3. During the search
proceedings statement
of the accused was
recorded on oath, in
which he had written
all the answers in his
own handwriting. On
the basis of
information received
regarding his account
with HSBC Bank,
Zurich he was
questioned about his
foreign bank
accounts. He
admitted that he had
opened a bank
account with HSBC
Bank, Zurich,
Switzerland in
December 2002, when
visited there. ….
…He further said that
the account is not into
existence as on today
and should have been
That during the search
proceedings statement u/s
132(4) of the I.T. Act dated
28.07.2011 of the accused
was recorded on oath, in
which he had written
answers to question 5 to 34
in his own handwriting.
On the basis of information
received regarding his
account with HSBC Bank,
Zurich he was questioned
about his foreign bank
accounts. He admitted that
he had opened a bank
account with HSBC Bank,
Zurich, Switzerland in 2002
when he visited there….
…He further said that the
account is not into existence
as on today and should have
been closed. He further
stated that the said bank
account with HSBC Bank
was not disclosed in his
return of income.
That during the search
proceedings statement
u/s 132(4) of the I.T. Act
dated 28.07.2011 of the
accused was recorded on
oath, in which he had
written answers to
question 5 to 34 in his
own handwriting. On
the basis of information
received regarding his
account with HSBC
Bank, Zurich he was
questioned about his
foreign bank accounts.
H admitted that he had
opened a bank account
with HSBC Bank,
Zurich, Switzerland in
2002 when he visited
there…..
…He further said that the
account is not into
existence as on today and
should have been closed.
He further stated that the
closed. He further
stated that the said
bank account with
HSBC Bank was not
disclosed in his return
of income. Regarding
mode of operation he
submitted that he used
to give cash on the
instruction of the
introducer at Delhi,
who arrange to
deposit the same in
his bank account at
Zurich. He further
stated that he has
given at Delhi in the
year 2002 amount
ranging from Rs. 2-5
crores.
Regarding mode of
operation he submitted that
he used to give cash on the
instruction of the introducer
at Delhi, who arrange to
deposit the same in his bank
account at Zurich/ he has
further stated that he had
given at Delhi in the year
2002 amount ranging from
Rs. 2-5 crores.
said bank account with
HSBC Bank was not
disclosed in his return of
income. Regarding
mode of operation he
submitted that he used to
give cash on the
instruction of the
introducer at Delhi, who
arrange to deposit the
same in his bank account
at Zurich. He has further
stated that he had given
at Delhi in the year 2002
amount ranging from Rs.
2-5 Crores.
15. Perusal of the above table reveals that the respondent has
preferred these complaints on the very same material, evidence and
documents and allegations in all the three complaints are to a large
extent quite same. The petitioner is, thus, facing three separate trials in all the three complaints before the same Magistrate for not declaring the fact of having a foreign account to the Income Tax Authorities.
16. The ingredients of Section 220 of Cr.P.C. have been defined in
Chandni Srivastava Vs. CBI & Ors. decided on 9th Feb., 2016 in
W.P.(CRL) 3486/2018 & Crl.M.A. 47373/2018 Page no.15 of 17
WP(Crl.) 743/2013 in which it was held that Sec. 220 of the Cr.P.C.
permits of one trial even if many offences are committed, if such
offences form part of the same transaction, the rationale for such an
exception being that in such circumstances, separate trials may lead to conflicting judgments.
17. In ‘Mohan Baitha vs. State of Bihar, AIR 2001 SC 1490’, the
Supreme Court interpreted Section 220 of the Code and observed as
under:-
"It may be noticed that under Section 220 of the
Code of Criminal Procedure, offences more than
one committed by the same persons could be tried
at one trial, if they can be held to be in one series
of acts, so as to form the same transaction. The
expression "same transaction" from its very nature
is incapable of an exact definition. It is not
intended to be interpreted in any artificial or
technical sense. Common sense and the ordinary
use of language must decide whether on the facts
of a particular case, it can be held to be in one
transaction. It is not possible to enunciate any
comprehensive formula of universal application
for the purpose of determining whether two or
more acts constitute the same transaction. But the
circumstances of a given case indicating proximity
of time, unity or proximity of place, continuity of
action and community of purpose or design are the
factors for deciding whether certain acts form parts
of the same transaction or not. Therefore, a series
of acts whether are so connected together as to
form the same transaction is purely a question of
fact to be decided on the aforesaid criteria".
18. The broad test, therefore, for ascertaining whether offences
charged form part of the same transaction is whether the other set of offences, even though distinct and separate, have been committed for
facilitating the commission of the main offence. If the offences alleged involve similar persons and there is a hint of continuity of action, it is then part of the same transaction. Thus, if the substratum of the series of acts is common, then those acts do constitute same transaction.
19. As discussed above, the three complaints in fact are a part of the
same transaction. The first complaint has been filed on the assumption that petitioner is holding an undisclosed foreign account and two subsequent complaints are nothing but to arrive at a figure to meet the ingredients of the first offence. The chart given above reveals that the allegations, documents and nature of evidence are same in all the three complaints. In these circumstances, it will be in the interest of justice to have a common trial for all the three complaints.
20. In view of the above discussion, this petition is allowed. The
order dated 30th June, 2018 passed by the Ld. Trial Court rejecting the
application of the petitioner for clubbing of the three complaints and
joint trial is set aside. Vide order dated 25th February, 2020,
proceedings before the learned Trial Court were directed to be stayed.
The stay order stands vacated. It is now directed that common trial in
CC No.511538/16 (Old CC No.131/2014), under Section 276-D of the
Income Tax Act dated 28th February, 2015; CC No.528982/16 (Old CC
No.157/4) and CC No.528983/16 (Old CC No,158/4) dated 12th
January, 2016, under Section 276-C (1) and Section 277 of the Income
Tax Act shall take place before the court concerned.
21. With aforesaid directions, this petition along with pending
application, is disposed of.
22. The order be uploaded on the website of this Court forthwith.
BRIJESH SETHI, J
NOVEMBER 24th, 2020
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