Proceedings before Income-tax authorities to be judicial proceedings

136. Any proceeding under this Act before an Income-tax authority shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purposes of section 196 of the Indian Penal Code.

We all know that proceedings in Income Tax Department are not at par with proceedings of Civil Courts. But to some extant these proceedings contains feature of Judicial Proceedings and as a consequence Tax Authorities have privileges and responsibilities casted on judicial authorities. They are bound to follow principal of Naturial Justice while observing enactment in quasi judicial capacity at the same time they have been protected by section 193, 228 and 196 of the Indian Penal Code. Section 193 of Indian Penal Code says that if any person presents false evidence in front of court he shall be punishable with Imprisonment which may extend 7 Years and shall also be liable to fine, and whoever intentionally gives or fabricates false evidence in any other case, shall be punished with imprisonment of either de­scription for a term which may extend to three years, and shall also be liable to fine.. Now coming on to Section 271(1)(C) and 277A which sound similar to this provision needs discussion herewith. Section 271(1)(c) is related with inaccurate particulars of Income (Prior to 01.04.2006 this was Income). While Section 277A penalty is related with making or causing to be made any false entry or statement with an intent to evade any tax or interest or penalty chargeable under Income Tax Act 1961. It is very evident that these three provisions are different and provided with different objects in enactment. Section 193 of Indian Penal Code is very wide in it’s impact and cover each and every evidence presented in front of tax authorities.

Section 228 Whoever intentionally offers any insult, or causes any interruption to any public servant, while such public servant is sitting in any stage of a judicial proceeding, shall be punished with simple imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. Vide section 136 of Income Tax Act, 1961 Section 228 of Indian Penal Code also applies to Income Tax Authorities as it applies to civil court. Debendra Nath Maitra v. Emperor, 52 Cal WN 336, wherein A. N. Sen, J. has held that in order to constitute an offence under Section 228 Indian Penal Code, the insult or interruption must be intentional and that the offence of contempt as envisaged under Section 228 Indian Penal Code is a peculiar one and the court should be extremely careful when convicting persons of this offence to satisfy itself that there was any intentional insult or interruption.

Section 196 Using evidence known to be false.—Whoever corruptly uses or attempts to use as true or genuine evidence any evidence which he knows to be false or fabricated, shall be punished in the same manner as if he gave or fabricated false evidence.

The other facet of the submission hinges on the embargo of section 195(1)(b)(i) of the Code of Criminal Procedure, 1973, which reads as follows :

195. (1) No court shall take cognizance. – …

(b) (i) of any offence punishable under any of the following sections of the Indian Penal Code (45 of 1860), namely, sections 193 to 196 (both inclusive), 199, 200, 205 to 211 (both inclusive) and 228, when such offence is alleged to have been committed in, or in relation to, any proceedings in any court. . except on the complaint in writing of that court, or of some other court to which that court is subordinate.”

In Basir-ul-Huq v. State of West Bengal in which it was held that, if the allegations made in a false report disclose two distinct offences, one against a public servant and the other against a private individual, the latter is not debarred by the provisions of section 195,Criminal Procedure Code from seeking redress for the offence committed against him.

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