The facts of the case were as follows. The appellant was convicted by chief judicial magistrate and sentenced to undergo six months' RI and fine on a complaint that he had made incorrect verification on the income-tax return for the assessment year 1980-81. The appellant appealed to the sessions judge who, vide his judgment dated October 7, 1988, concluded that the appellant was entitled to the benefit of doubt and accordingly acquitted him of charges levelled against him.

The judge ruled that the charges were not only vague, but said theevidence was insufficient to infer the criminal intent of the accused and there was nothing on record to pinpoint the veracity or falsity of entries in the books on which the entire prosecution case was sought to be founded upon.

The sessions judge also took into account the appeal filed by the accused-assessee in respect of the relevant assessment year was partly allowed by the commissioner of income tax (appeals) and came to the conclusion that the prosecution had failed to prove the guilt of the accused beyond reasonable doubt. The high court, however, in the impugned judgment re-apprised the evidence of income-tax officer and in view of the presumption available under section 132(4A) of the Income-tax Act reversed the order of acquittal.

In the Supreme Court it was contended on behalf of the appellant that the high court is required to examine the reasons on which the order of acquittal if it was satisfied that the view taken by the acquitting judge was clearly unreasonable. It was further contendedthat penalty proceeding in question having ended in favour of the assessee-accused on a conclusion that additions made in the assessment was purely on a basis of difference of opinion between assessee and to, there has not been a case of concealment of income or furnishing of inaccurate particulars of income, the high court committed serious error in interfering with the order of acquittal.

The learned counsel appearing for the respondent contended that the criminal proceeding was wholly independent of the penalty proceedings under the Income-tax Act and therefore a conviction in criminal proceedings cannot be interfered on the basis of findings of the appellate authority or the tribunal in a penalty proceedings.

After consideration of rival contentions, the Supreme Court stated that "it is well-settled by a catena of decisions of this court that the court will not interfere with an order of acquittal solely because a different plausible view may arise on the evidence and the court thinks that the viewtaken by the trial court of the evidence is not correct."

It is also well-settled that the court of appeal must examine the reasons on which an order of acquittal is based and must reach the conclusion that the view taken by the acquitting judge was clearly unreasonable. Further if the evaluation of evidence made by courts below while recording an order of acquittal does not suffer from an illegality or manifest error, and the grounds on which the order of acquittal was based was not unreasonable then high court should not disturb the order of acquittal. Bearing in mind these principles, the Supreme Court observed that the high court has not considered the reasons and grounds advanced by the sessions judge while recording an order of acquittal and by merely relying upon the presumption arising out of section 132(4A) of the act, reversed the order of acquittal without reversing the findings arrived at by the sessions judge on the evidence of record.

To attract the provisions of section 276(c) of the I-TAct, the prosecution has to establish that the accused willfully attempted to evade tax. Similarly, to attract provisions of section 277 the prosecution is required to establish that the accused made a statement in verification under the act which he either knows or believes it to be false or does not believe it to be true. The Supreme Court examined in detail the the provisions of sections 276(c), 277, 132 and 132(4A) of the I-t Act. The Supreme Court observed that applying the presumption under section 132(4A) are not sufficient to establish the ingredients of the offence under sections 276(c) and 277 of the Income-tax Act. Willful attempt to evade any tax penalty or interest chargeable or impossible under the act under section 276(c) is a positive act on the part of the accused which is required to be proved to bring home the charge against the accused. Necessary mens rea is required to be established by prosecution to attract provisions of section 277.

There is nothing in section 132(4A) which wouldestablish the ingredients of the aforesaid two criminal offences contemplated under sections 276(c) and 277 of Income-tax Act. The Supreme Court noted that tribunal came to positive finding that it is a case of difference of opinion as to the estimates and not case of concealment of income or even furnishing of inaccurate particulars of income. The Supreme Court held that high court was totally in error in interfering with the order of acquittal passed by the sessions judge by an elaborate and well-reasoned judgment and that the ingredients of offence under sections 276(c) and 277 of the Income-tax Act have not been established by prosecution beyond reasonable doubt and therefore appellant cannot be convicted of offence under the said sections.

The Supreme Court held that bearing in mind the legislative intent engrafted under section 279(1)A) of the Income-tax Act and the conclusion of the sessions judges on appreciation of evidence not having been reversed by the high court and the grounds of acquittalpassed by the sessions judge not having been examined by the high court, it had no hesitation to come to the conclusion that the high court was not justified in interfering with an order of acquittal.

The Supreme Court set aside the impugned order of the high court and acquitted the appellant of charges levelled against him. The order of acquittal passed by the sessions judge was affirmed by the Supreme Court.

The author is a chartered accountant