Allowed

Shri Subhash Hastimal Lodha . v. Union of India .

Bombay HC11 Aug 2008WP/1335/2000

Case brief

AI extract

What is this about?

The High Court allowed the criminal writ petition, holding that statements recorded under section 132(4) of the Income Tax Act, 1961 are limited to seeking explanation about things found during search. The Court found the power to examine on oath only existed within the four corners of section 132(4) and not for general investigation of assets. Therefore, the section 181 and 193 IPC charges were q

What did the court decide?

The charge of commission of offences under section 181 and section 193 read with section 191 of the Indian Penal Code against the Petitioner was quashed.

Shri Subhash Hastimal Lodha . Vs Union… — Constitutional and Fundamental Rights | Bombay HC (2008)

¶1

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL WRIT PETITION NO.1335 OF 2000.

¶2

Shri Subhash Hastimal Lodha.

¶3

..Petitioner.

¶4

versus

¶5

The Union of India.

¶6

The State of Maharashtra.

¶7

..Respondents.

¶8

Mr. V.P.Sawant, with Prabhakar Jadhav i/b. Mr.Y.R. Mehta, for the Petitioner. Mr. H.V.Mehta, for the Respondent No.1. Mr. D.P.Adsule, APP, for the Respondent-State.

¶9

CORAM : A.S. OKA, J. DATE : 11TH AUGUST,2008.

¶10

ORAL JUDGMENT :

¶11

1.		Heard	the learned C	ounsel appearin	g for the
parties.		The	Petition	er has	filed this Petition	for
quashing	and	settin	g aside	the	order dated 17th	April
1998	passe	d	by the	learned	Judicial Magistrate	First
Class,	Pune	by	which	the Petiti	oner was charged	for
commission		of	offences	punishable	under section	181

¶12

and section 193 read with section 191 of the Indian

¶13

Penal Code.

¶14

2.			With	a view	to appreciate the	submis	sions
made	by		the	lear	ned Co	unsel	app	earing	for	the
parties,		it	will	be	necessary	to	refer	to	the	facts
of	the		case	in	brief. On	26th	Sept	ember	1988,	the

¶15

¶16

Commissioner of Income Tax, Pune issued a	warrant
authorising the complainant and other officers	of
Income Tax Department to search the residential	and
business premises of the Petitioner. On	27th
September 1988, the Complainant and other officers	of
the Income Tax Department carried out the search.	It
is stated that the search commenced at 12.05 p.m.	on
27th September 1988 and the same was closed at	2.30
a.m. on 28th September 1988. This was the	search
taken in the business premises of the Petitioner.	On
27th September 1988, a search of the re	sidential
premises of the Petitioner was commenced at 9.15	p.m.
and the same was closed at about 2.10 a.m on	28th
September 1988. On 27th September 1988 from	9.15
p.m. the statement of the Petitioner under	section
132(4) of the Income Tax Act, 1961 (he	reinafter
referred to as "the said Act of 1961") was r	ecorded
till about 2.10 a.m. on 28th September 1988.	In
response to a question during recording of the	said
statement, the Petitioner disclosed of having	two
bank lockers and stated that apart from the	two
disclosed bank lockers, there were no	lockers
standing in his name. According to the case of	the
complainant, on 28th September 1988, the officers	of
the Income Tax Department discovered that	the

¶17

¶18

Petitioner was possessing a third	locker	.	Therefore,
an order passed under section 279	(1) of	the sai	d Act
of 1961 on 28th March 1989	directing	the	concerned
Assistant Commissioner of	Income	Tax	(the
Complainant) to file a	complaint	against	the
Petitioner. Accordingly, the	said	Complainant	filed
a complaint in the Court	of Ju	dicial M	agistrate,
First Class, Pune, alleging	commission	of	offences
punishable under section 181	and	section	193
(Part-II) read with section 191	of the	Indian	Penal
Code. The learned Magistrate	framed a	charge	against
the Petitioner for offence pun	ishable	under	section
193 read with section 191 of	the Indi	an Penal	Code
alleging that a false statement	was m	ade by	the
Petitioner in his statement under	section	132(4)	of
the said Act of 1961. The	Petitio	ner was	also
charged under section 181 of the	Indian	Penal Co	de by
alleging that though the Petitione	r was	legally	bound
by an oath to state the truth,	he ma	de a	statement
that he was possessing only two	lockers	which he	knew
was false. A Revision Applicatio	n was	filed by	the
Petitioner before the Sessions	Court	against	the
order dated 17th April 1998.	By order	dated	24th

¶19

July 2000, the said Revision Application was rejected.

¶20

¶21

The learned Counsel appearing for the

¶22

Petitioner	submi	tted that the object of	th	e	statement
under	section	132(4) of the said Act of	196	1 is	of
seeking	an	explanation or information in	res	pect	of
the	docume	nts, articles, things, etc.	found		during
the se	arch.	He submitted that any reply	give	n	by the
Assessee	to	any general question will not	be	a	part
of	the	statement of the assessee	recor	ded	under
section	132(4)	of the said Act of 1961.		He	submitted
that	in the	facts of the case even acc	ording	to	the
case	of	the complainant, the third	locke	r	maintained
by	the	Petitioner was allegedly found		after	the
search	was	over and after the state	ment	of	the
Petitioner	und	er section 132(4) of the	said	Act	of
1961	was	recorded. He placed reliance	on	a	decision
of	the lear	ned Single Judge of this Court	in	a	case
of	Income	Tax Officer v/s Smt. Sharba	noo	Hasa	n Daya
and	Another	[ 1986 (2) Bom.C.R.P.293 ].		He	also
placed	relian	ce on the judgment of a	learne	d	Single
Judge	in the	case of State of Maharashtra	v/s	.	Ashok
Nandlal	Kela	and Others [1998 Bom. C.	R	.	(Cri.)

¶23

426]. He, therefore, submitted that no offence was

¶24

made out against the Petitioner.

¶25

¶26

The learned Counsel appearing for the

¶27

Respondent supported the impugned orders and submitted that a false statement was made on oath by

¶28

the Petitioner. He, therefore, submitted that no

¶29

interference was called for.

¶30

I have considered the submissions. A true

¶31

copy of t	he stat	ement of the P	etitioner	r	ecorded
under section	132(4) of	the said Act an	nexed	to	the
Petition shows	that	the recording of	the	st	atement
commenced at	9.15 p.m	on 27th September	1988	and	the
recording was c	oncluded	at 2.10 a.m on	28th	Se	ptember
1988. Even	according	to the case of	the	Comp	lainant,
the search was	completed	early in the	morning	on	28th
September 1988.	In	the complaint	filed	by	the
Complainant it	is	specifically	averred		that
subsequent to	the reco	rding of the state	ment	of	the
Petitioner, local	inquiries	were made by	the		Income
Tax Department	and it	was found that	the	P	etitioner
was possessing	one	more bank locker.	Relia	nce	has
been placed by	the pro	secution on the	answer	given	by
the Petitioner	in resp	onse to question	no.3.		The

¶32

original question and answer are in Marathi. The

¶33

English translation of the same reads thus :-

¶34

¶35

" Q.3 :- State - What are the contents in each

¶36

locker standing in the name of all the

¶37

persons in your house ?

¶38

Answer :- There is a Locker No.18 in the

¶39

State Bank of India, Market Yard Branch Pune 37 in the joint name of myself and my wife Mrs.Sulabha Lodha. All the articles in this locker were brought home by taking out the same from the locker in front of Shri Sheladkar and inspection thereof was made there. Besides that, there is a locker No.119 in Rupee Co-op. Bank, Chinchwad Branch in the joint name of myself and my wife Sulabha Lodha. All the articles were also removed from this locker in front of Shri Sheladekar and were brought home and examination thereof was made there. Besides these lockers, there is no any bank locker in my name or in the name of my family members."

¶40

In the case of Smt. Sharbanoo Hasan Daya (supra), this Court considered section 132(4) as it existed prior to amendment carried out with effect from 1st April 1989 by the Direct Tax Laws

¶41

¶42

(Amendment) Act, 1987. After considering the object

¶43

of section 132(4), the learned Single Judge held thus

¶44

¶45

"I am	of	the view that the officer	was
empowered to	ex	amine the accused on	Oath
during the co	urse	of search only in the	event
the accused	was	found in possession	or
control of	the	things mentioned in	the
section. It	is	not disputed that	her
impugned st	atement	was recorded at 6.30	p.m.
i.e., before		the search com	menced.
Therefore, I	am	in agreement with Shri	Vakil
that the	comp	lainant has exceeded	his
authority unde	r	the provisions of the	said
section by	putti	ng certain questions to	the
accused befo	re	commencing the	search.
Moreover, this	power	of examining her on	Oath
could have	been	exercised by him within	the
four corners	of	section 132(4) and	not
otherwise.	To	my mind the powers c	onferred
by section 13	2(4)	of Income-Tax Act have	been
misused in	the	present case. The power	to
interrogate on		Oath conferred by	section
132(4) is	not	for the purposes of	general

¶46

¶47

investigation	of	th	e assets,	but	for	the
limited	purpose	of	seeking	explanation,	on	or
information	in	res	pect of	the	doc	uments,
articles,	things,		found du	ring the		search.
Thus	the	authorise	d officer	has a		limited
power to	make	enquir	ies on	Oath in	respect	of
his fi	ndings	from	the search	and he	is	not
authorised	to	put	quest	ions in		general.
Therefore,	the	im	pugned state	ment is	not	a
statement	on	Oath	during	the	proc	eedings
within	the m	eaning	of section	134(4)	of	the
Act."			(Emphasis			added)

¶48

The decision of the learned Single Judge has

¶49

been affirmed by the Apex Court in a Special Leave Petition.

¶50

This controversy was again dealt within the

¶51

case in Ashok Nandlal Kela and Others (supra). After

¶52

considering the aforesaid decision of this Court, the

¶53

learned Single Judge held thus :-

¶54

" The Income Tax Officer has admitted that before commencement of search, he has recorded the statements of the respondents on

¶55

¶56

oath and therefore, the statements are not recorded during the course of search. As held in the aforesaid case, the complainants exceeded his authority under the provisions of the said section by putting questions to the respondents before commencement of search. The power of examining the respondents on oath could have been exercised by him within the four corners of section 132 sub-section (4) of the Act and not otherwise. The power to interrogate on oath is conferred by section 132(4) is not for the purpose of general investigation of the assets, but for the limited purpose of seeking explanation or information in respect of documents, articles, or things found during the search. The offence punishable under section 181 of I.P.C. is also covered inasmuch as it is necessary that the person must be authorised by law to administer oath or affirmation and if oath is so administered, such person is legally bound by such oath or affirmation and if he makes a false statement which he knows or believes to be false then he is liable to be punished. As already pointed out above,

¶57

10 -

¶58

the	search had admitt	edly not	com	menced	and
therefore,	the Income-T	ax Officer		could	not
exercise	the power	of	e	xamining	the
respondent	on oath	under sect	ion	132(4)	of
the I	ndian Income-Tax	Act and	as	such	the
respondents	have not	committed		offence	either
under	section 181 of	the I.P.C.		or	under
section	191 r/w. 19	3 I.P.C.		and that	being
so,	the learned Mag	istrate was		justified	in
passing	the impugn	ed order	for	di	scharge."
(Emphasis					added)

¶59

9.	In t	he present	case, only after the search
was	completed,	it	was revealed that the	Petitioner
was	allegedly po	ssessing	the third locker. The	power
of	examining	the Pe	titioner on oath could have	been
exercised	only	within	the four corners of	sub-section
(4)	of section	132	of the said Act. While	recording
the	statement	un	der section 132(4), the	Petitioner
could	have	been	interrogated by the Respondent	for
recording	the	explana	tion in respect of books	of
accounts,	docum	ents,	money, bullion, Jewllery	and
other	valuable	articles	which were found during	the
search.	Howev	er,	putting general questions	for
general	investiga	tion	of assets is not	permissible

¶60

11 -

¶61

under section 132(4) of the said Act. Therefore, the statement of the Petitioner that besides the two lockers he was not holding any other locker cannot be

¶62

a statement on oath in proceeding under section

¶63

132(4) of the said Act.

¶64

In the present case, even going by the order

¶65

under section 279 (1) of the said Act, the third locker was found only after the search was completed. The amended provisions of the said Act cannot be considered as the amendment came into force long after the search. In the statement under section 132(4) of the said Act, the Petitioner was under no obligation to state that he was not possessing any other locker besides the two lockers found during the search. Therefore, the offence under section 181 and

¶66

consequently under section 193 are not at all

¶67

attracted.

¶68

Hence, the Petition must succeed and rule is

¶69

made absolute in terms of prayer clause (b1).

¶70

[ A.S.OKA, J.]

Shri Subhash Hastimal Lodha . v. Union of India .

Case brief

What is this about?

What did the court decide?

Shri Subhash Hastimal Lodha . v. Union of India .

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Waman Hari Patil Vs Special Land Acquistion Officer

Devyani H.Dave Vs the State of Maharashtra and Anr.

Anil C. Divate Vs Karuna Raman Patel and Ors.

Kamal Singh Sokhi Vs Kirloskar Investment and Finance Limited and Anr.

M/S. Incorporated Daub Verhoeven Ltd. and Ors. Vs Abdul Rashid Adam and Anr.

Master Computech Pvt. Ltd. Vs the State of Maharashtra and Ors.