Emphasising that the taxpayer (petitioner) had claimed a refund on the basis of a forged document and had furnished no valid explanation or reasons, the Jharkhand High Court (Ranchi Bench) has held that illiteracy or being a rustic villager is no excuse for making false disclosures in an Income Tax Return. Since the petitioner had willingly and deliberately filed a false statement to claim the refund, his conduct squarely attracted Section 277 of the Income Tax Act.
Accordingly, the petitioner’s bail bond was cancelled, and he was directed to surrender before the concerned Trial Court within two months from the date of the judgment to undergo the remaining period of sentence.
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A Single Judge Bench of Justice Pradeep Kumar Srivastava noted that the complainant, Chandra Prakash Bhatia (Income Tax Officer), had clearly established that the TDS Certificate (Form-16) filed by the petitioner was forged, as confirmed by the Senior Accounts Officer’s enquiry, and that Bank of India confirmed there was no housing loan account in the petitioner’s name. Further, Sudhir Kumar Ganguli, the then Branch Manager of Bank of India, deposed that Housing Loan Account No. 1230 did not exist in his branch, and proved the letter issued under his signature.
The Bench also extracted Section 278E of the Income Tax Act dealing with presumption as to culpable mental state, and noted that the Court shall presume the existence of culpable mental state, which includes intention, motive, or knowledge, and the burden lies on the accused to rebut it, which the petitioner failed to discharge.
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Briefly, the permanent employee of Mugma Area Eastern Coalfield Limited (a subsidiary of Coal India Limited), Sashi Bhusan Prasad Bhuian, filed his Income Tax Return declaring an annual income of Rs. 1.72 lakhs along with a TDS Certificate purportedly issued by his employer, and claimed a refund of Rs. 35,875/- on account of an alleged housing loan exemption. Upon enquiry, it was found that the TDS Certificate had not been issued by Mugma Colliery, and no housing loan had been sanctioned by any bank in favour of the petitioner.
When issued a show cause notice, the petitioner claimed he was uneducated and had entrusted the filing to an office clerk, Satyaban Roy, without his instructions, and denied having claimed any refund. A complaint was accordingly lodged under Section 277 of the Income Tax Act, and after trial before the Special Judge (Economic Offences), Dhanbad, the petitioner was convicted and sentenced to Rigorous Imprisonment of one year with a fine of Rs. 5,000/-. His appeal before the Additional Sessions Judge-II, Dhanbad was dismissed, upholding the conviction.
