Law: Income Tax Act, 1922

Section: 37(4)

Section 136 of the Income-tax Act, 1961 [Corresponding to section 37(4) of the Indian Income-tax Act, 1922], read with section 193 of Indian Penal Code, 1860, and section 195 of the Code of Civil Procedure, 1898 - Proceedings before income tax authorities to be judicial proceedings - Whether section 37(4) of 1922 Act makes proceedings before ITO judicial proceedings under section 193 of Indian Penal Code and these judicial proceedings must be treated as "proceedings in any Court" for purpose of section 195(1)(b) of Code of Criminal Procedure - Held, yes FACTS The appellant and respondent No. 2, were businessman and they carried on their business in Jamnagar and Bombay respectively. They had known each other for several years past in the course of their ordinary business activities. In the Income-tax assessment proceedings of the appellant for the assessment years 1949-50 and 1950-51 respondent No. 2 gave evidence on oath before the ITO, Jamnagar, on 4-12-1958. In his evidence he denied that he had a son named N and that he had done any business in the name of N and Co. at Jamnagar. According to the appellant, the said statements were false to the knowledge of respondent No. 2 and were made by him to mislead the ITO and to avoid the incidence of income-tax on himself. As a result of the said false statements, the appellant was heavily taxed. On 24-11-1959, the appellant filed a criminal complaint against respondent No. 2 under section 193 of the Indian Penal Code, in the court of the Presidency Magistrate. At the hearing of the said complaint, respondent No. 2 raised a preliminary objection that the Magistrate could not take cognizance of the said complaint, because the proceedings in which he was alleged to have made a false statement on oath were proceedings before a Court within the meaning of section 195(1)(b) of the Code of Criminal Procedure and since no complaint in writing had been made by the Court of the ITO before which the said proceedings were conducted, the provisions of section 195(1)(b) of Code of Criminal Procedure created a bar against the competence of the appellant's complaint. The Presidency Magistrate held that the ITO was not a Court…

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