Sunday, 22 November 2015

Procedure to be followed by plaintiff for proving Income Tax documents

Insofar as the income tax returns of the first defendant are concerned, there has been a prohibition contained in the provisions of the Income Tax Act for producing those documents by the Department. The proper procedure in such cases seems to be to issue notice to be first defendant to file the income tax returns and if the first defendant fails to file them, the plaintiffs can either lead secondary evidence by obtaining the certified copies thereof from the Department if granted or request the Court to draw the necessary adverse inference for non-production of the documents by the first defendant despite the notice. It is not the case of any discovery as regards the existence of the documents and the need to inspect those documents so as to shorten the litigation. It is a matter where trial process was on and has been going on. For the above reasons, that part of the impugned order allowing the petition in part directing the first defendant to produce the bank statements, accounts, etc. is liable to be set aside. Dismissal of the petition insofar as the income tax returns are concerned, cannot be found fault with for the reasons hereinabove discussed, but that will not preclude the plaintiffs to follow the procedure envisaged as per the provisions contained in Sections 66 and 162 to 165 of the Act.
Andhra High Court
Rajesh Bhatia And Ors. vs G. Parimala And Anr. on 30 November, 2005
Equivalent citations: 2006 (3) ALD 415, 2006 (3) ALT 129

Bench: T C Rao

1. Inasmuch as both these revision petitions emanate from a common order dated 20-12-2004 passed by the learned VIII Additional Senior Civil Judge (Fast Track Court) City Civil Court, Hyderabad, in I.A. No. 250 of 2004 in O.S. No. 35 of 2002, they can be disposed of together.
2. Briefly stated, the facts are thus:
The plaintiffs filed the suit for recovery of an amount of Rs. 3,83,0007- from the defendants 1 and 2. The case of the plaintiffs was that on the request of the first defendant the plaintiffs handed over the original sale deed dated 30-08-1993 and the fixed deposit receipts worth Rs. 3,83,0007- to her and her husband C.S. Sudhir Kumar. Plaintiffs used to receive interest amount of Rs. 3,5007- from the second defendant-bank on the above fixed deposits till May, 2001. However, without any reason whatsoever the second defendant-bank stopped suddenly from the month of June 2001 the payment of interest. On enquiry, the plaintiffs came to know that these fixed deposit receipts were given to the bank on hypothecation by the first defendant, who availed credit facilities and bank guarantee. When the bank guarantee was revoked by Andhra Bank, the second defendant-bank closed the above said F.D.Rs. prematurely without giving any notice to the plaintiffs and adjusted the amounts covered by those receipts against the revocation of bank guarantee taken by the first defendant. Questioning the highhanded act of both the defendants, the plaintiffs filed the suit for realization of the amounts covered by the fixed deposits.
3. The case of the first defendant was that the first plaintiff on whom the first defendant reposed confidence misappropriated certain funds by committing fraud in the first defendant's firm. The amount thus misappropriated was invested under various fixed deposit receipts. Therefore, the plaintiff had no locus stand! to claim the amounts covered by the said fixed deposit receipts.

4. During the course of trial in the suit, the plaintiff filed I.A. No. 250 of 2004 under Order 11, Rule 14 of the Code of Civil Procedure (for brevity 'the Code') requesting the Court to direct the first defendant to submit the income tax returns for the period 1995-1996 to 2001-2002; the audit balance sheet; profit and loss account; details of capital account; the statement of bank account of M/s Aar Bee Enterprises for the period 1995-1996 to 2001-2002 bearing Current Account No. 3434; O.D. Account No. 6125 and O.D. Account No. 6187 with Vijaya Bank, Bank Street Branch, Hyderabad; and Current Account No. 3583 in the A.P. Mahesh Co-operative Urban Bank Limited, Sultan Bazar, Hyderabad on the premise that they are relevant for proper adjudication of the case. Earlier a notice was served upon the counsel for the first defendant requiring him to submit all the abovementioned records and when the first defendant failed to produce those documents they filed the petition.
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