Wednesday, 7 April 2021

Under which circumstances court can permit the consolidation of criminal cases?

  Perusal of the above table reveals that the respondent has

preferred these complaints on the very same material, evidence and documents and allegations in all the three complaints are to a large extent quite same. The petitioner is, thus, facing three separate trials in all the three complaints before the same Magistrate for not declaring the fact of having a foreign account to the Income Tax Authorities. {Para 15} 

16. The ingredients of Section 220 of Cr.P.C. have been defined in

Chandni Srivastava Vs. CBI & Ors. decided on 9th Feb., 2016 in

W.P.(CRL) 3486/2018 & Crl.M.A. 47373/2018 Page no.15 of 17

WP(Crl.) 743/2013 in which it was held that Sec. 220 of the Cr.P.C. permits of one trial even if many offences are committed, if such offences form part of the same transaction, the rationale for such an exception being that in such circumstances, separate trials may lead to conflicting judgments.

17. In ‘Mohan Baitha vs. State of Bihar, AIR 2001 SC 1490’, the

Supreme Court interpreted Section 220 of the Code and observed as

under:-

"It may be noticed that under Section 220 of the

Code of Criminal Procedure, offences more than

one committed by the same persons could be tried

at one trial, if they can be held to be in one series

of acts, so as to form the same transaction. The

expression "same transaction" from its very nature

is incapable of an exact definition. It is not

intended to be interpreted in any artificial or

technical sense. Common sense and the ordinary

use of language must decide whether on the facts

of a particular case, it can be held to be in one

transaction. It is not possible to enunciate any

comprehensive formula of universal application

for the purpose of determining whether two or

more acts constitute the same transaction. But the

circumstances of a given case indicating proximity

of time, unity or proximity of place, continuity of

action and community of purpose or design are the

factors for deciding whether certain acts form parts

of the same transaction or not. Therefore, a series

of acts whether are so connected together as to

form the same transaction is purely a question of

fact to be decided on the aforesaid criteria".

18. The broad test, therefore, for ascertaining whether offences

charged form part of the same transaction is whether the other set of offences, even though distinct and separate, have been committed for facilitating the commission of the main offence. If the offences alleged involve similar persons and there is a hint of continuity of action, it is then part of the same transaction. Thus, if the substratum of the series of acts is common, then those acts do constitute same transaction.

19. As discussed above, the three complaints in fact are a part of the same transaction. The first complaint has been filed on the assumption that petitioner is holding an undisclosed foreign account and two subsequent complaints are nothing but to arrive at a figure to meet the ingredients of the first offence. The chart given above reveals that the allegations, documents and nature of evidence are same in all the three complaints. In these circumstances, it will be in the interest of justice to have a common trial for all the three complaints.

 IN THE HIGH COURT OF DELHI AT NEW DELHI

 Pronounced on: November 24th, 2020

 W.P.(CRL) 3486/2018 & Crl.M.A. 47373/2018

PARAMINDER SINGH KALRA  Vs THE COMMISSIONER, INCOME TAX 

CORAM: HON'BLE MR. JUSTICE BRIJESH SETHI


1. The petitioner is said to be the Director/EEO of one M/S

Consortium Securities Pvt. Ltd. On 28th July, 2011 the respondent/

department conducted a search on the premises of petitioner on the

allegation that an information was received from the Government of

France that petitioner is having an account in HSBC Bank, Zurich,

Switzerland with the mala fide intention to evade tax and to hide

money transactions.

2. The respondent/department preferred a criminal complaint being

CC No.511538/16 (Old CC No.131/2014), under Section 276-D of the Income Tax Act on 28th February, 2015 against the petitioner. The respondent/ department also preferred two separate criminal

complaints under Section 276-C (1) and Section 277 of the Income

Tax Act being CC No. 528982/16 (Old CC No.157/4) and CC

No.528983/16 (Old CC No.158/4) on 12th January, 2016. In this

petition, the stand of the petitioner is that the respondent/department

has preferred these complaints on the very same material, evidence,

witnesses and documents and the allegation in all the three complaints are to a large extent word to word same.

3. The petitioner is facing three separate trials in all the three

complaints before the same Magistrate for allegedly not declaring the

fact of having a foreign account to the Income Tax authorities, though the material and evidence relied upon by the respondent/department is similar in all the three complaints. Petitioner stated that he had filed an

application before the learned Magistrate for clubbing of the three

complaints and joint trial, which was rejected by the learned

Magistrate on 30th June, 2018 while observing as under:-

“7. Keeping foreign funds for number of years

might be part of same transaction but not

declaring the same in the Income Tax file for each

specific year under prosecution is a distinct

offence. Each instance of filing of income tax

return without disclosing foreign funds is a

separate and different act and same cannot held in

part of same transaction.

8. In the present case I am of the opinion that

the test of each offences being part of same

transaction fails. As in the present case the

accusations are for evasion of income tax for the

different assessment years or for false statement

given on oath before the income tax authorities.

9. Accordingly, in my humble opinion, no

prejudice would be caused to the accused if he is

tried in the separate complaints.”

4. Vide this petition, petitioner is seeking quashing of the aforesaid

order of 30th June, 2018 passed by the learned Magistrate on the

ground that petitioner cannot be subjected to several criminal

prosecutions for the same offence on the basis of same material,

evidence and list of witnesses under the same enactment merely on the

basis that the financial years of the complaints are different. It is

submitted on behalf of the petitioner that the filing of three different

complaints by the respondent/Department is abuse of process of law

and is in contravention of Article 20(2) of the Constitution of India,

Section 71 of IPC, Section 300 of Cr.P.C and Section 26 of General

Clauses Act.

5. It is averred on behalf of the petitioner that first the existence of

the alleged foreign account for funding of amount from India has to be proved and only thereafter the other two complaints, which are based on mere assumption of petitioner having a foreign account funded

from India, have to follow. It is stated that such an assumption has to

be dealt with in one complaint instead of all the three complaints and

in case the respondent/department fails to prove that the petitioner has suppressed holding of a foreign account or the income, the subsequent complaints shall cease to exist, for which petitioner has been forced to undergo trial.

6. It is urged on behalf of the petitioner that the learned trial court

in para-7 of the impugned order dated 30th June, 2018 has returned the finding that each instance of filing of income tax return without

disclosing foreign funds is a separate and different act and same cannot form part of same transaction, which is an erroneous conclusion inasmuch as that in the very same paragraph the learned trial court has concluded that keeping of foreign funds for number of years is part of

the same transaction. It is stated that filing of income tax returns for

each financial year cannot give rise to a separate cause of action for

filing prosecution for each financial year, particularly when the core

allegation is of keeping a foreign account, which the court itself

concluded to be part of the same transaction.

7. It was submitted on behalf of the petitioner that the respondent

has not been able to distinguish between 'assessment proceedings' and the 'prosecution proceedings'. The assessment proceedings are

conducted by an Assessment Officer as designated under the Income

Tax Act while an "offence" is triable by a Court of Law. Assessment

proceedings conducted by competent authority known as Assessment

Officer as defined u/s 2(7A) is an assessment for the purposes of

calculating/assessing any tax or any other sum of money payable under

the Income Tax Act, be it interest or penalty."Tax" is defined u/s 2(43)

of Income tax Act to mean as income tax chargeable in any

Assessment Year and subsequent years under the provisions of Income

Tax Act, which may be of one year or spread over to several years.

Such "tax" does not include "interest" or "penalty". Interest is defined under section 2(28A) of Income Tax. There can be prosecution only for payable interest or penalty or tax, as stipulated u/s 276C of Income

Tax Act. Assessment proceedings are dealt under separate chapters of

Income Tax Act whereas penalties imposable are dealt under Chapter

XXI of Income Tax Act from sections 270 to 275 of the said Act.

Learned counsel for the petitioner, therefore, submitted that importing

the concept of "Assessment Year" into the definitions of "offences"

triable by Special Courts is reading something in the definition which

does not exists and which is contrary to constitutional safeguards and

criminal jurisprudence.

8. It was submitted on behalf of the petitioner that it is laid down in

law that if different cases are filed on same cause of action, 'Doctrine

of Issue Estoppel' prevents second prosecution on the same sets of

facts for which a person could be prosecuted. The petitioner relied

upon decision of Hon’ble Apex Court in State of ‘Andhra Pradesh vs.

Cheemalapati Ganeswara Rao & Anr., 1964 (3) SCR 297’ and a

decision dated 9th February, 2016 of a Coordinate Bench Of this Court

in ‘Chandni Srivastava Vs. CBI & Ors.’ to submit that allowing of

several complaints on same cause of action would lead to reappreciation of evidence several times on one issue of fact which is

against the principle of "Doctrine of Issue Estoppel". Hence, dismissal

of impugned order of 30th June, 2018 passed by the learned trial court

is sought and it is prayed that a common trial in all the three

complaints be conducted.

9. On the other hand, respondent /department has alleged that

during search proceedings on 28th July, 2011, the petitioner in his

statement had admitted of having an undeclared account in HSBC

Bank, Zurich, Switzerland and disclosed the entire modus operandi of

opening the account with the help of an introducer, one Charlie with

the mala fide intention to evade tax. It is the stand of respondent that

during the financial year 2006-07, notices dated 9th May, 2013 and 15th July, 2013, under Sections 142(1) of the Income Tax Act, 1961

(henceforth referred to as the “Act”) were issued to the petitioner to

furnish the details of the foreign accounts held by him. In addition, he was also asked to provide consent letter to procure details from HSBC bank, Zurich, Switzerland. Since the petitioner failed to respond to the aforesaid, notice under Section 274 r/w Section 271 of the Act was issued for non compliance of Section 142(1) of the Act, which is punishable with rigorous imprisonment for a term upto one year under section 276D of the Act. It is alleged that the petitioner did not disclose the foreign bank account in return of income and balance appearing in the said foreign account was also not taken into account in his balance

sheet and thus, the petitioner made a "willful attempt to evade income

tax" thereby committed substantive offence under section 276C(1) of

the Act for which the he is liable to be prosecuted u/s 276C(1) of the

Income Tax Act for both the assessment years i.e. A.Y. 2006-07 and

A.Y. 2007-08. Besides, the petitioner is also alleged to have committed

the offence under Section 277 of I.T. Act for making a false statement/

false verification in the respective returns of income for both the

assessment years 2006-07 and 2007-08. Resultantly, criminal

complaint C.C. No. 511538/16, under Section 276D of the Act for the

assessment year 2006-07 was preferred by the respondent/department

against the petitioner. In addition, two separate criminal complaints

C.C. Nos. 528983/16 and 528982/16 for the assessment years 2006-07

and 2007-08, u/s 276C(1) and 277 of the Act were preferred by the

respondent/department.

10. It was further submitted on behalf of respondent/department that

no illegality has been committed by the department by filing three

different complaints, as the offence committed in each complaint is

separate and distinct. Attention of this Court was drawn to the

provisions of Sections 276C, 276D and 277 of the Income Tax Act.

11. Learned counsel for respondent/department submitted that

every assessment year is separate and distinct year under the

provisions of the Income Tax Act. The proceeding under the Act

initiates with filing of return by the assessee and culminates at framing of assessment order (including the appellate proceedings) determining the correct tax liability of an assessee and recovery of pursuant demand arising thereto. The offence under Section 276C of the Act can only be in respect of particular assessment year alone as the quantum of sentence depends upon the amount of tax, penalty or

interest sought to be evaded. Similarly, the offence under Section 277

of the Act is also assessment year specific, as the misdeclaration or

furnishing of false account or statement is assessment year specific

and such misdeclaration etc. are committed while the assessee files the return for a particular assessment year or during the course of

assessment proceedings of a particular assessment year. Depending

upon the nature of offences committed, there can be more than one

offence in respect of any particular assessment year for which separate

complaint can be preferred within the same assessment year also.

12. Learned counsel for respondent/department further submitted

that Section 276D of the Act provides for punishment for failing to

comply with the notice under Section 142(1) of the Act or failing to

produce within the time specified such accounts or documents as are

referred in the notice under section 142(1) and for each default, a

separate complaint can be instituted by the department, which in the

instant case was instituted for the assessment year 2006-07. It was

further submitted on behalf of respondent that by not taking into

account the transactions in the said foreign bank account in his return

of income and by not taking into account the balance appearing in the said foreign bank account in his balance sheet, petitioner had

committed the offence under section 277 of the Act by making false

statement/ false verification in the respective returns of income for

both the assessment years 2006-07 and 2007-08. Therefore, separate

criminal complaints C.C. Nos. 528982/16 and 528983/16 for

assessment years 2006-07 and 2007-08 u/s 276C(1) and u/s. 277 of the

Act was preferred by the Department. Learned counsel pointed out that

as per the provisions of Code of Criminal Procedure, the offence under

Section 256D of I.T. Act is a summons triable offence and Sections

276C and 277 I.T. Act are warrant triable cases and these cannot be

tried together. It is also pointed out that Section 220 Cr. P.C is an

exception to section 218 Cr.P.C. which provides for one trial for every such offence if these are a part of the same transaction. It was

submitted that offence under Section 276C I.T. Act and Section 277

I.T. Act are premised on different transactions in the said undisclosed

foreign account and non disclosure thereof in the income tax returns

for different assessment years. It was stated that these transactions are not part of same transaction warranting joint trial under Section 220 Cr.P.C and thus, this petition deserves dismissal.

13. I have heard the rival submissions made by learned counsel for

the parties and gone through the material placed on record. The genesis

of trial of three petitions before the trial court is the complaint bearing

CC No.511538/16 (Old CC No.131/2014), under Section 276-D of the

Income Tax Act dated 28th February, 2015 and the other two

complaints rest on the same. Whether the petitioner is holding a

foreign account or not is a matter of trial in the first complaint and the assumption that he holds an undisclosed foreign account, which forms basis of other two complaints, is also subject matter of trial.

14. The following chart will reveal that facts and evidence are the

same in all the complaints.

S.No.

CC No. 511538/16

(Old No. 131/4)

CC No. 528982/16 (Old

No. 157/4)

CC No. 528983/16 (Old

No. 158/4)

1. Information received

from the Government

of France in 2011

under Double Tax

Avoidance

Convention with India

revealed that certain

Indian including

accused, held or were

beneficial owners of

bank account(s) with

HSBC, Switzerland.

That information received

from the Government of

France in 2011 under

double tax avoidance

convention with India

revealed that certain Indians

including the accused, held

or were beneficial owners

of Bank account(s) with

HSBC, Switzerland. The

information/documents

received, contained the

personal information of the

accused viz. his name,

address, nationality, date of

birth, place of birth,

profession, place of office,

passport no. etc. The

documents also contained

details of the entities which

were held by the accused as

trustee viz. ‘Nine on Ten

Foundation’ and “Burnfield

Invest SA’ etc.

That information

received from the

Government of France in

2011 under double tax

avoidance convention

with India revealed that

certain Indians including

the accused, held or were

beneficial owners of

Bank account(s) with

HSBC, Switzerland. The

information/documents

received, contained the

personal information of

the accused viz. his

name, address,

nationality, date of birth,

place of birth, profession

placed of office, passport

no. etc. the documents

also contained details of

the entities which were

held by the accused as

trustee viz. “Nine on Ten

Foundation’ and

Burnfield Invest SA’ etc.

2. That a search action

was carried out

on28.07.2011 at the

residence of the

accused, A-29 Friends

Colony (East), New

Delhi.

That a search action was

carried out on 28.07.2011 at

the residence of the

accused, A-29 Friends

Colony (East), New Delhi.

That a search action was

carried out on

28.07.2011 at the

residence of the accused,

A-29 Friends Colony

(East), New Delhi.

3. During the search

proceedings statement

of the accused was

recorded on oath, in

which he had written

all the answers in his

own handwriting. On

the basis of

information received

regarding his account

with HSBC Bank,

Zurich he was

questioned about his

foreign bank

accounts. He

admitted that he had

opened a bank

account with HSBC

Bank, Zurich,

Switzerland in

December 2002, when

visited there. ….

…He further said that

the account is not into

existence as on today

and should have been

That during the search

proceedings statement u/s

132(4) of the I.T. Act dated

28.07.2011 of the accused

was recorded on oath, in

which he had written

answers to question 5 to 34

in his own handwriting.

On the basis of information

received regarding his

account with HSBC Bank,

Zurich he was questioned

about his foreign bank

accounts. He admitted that

he had opened a bank

account with HSBC Bank,

Zurich, Switzerland in 2002

when he visited there….

…He further said that the

account is not into existence

as on today and should have

been closed. He further

stated that the said bank

account with HSBC Bank

was not disclosed in his

return of income.

That during the search

proceedings statement

u/s 132(4) of the I.T. Act

dated 28.07.2011 of the

accused was recorded on

oath, in which he had

written answers to

question 5 to 34 in his

own handwriting. On

the basis of information

received regarding his

account with HSBC

Bank, Zurich he was

questioned about his

foreign bank accounts.

H admitted that he had

opened a bank account

with HSBC Bank,

Zurich, Switzerland in

2002 when he visited

there…..

…He further said that the

account is not into

existence as on today and

should have been closed.

He further stated that the

closed. He further

stated that the said

bank account with

HSBC Bank was not

disclosed in his return

of income. Regarding

mode of operation he

submitted that he used

to give cash on the

instruction of the

introducer at Delhi,

who arrange to

deposit the same in

his bank account at

Zurich. He further

stated that he has

given at Delhi in the

year 2002 amount

ranging from Rs. 2-5

crores.

Regarding mode of

operation he submitted that

he used to give cash on the

instruction of the introducer

at Delhi, who arrange to

deposit the same in his bank

account at Zurich/ he has

further stated that he had

given at Delhi in the year

2002 amount ranging from

Rs. 2-5 crores.

said bank account with

HSBC Bank was not

disclosed in his return of

income. Regarding

mode of operation he

submitted that he used to

give cash on the

instruction of the

introducer at Delhi, who

arrange to deposit the

same in his bank account

at Zurich. He has further

stated that he had given

at Delhi in the year 2002

amount ranging from Rs.

2-5 Crores.

15. Perusal of the above table reveals that the respondent has

preferred these complaints on the very same material, evidence and

documents and allegations in all the three complaints are to a large

extent quite same. The petitioner is, thus, facing three separate trials in all the three complaints before the same Magistrate for not declaring the fact of having a foreign account to the Income Tax Authorities.

16. The ingredients of Section 220 of Cr.P.C. have been defined in

Chandni Srivastava Vs. CBI & Ors. decided on 9th Feb., 2016 in

W.P.(CRL) 3486/2018 & Crl.M.A. 47373/2018 Page no.15 of 17

WP(Crl.) 743/2013 in which it was held that Sec. 220 of the Cr.P.C.

permits of one trial even if many offences are committed, if such

offences form part of the same transaction, the rationale for such an

exception being that in such circumstances, separate trials may lead to conflicting judgments.

17. In ‘Mohan Baitha vs. State of Bihar, AIR 2001 SC 1490’, the

Supreme Court interpreted Section 220 of the Code and observed as

under:-

"It may be noticed that under Section 220 of the

Code of Criminal Procedure, offences more than

one committed by the same persons could be tried

at one trial, if they can be held to be in one series

of acts, so as to form the same transaction. The

expression "same transaction" from its very nature

is incapable of an exact definition. It is not

intended to be interpreted in any artificial or

technical sense. Common sense and the ordinary

use of language must decide whether on the facts

of a particular case, it can be held to be in one

transaction. It is not possible to enunciate any

comprehensive formula of universal application

for the purpose of determining whether two or

more acts constitute the same transaction. But the

circumstances of a given case indicating proximity

of time, unity or proximity of place, continuity of

action and community of purpose or design are the

factors for deciding whether certain acts form parts

of the same transaction or not. Therefore, a series

of acts whether are so connected together as to

form the same transaction is purely a question of

fact to be decided on the aforesaid criteria".

18. The broad test, therefore, for ascertaining whether offences

charged form part of the same transaction is whether the other set of offences, even though distinct and separate, have been committed for

facilitating the commission of the main offence. If the offences alleged involve similar persons and there is a hint of continuity of action, it is then part of the same transaction. Thus, if the substratum of the series of acts is common, then those acts do constitute same transaction.

19. As discussed above, the three complaints in fact are a part of the

same transaction. The first complaint has been filed on the assumption that petitioner is holding an undisclosed foreign account and two subsequent complaints are nothing but to arrive at a figure to meet the ingredients of the first offence. The chart given above reveals that the allegations, documents and nature of evidence are same in all the three complaints. In these circumstances, it will be in the interest of justice to have a common trial for all the three complaints.

20. In view of the above discussion, this petition is allowed. The

order dated 30th June, 2018 passed by the Ld. Trial Court rejecting the

application of the petitioner for clubbing of the three complaints and

joint trial is set aside. Vide order dated 25th February, 2020,

proceedings before the learned Trial Court were directed to be stayed.

The stay order stands vacated. It is now directed that common trial in

CC No.511538/16 (Old CC No.131/2014), under Section 276-D of the

Income Tax Act dated 28th February, 2015; CC No.528982/16 (Old CC

No.157/4) and CC No.528983/16 (Old CC No,158/4) dated 12th

January, 2016, under Section 276-C (1) and Section 277 of the Income

Tax Act shall take place before the court concerned.

21. With aforesaid directions, this petition along with pending

application, is disposed of.

22. The order be uploaded on the website of this Court forthwith.

BRIJESH SETHI, J

NOVEMBER 24th, 2020


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