M.K. Mathivathanan vs Income Tax Officer

Arunachalam, J.—The petitioner is the sole accused in CC. No. 267 of 1987 pending on the file of the Additional Chief metropolitan

Magistrate E. O. I., Madras. At the instance of the Income Tax officer, Investigation, City Circle V, Madras - 600 034, he is being prosecuted for

the alleged commission of offences punishable under sections 193, 196 and 420, Indian Penal Code, 1860, and section 276C(2) and 277 of the

Income Tax Act, 1961.

The case of the prosecution against the petitioner is that he is an engineering contractor who wanted to take civil engineering contracts from the

Public Works Department, Tamil Nadu Housing Board, etc., and for the purpose of registering himself as a contractor with the above authorities,

he had to file Income Tax clearance certificates as regards his Income Tax dues. Though the petitioner was assessed to Income Tax in City Circle

V - (7), Madras, from the assessment year 1971-72 onwards, he had filed an application for and Income Tax clearance certificate before the

Income Tax Officer, City Circle VI - (5), Madras. In the course of the search conducted u/s 132 of the Income Tax Act on October 16, 1986,

two tax clearance certificates in original and several other xerox copies relating to the assessment years 1974-75 to 1981-82 were seized from the

premises of the petitioner. A close look at the tax clearance certificates revealed that they had been forged. It is under these circumstances that this

prosecution was initiated.

In this petition filed u/s 482, Criminal Procedure Code, to call for the records and quash the pending proceedings as not maintainable and an

abuse of the process of the court, Mr. N. Natarajan, learned counsel appearing on behalf of the petitioner, urged a single contention in respect of

the third charge framed for and offence punishable u/s 420, Indian Penal Code. He submitted that an Income Tax clearance certificate cannot be

defined as property, and the prosecution has not shown that the petitioner had made any benefit out of it from anybody. He also urged that though

the respondent himself had not alleged commission by the petitioner had made any benefit out of it from anybody. He also urged that though the

respondent himself had not alleged commission by the petitioner of an Offence punishable u/s 420, Indian Penal Code, the learned magistrate had

erroneously chosen to frame a charge for the offence as well.

I have heard Third Ramaswamy K. R. appearing on behalf of the respondent.

Even at the outset, it must be stated that I am unable to agree with the contention put forth by Thiru Natarajan. In R.K. Dalmia Vs. Delhi

Administration, , the apex court, while considering the use of the word ""property"" in the Indian Penal Code stated as hereunder (headnote of AIR

1962 SC) :

The word ''property'' is used in the Indian Penal Code in a much wider sense than the expression ''movable property''. There is no good reason to

restrict the meaning of the word ''property'' to movable property only when it is used without any qualification in section 405 or in the other

sections of the penal Code. Whether the offence defined in a particular kind of property will depend not on the interpretation of the word

''property'' but on the fact whether that particular kind of property can be subject to the acts covered by that section. It is in this sense that it may

be said that the word ''property'' in a particular section covers only that type of property with respect to which the offence contemplated in that

section can be committed.

In Abhayanand Mishra Vs. The State of Bihar, , while considering whether an admission card to a University examination was property within

the meaning of section 420, Indian Penal Code, the Supreme Court stated as follows (headnote) :

An admission card to sit for the M. A. examination of a University is property within the meaning of section 420, Indian Penal Code. Though the

admission card as such has no pecuniary value, it has immense value to the candidate for the examination hall and consequently cannot appear at

the examination.

In Nrisingha Murari Chakraborty and Others Vs. State of West Bengal, , while considering the meaning of ""property"" u/s 420 and 415, Indian

penal Code, the apes court held that a passport was property. The observations of the Supreme Court can be usefully extracted (headnote) :

A passport is a document which, by its nature and purpose, is a political document for the benefit of its holder. It recognises him as a citizen of the

country granting it and is in the nature of a request to the other country for his free passage there.

There can, therefore, be no doubt that a passport is a document of importance for travel abroad and is of considerable value to its holder. A

passport provides the several benefits mentioned above.

It is a tangible thing and is capable of ownership. There can, therefor, be no doubt that it is ''property''.... The word ''property'' does not

necessarily mean that the thing, of which delivery was dishonestly desired by the person who cheats, ''must have a money value or a market value,

in the hands of the person cheated''. Even if the thing has no money value in the hands of the person cheated, but becomes a thing of value, in the

hands of the person, who may get possession of it, as a result of the cheating practiced by him, it would still fall within the connotation of the term

''property'' in section 420 of the Indian Penal Code.

In the aforesaid case, the Supreme Court had referred to its earlier view in Ishwarlal Girdharlal Parekh Vs. State of Maharashtra and Others, .

In that case, the question for consideration was whether an order of assessment was property within the meaning of section 420 of the Indian penal

Code. The charge in that case was that the appellant dishonestly or fraudulently induced the Income Tax authorities and obtained an assessment

order for less Income Tax than due. It was held that the order of assessment received by an assessee was ""property"" since it was of great

importance to the assessee as containing a computation of his total assessable income and as a determination of his tax liability.

P. R. Gokulakrishnan J., as he then was, in Pandurangan, In re [1973] Law Weekly (Crl. 53) (Mad) observed as follows :

P. W. 1. who issued the Income Tax clearance certificate has categorically stated in the box as follows :

''Had I known that the contract amount of the accused for the above years (63 to 68) is 4 or 5 lakhs, I would not have issued the Income Tax

clearance certificate.''

I do not think that there is any difficulty in coming to the conclusion that the appellant herein had fraudulently induced P. W. 1 to issue the Income

Tax clearance certificate, exhibit P-2. From the admitted facts of the case, there is no difficulty in coming to the conclusion that an offence u/s 420,

of the Indian Penal Code, i.e., cheating and dishonestly inducing delivery of a property, has been committed by the appellant herein.

The law laid down by the apex court and this court would be sufficient to negative the contention urged. The Income Tax clearance certificate

obtained by the petitioner was for the purpose of registering himself as a contractor with the Public Works Department, Tamil Nadu Housing

Board, etc. The purpose of this certificate was to ensure that those authorities under whom the petitioner desired to register himself as a contractor

must be aware of the Income Tax dues of the petitioner. Therefore, even if it be that the Income Tax clearance certificate as such may not have any

pecuniary value, it certainly has immense value to the petitioner for registering himself as a contractor. Without such registration, the petitioner will

not be able to secure contracts. Naturally, the Income Tax clearance certificate becomes a thing of value in the hands of the petitioner who gets

into possession of it as a result of deception practised by him, as is evident at this stage, from the allegations made in the complaint. It is not

necessary that a false pretense should be made in express words, but may be inferred from circumstances, including the conduct of the accused.

We cannot also overlook the Explanation to section 415 of the Indian Penal Code, which reads that a dishonest concealment of fact is a deception

within the meaning of the section. Irrespective of the label of offences in the complaint, the court is bound to frame charges for all the offences

disclosed on the material placed before it.

This petition which has no merit is, therefore, dismissed.