PETITIONER: STATE OF PUNJAB Vs. RESPONDENT: <NAME> AND <NAME>. DATE OF JUDGMENT06/08/1973 BENCH: <NAME>, <NAME>: <NAME>, <NAME>, A. CITATION: 1973 AIR 2407 1974 SCR (1) 328 1974 SCC (3) 277 CITATOR INFO : RF 1973 SC2773 (25) R 1977 SC 472 (13) R 1983 SC 867 (25) ACT: Criminal practice and procedure-Appreciation of evidence and sentence. HEADNOTE: The respondents were convicted of murder and sentenced to death. <ORG> acquitted them in appeal. In appeal to this Court, setting aside the acquittal, HELD : (1) A criminal trial is not like a fairy tale wherein one is free to give flight to one's imagination and phantasy. It concerns itself with the question as to whether the accused arraigned at the trial is guilty of the crime with which he is charged. Crime is an event in real life and is the product of interplay of different human emotions. In arriving at the conclusion about the guilt of the accused charged with the commission of a crime, the court has to judge the evidence by the yardstick of probabilities, its intrinsic worth and the animus of witnesses. Every case in the final analysis would have to depend upon its own facts. Although the benefit of every reasonable doubt should be given to the accused, the courts should not at the same time reject evidence which is ex facie trustworthy on grounds which are fanciful or in the nature of conjectures. [337F-H] In the present case, <ORG> has rejected the prosecution evidence which was ex facie of a convincing nature on grounds which partake of the nature of conjectures and surmises. The view taken by <ORG> is manifestly unreasonable and has resulted in miscarriage of justice. A perusal of the judgment of <ORG> shows that in acquitting the accused respondents, <ORG> approached the entire matter in a spirit of distrust and suspicion of the various officers who dealt with the case. [337H-338B] (2) <ORG>, while rejecting the prosecution evidence, made unwarranted criticism couched in harsh language about the magistrate who received the copy of F.I.R., the doctor, the investigating officer and the Sessions Judge who tried the case. [337E-F] (3) In view of the fact that more than two years had elapsed since <ORG> acquitted the respondents, it would be more appropriate to sentence the accused to imprisonment for life instead of to the extreme penalty. [338B-C] JUDGMENT:

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 7 of 1972.

Appeal by special Leave from the judgment and order dated 25-2-1971 of <ORG> in Crl. Appeal No. 1031/70.

<NAME> and <NAME>, for the appellant. <NAME> and <NAME>, for the respondents. The Judgment of the Court was delivered by <NAME>, <NAME> accused <NAME> (27), <NAME> (36), <NAME> (30), <NAME> (38), <NAME> (27). <NAME> (22), <NAME> (19), <NAME> (22) and <NAME> (23) were tried in the court of Sessions Judge <NAME> in connection, with an occurrence which took place on July 8, 1948 in village Longowal Khurd. In the course of that occurrence <NAME> (35), <NAME> (30,) and <NAME> (25) received fatal in-

juries. Injuries were also received by <NAME>, <NAME>, <NAME> and <NAME> PWs. Learned Sessions Judge convicted <NAME> and <NAME> under section 302 Indian Penal Code on two counts for causing the death of <NAME> and <NAME> deceased and sentenced them to death on each count. The said two accused were also convicted under section 302 read with section 34 Indian Penal Code in connection with the murder of <NAME> and were sentenced to undergo imprisonment for life on that account. In addition to that, the aforesaid two accused were convicted under section 307 Indian Penal Code on four counts for the injuries caused to <NAME>, <NAME>, <NAME> and <NAME> PWs and were sentenced to undergo rigorous imprisonment for a period of three years on each count. <NAME> accused was convicted under section 302 Indian Penal Code for causing the death of <NAME> deceased and was sentenced to death. In connection with the death of <NAME> and <NAME>, <NAME> was convicted under section 302 read with section 34 Indian Penal Code on two counts and was sentenced to undergo imprisonment for life. <NAME> was, in addition, convicted under section 307 read with section 34 Indian Penal Code for injuries caused to <NAME>, <NAME>, <NAME> and <NAME> and was sentenced to undergo rigorous imprisonment for a period of three years on each count. The remaining six accused were acquitted by the, Sessions Judge. On appeal and reference, <ORG> acquitted <NAME>, <NAME> and <NAME> by giving them the benefit of doubt. The State of Punjab has now come up in appeal to this Court by special leave against the judgment of <ORG> acquitting the above mentioned three accused respondents. Out of the nine accused, <NAME>, <NAME> and <NAME> are brothers. Likewise, <NAME>, <NAME> and <NAME> accused are brothers. <NAME> accused, who is a constable in <ORG>, add <NAME> accused too are brothers. <NAME> accused is the maternal uncle of <NAME>. Amongst the three deceased persons, <NAME> and <NAME> were brothers. <NAME> (PW 8) and <NAME> (PW 27) are the brothers of those two deceased persons. <NAME> (PW 21 ) is brother of <NAME> deceased. The prosecution case is that the relations between the party of the accused and that of the deceased persons were strained for about 10 or 12 years before the occurrence, and the two groups had since then been involved in a number of cross criminal cases. About two years before the occurrence, <NAME> deceased along with some others had caused injuries to <NAME> and <NAME>, uncle of <NAME> accused. A criminal case was on that account pending in. the court of Magistrate <NAME>. July 8, 1968 was the date of hearing in that case and on that day <NAME> (PW 8) accompanied <NAME> to the court at <NAME> for pursuing that case. After the proceedings of the case were over, <NAME> (PW 8) came back with <NAME> deceased to his house in village Longowal Khurd. Longowal Khurd is at a distance of about two-and-a-half miles from <NAME>. The house of <NAME> deceased was at a short distance from that of <NAME> in Longowal Khurd. <NAME> (PW 8) himself lived in Longowal Kalan which is at a distance of about two and a half furlongs from Longowal Khurd. When <NAME> (PW 8) was still present at the house of <NAME> deceased, it is stated, they heard the noise of changars (challenging shouts) from near the, house of <NAME> deceased. Hearing the noise of changars, <NAME> deceased and his brother <NAME>, (PW 21) went to the house of <NAME>. <NAME> PW also followed them to the house. of <NAME>. On arrival there <NAME> (PW

8) found <NAME>, <NAME> and <NAME> deceased as well as <NAME> (PW 19), <NAME> (PW 22), <NAME> (PW 27), <NAME> (PW 21), <NAME> (PW 25) and <NAME> (PW 26), present in the courtyard of <NAME> house. <NAME>, wife of <NAME>, and <NAME>, wife of <NAME>, too were present there. The nine accused are then stated to have come near the compound wall of the courtyard of <NAME>'s house. The compound wall was about sixand-a-half feet high from outside and four-and-a half feet high from inside because the courtyard was at a higher level than the ground outside. At the instigation of <NAME>, <NAME> and <NAME> accused, it is stated, <NAME> and <NAME> accused threw one hand-grenade each into the courtyard of <NAME>'s house. Both the hand-grenades exploded in the courtyard as a result of which <NAME>, <NAME> and <NAME> deceased and <NAME>, <NAME>, <NAME> and <NAME> PWs received injuries. All the nine accused then came inside the courtyard of the house of <NAME> deceased. <NAME> and <NAME> accused were armed with spears. <NAME>, <NAME>, <NAME>, <NAME> and <NAME> accused had kirpans, while <NAME> and <NAME> were empty handed. <NAME> accused on arrival delivered a spear blow in the left flank of <NAME> deceased. <NAME> accused also gave a spear blow on the right arm of <NAME> accused dealt a kirpan blow on the nose of <NAME> PW, while <NAME> accused gave a blow with his sheathed kirpan on the back of <NAME> PW. <NAME> accused stepped towards <NAME>,. (PW 8) for attacking him with a kirpan whereupon <NAME> (PW 8) took up a panda from the courtyard of <NAME> and brandished it towards <NAME>. One blow with that danda was given on the left shoulder of <NAME> accused. Those present in the courtyard also raised alarm whereupon the nine accused ran away.

Some water was then poured into the mouth of <NAME>, but he succumbed to the injuries received by Mm. <NAME> and <NAME> PWs then brought a cart from the house of <NAME> (PW 8). <NAME> and <NAME> deceased were laid an that cart. <NAME> (PW 8), <NAME>, <NAME> and <NAME> then took that cart to Batala hospital. When they arrived near the hospital, <NAME> (PW 8) went to police station Sadar Batala and lodged there report P.A. at 11.15 p.m. Sub Inspector <NAME> (PW 30) then went to the hospital. Before doing so, the Sub Inspector deputed two Assistant Sub Inspectors and four constables to proceed to the place of occurrence. Sub Inspector <NAME> found <NAME> and <NAME> present in the hospital. Their injuries were being examined by Dr. <NAME> when the Sub Inspector arrived there. On the applications of the Sub Inspector, Dr. <NAME> made an endorsement that <NAME> and <NAME> were in fit condition to make statements. The Sub Inspector then deputed a head constable to call the magistrate having jurisdiction in the area. It was raining heavily at that time and as the magistrate did not arrive, the Sub Inspector recorded the dying declarations of <NAME> and <NAME> in the presence of Dr. <NAME>. The condition of <NAME> and <NAME> was found to be serious and so they were sent to <ORG> Amritsar. Sub Inspector <NAME> then went from Batala hospital to the place of occurrence and reached there at 5 a.m. The Sub Inspector found the dead body of <NAME> lying on a cot. The Sub Inspector prepared inquest report relating to the dead body of <NAME>. Blood-stained earth was taken into possession from three places in the courtyard of <NAME>'s house. The, Sub Inspector also took into possession lever PI, percussion cap P2 and four pieces of exploded hand-grenade from the place of occurrence and put them into a sealed parcel.

Injuries of <NAME>, <NAME> and <NAME> were examined by Dr. <NAME> on July 9. <NAME> was found to have two lacerated wounds, one on his right index finger and the other on the bridge of his nose. Both the injuries were grievous. <NAME> was found to have one punctured wound with averted lacerated margins on his right thigh, while <NAME> had one lacerated wound on the right side of his neck. The injuries of <NAME> and <NAME> were found to be simple. <NAME> was examined by Dr. <NAME> on July 10, 1968 and was found to have four simple injuries on his person.

<NAME> and <NAME> who were sent to <ORG> Amritsar succumbed to their injuries on July 10 and 11, 1968 respectively. Post mortem examination on the dead bodies of <NAME> and <NAME> was performed by Dr. <NAME> on July 11, 1968.

The lever, precussion cap and the other parts of the hand- grenades which had been recovered from the place of occurrence were sent to PW 20 <NAME>, Senior Inspector of Explosives. <NAME> expressed the opinion that the above articles were the remnants of an exploded hand-grenade.

At the trial the plea of the nine accused was denial simpliciter. <NAME> and <NAME> accused, in the course of their statements ' also added that they had heard changers on the night of occurrence at about 10 p.m. from the direction of guru dwarf. The explosion of a bomb was also heard at that time but these two accused did not stir out of their houses. Defence evidence was led on behalf of the accused. The purport of the defence evidence was that one <NAME> had been admitted into <ORG> with multiple injuries on the night between July 8 and 9, 1968. A metallic substance was thereafter recovered from the body of <NAME> on July 20, 1968. Defence evidence was also led to show that <NAME> deceased, who was a bus driver of the Punjab Roadways, was away to Pathankot at about 7 p.m. on the day of occurrence.

Learned Sessions Judge found that the prosecution case against <NAME>, <NAME> and <NAME> accused had been proved beyond any shadow of doubt. He accepted the ocular evidence produced in the case. Reliance was, however, not placed upon the dying declarations of <NAME> and <NAME>. The remaining six accused were given the benefit of doubt and were acquitted. <ORG> on appeal and reference acquitted <NAME>, <NAME> and <NAME> also by giving them the benefit of doubt for reasons which would be dealt with hereafter. In appeal before us Mr. <NAME> on behalf of the appellant state has argued that <ORG> was in error in setting aside the conviction of the three accused- respondents and the view taken by <ORG> was manifestly unreasonable. As against that Mr. <NAME> on behalf of the respondents has canvassed for the correctness of the view taken by <ORG>. There is, in our opinion, considerable force in the stand taken on behalf of the appellant. The evidence of Dr. <NAME>, who performed postmortem examination on the body of <NAME>, shows that there were five injuries on the body of the deceased. Out of them, three could be caused with a hand-grenade, while two had been caused with a sharp pointed weapon. One of the last two mentioned injuries was a punctured incised wound on the back of the right forearm, while the other injury.was as under :

"Punctured incised wound 1"X3/4" with clean cut margins, over 5th rib and 5th left intercostal space in mid axillary line with fracture of 5th rib, puncture of left lung near the fissure, went through the entire lung, cross punctured the walls of left auricle, haematoma over the lung and pleural cavity pleura punctured left side, pericardium puncture".

The above mentioned injury was sufficient in ordinary course of nature to cause death. The evidence of Dr. <NAME>, who performed postmortem examination on the bodies of <NAME> and <NAME>, shows that <NAME> had three lacerated wounds which could be caused with a hand-grenade. Likewise, <NAME> had two injuries which could be caused with a hand-grenade. The following injury of <NAME> was sufficient in ordinary course of nature to cause death :

"A penetrating wound 1-1/2" roundish, with lacerated margins 1"' to the left of the mid- epigastric line 3" above the umbilicus with omentum seen out of the wound. There was no charring of the margins."

In the case of <NAME>, the fatal injury was in the abdominal cavity. Operation had been performed at the site of the injury in an attempt to save <NAME>. According to the prosecution case, the hand-grenade injuries to the three deceased persons and injured prosecution witnesses were caused by <NAME> and <NAME> accused when they threw the handgrenades in the courtyard of <NAME> house. It is further the case of the prosecution that the fatal punctured incised wound in mid axillary line of <NAME> deceased was caused by <NAME> accused when he gave the spear blow to <NAME> deceased. The prosecution in support of the above allegations has examined <NAME> (PW 9), <NAME> (PW

19), <NAME> (PW 21), <NAME> (PW 22), <NAME> (PW 25), <NAME> s/o <NAME> (PW 26) and <NAME> (PW 27) as eye witnesses of the occurrence. There appears, in our opinion. to be no cogent ground as to why the evidence of the above mention'ed witnesses. regarding the complicity of the accused-respondents be not accepted. It is, no doubt, true as pointed out by Mr. <NAME>, that these witnesses belong to the party of the deceased but that fact, in our opinion, would only make the court scrutinise the evidence of these witnesses more closely. If their evidence can stand that test, as it does in the present case, there is no reason why it should not be acted upon. Some of the witnesses are close relatives of the deceased persons and it is most difficult to believe that they would spare the real assailants and falsely mention the names of innocent persons as having caused the injuries to the deceased persons. Four of the eye witnesses, namely, <NAME> (PW 19), <NAME> (PW

21), <NAME> (PW 22) and <NAME> (PW 27) received injuries during the course of the present occurrence and there can be hardly any manner of doubt re- garding their presence at the scene of occurrence. It is not possible to accept the contention that these witnesses in spite of the attack upon them and the three deceased persons failed to fix the identity of the assailants. Another fact of which note should be taken is that the first information report in this case was lodged at 11.15 p.m., within a few hours of the occurrence. Although Mr. <NAME> has urged that there was delay in lodging the first information report, we find it difficult to accept this submission. The occurrence, according to the prosecution case, took place at 7.15 p.m. As a result of the occurrence, <NAME> died soon thereafter, while <NAME> and <NAME> received serious injuries. In addition to that, four prosecution witnesses also received injuries. It is plain that the prosecution witnesses must have got stunned because of the sudden occurrence in the course of which three of their close relatives received injuries which ultimately proved fatal and four others were also injured. Attempt was made to pour water into the mouth of <NAME> deceased but <NAME> died soon thereafter. It must have taken some time for <NAME> and others to get out of the state of shock and regain their composure'. They then arranged for a cart which was brought from <NAME>'s house in Longowal Kalan. <NAME> and <NAME> were then laid in that cart and the same was taken to Batala, at a distance of two-and-a-half miles. It cannot, in the circumstances, be said that the period of four hours which was taken in lodging the report at the police station was in any way inordinately long. The fact that the first information report was lodged at the time it Purports to have been done can also be not disputed because the first lnformation report was received by the magistrate having jurisdiction in the area at 1 a.m. as is borne out by the endorsement of the magistrate on the report. The first information report, lodged at the police station within a few hours of the occurrence, contained all the, material facts and, in our opinion, the first information report lends considerable corroboration to the ocular evidence adduced at the trial. The defence suggestion which was put in the cross examination of the prosecution witnesses was that a number of persons had Collected near the village gurudwara when a hand-grenade exploded there and the three deceased persons and the prosecution witnesses received injuries. This suggestion, in the circumstances of the case, was, in our opinion, wholly unfounded. The evidence of Sub Inspector <NAME> shows that when he arrived at the scene of occurrence, he found the different pieces of exploded hand- grenade in the courtyard of the house of <NAME> deceased. This fact would tend to show that the explosion had taken place in the courtyard and not at the gurudwar-. It is also not clear as to what advantage the prosecution would have derived in suppressing the actual place of occurrence and in mentioning a wrong place of occurrence. As would appear from the narration of facts, only members of one party received injuries as a result of the explosion of hand-grenade. If the hand-grenade had exploded in a large gathering near the village gurudwara, it is not likely that the splinters from the exploded hand-grenade would hit the members of only one party and avoid those not belonging to that party. <NAME> deceased at the time of the present occurrence was wearing only a kachha besides a parna, on his head. It is not likely that <NAME> would have gone in that state without a shirt to the gatliering near the village gurudwara. On the contrary, the fact that <NAME> was without a shirt points to the inference that the occurrence took place in the courtyard of his house. <ORG> while rejecting the prosecution evidence referred to the fact that in one of the plans, height of the outer wall of the courtyard of <NAME> house was mentioned to be 6-1/2 ft. while in the other, it was mentioned to be 4-1/2 ft. This discrepancy has been explained by <NAME> (PW 9), whose evidence shows that the level of the courtyard of <NAME>'s house was higher than the ground outside. The height of the boundary wall consequently measured to be 6-1/2 ft from outside and 4-1/2 ft from inside. No question was put to the witness in cross-examination, and we can find no cogent reason as to why the evidence of <NAME> be not accepted. There could also, in our opinion, be no difficulty for those present inside the courtyard from seeing as to who were the persons who threw the hand-grenades, because a 41 ft high wall could not obstruct their view in fixing the identity of the culprits.

Another circumstance which weighed with '<ORG> in rejecting the prosecution evidence was the nature of the injury, on the nose of <NAME> (PW 21). According to the evidence of the prosecution witnesses, the above injury had been caused with a kirpan by <NAME>. <ORG> took the view that the said injury had been caused by a hand-grenade splinter. It was 'held that as the witnesses had deposed that the injury had been caused by a kirpan blow, the evidence of the witnesses was not trustworthy. In this respect we find that the evidence of Dr. <NAME> shows that he expressed the opinion in answer to a police query that the injury on the nose of <NAME> could have been caused with a kirpan. It is, no doubt, true that Dr. <NAME> also expressed the opinion that the said injury could have been caused by a missile or other object, but this fact would not necessarily show that the eye witnesses in this case have made false statements regarding the injury on the nose of <NAME>. In order to draw an inference about the falsity of the evidence of prosecution witnesses in this respect, it is not enough to show that the injury on the nose of <NAME> could have been caused either with a kirpan or with a missile, it is also necessary to rule out the Possibility of the said injury having been caused with a kirpan. The evidence of Dr. <NAME> plainly does not rule out such a possibility.

<ORG> also appears to have been impressed by the defence version that <NAME> deceased was present in Pathankot at about 7 p.m. on the day of occurrence. Reliance in this context was placed upon tile testimony of <NAME> (DW 3) who was conductor of Bus PNP 6972 and who has deposed about <NAME> having driven that bus to Pathankot on the, day of occurrence and about that bus having reached Pathankot at 7 p.m. We find it most difficult to accept this statement of <NAME> in the face of other evidence brought on the record and the surrounding circumstances of the case. <NAME> (PW 11) is a yard master of <ORG> depot at Pathankot. The evidence of this witness was given on the basis of the relevant records. According to this witness, two drivers had been allotted for the bus in question and they were <NAME> deceased and <NAME> (PW 12). <NAME>'s testimony shows that on the day of occurrence it was <NAME> who brought the bus in question to Pathankot at 7 p.m. As the evidence of this witness is based upon the records , it is difficult to discard his testimony. The evidence of <NAME> gets corroboration from the testimony of <NAME> who has deposed that when the said bus arrived at Batala at about 5 p.m. on the day of occurrence on its way from Amritsar to Pathankot, the witness relieved <NAME> deceased. <NAME> then got down from the-bus at Batala and the witness took it to Pathankot. Another witness who has been examined on the point is <NAME> (DW 2), who was the booking clerk of the <ORG> office at Pathankot. According to this witness, the advance way bill of the bus in question showed that its driver was <NAME> when it left Amritsar for Pthankot. The witness, however, admitted that the entry in the way bill was made at the commencement of the journey. In the circumstances, the evidence of the witness is quite consistent with <NAME> having been relieved by <NAME> at Batala.

<NAME> admittedly died during the course of this occurrence. Had he been at Batala at 7 p.m. on the day of occurrence, it is not likely that he could have reached his village before 9.30 or 10 p.m. on the day of occurrence. It is in evidence that a bus takes two hours to travel from Pathankot to Batala. It is difficult to believe that a report about the occurrence at Longowal Khurd could have been lodged at Batala Sadar police station at 11-15 p.m. if, in fact, the occurrence had taken place after 9.30 or 10 p.m.

We are also not impressed by the reasoning that the occurrence took place at a late hour when it was not possible to fix the identity of the assailants. The case of the prosecution, as mentioned earlier, is that the occurrence took place at 7.15 p.m. The sun set on the day of occurrence ,it 7.28 p.m. There was full moon on July 9 and the occurrence took place a day earlier than that. As the occurrence took place before sun set there could, in our opinion be no difficultly in fixing the identity of the assailants. Even if the occurrence had taken place after the sun-set time, there could still be no difficulty in finding out as to who the assailants were. A number of persons were present in the courtyard of <NAME> house. There is no suggestion that a lamp had been lighted at that time. The fact that a large number of persons were present in the courtyard without lighting a lamp would show that there was enough light at that time. It is also significant that the assailants gave two <NAME> blows to <NAME> de- ceased. If there was enough light to enable the assailants to fix the identity of <NAME> before they gave <NAME> blows to him, it stands to reason that the same light would be enough for others to see as to who the assailants were. We, therefore, have no hesitation in rejecting, the argument that there was not enough light at the time of occurrence to enable the prosecution witnesses to fix identity of the, culprits.

Another factor which weighed with <ORG> in discarding the prosecution evidence was that <NAME> (DW 6) was admitted in Batala hospital a few minutes before <NAME> and <NAME> deceased were brought there. According to the testimony of Dr. <NAME>, a metallic foreign substance was recovered from the arm of <NAME> on July 20, 1968. <ORG> took the view that <NAME> too had been injured during the course of the present occurrence and the fact that no reference was made to <NAME> either in the first information report or in the evidence of the prosecution witnesses would go to show that the prosecution evidence is not worthy of credence. In this respect we find that <NAME> was examined as a defence witness. <NAME> in the course of his evidence denied being present at the scene of occurrence and having been injured at that time. According to <NAME>, he had received an injury during the course of a dispute with his father. <NAME>, sister of <NAME>, was also examined as DW 4. She too has denied that <NAME> was present at the time of the present occurrence. It is, in our opinion, not necessary to dilate upon the injury of <NAME> because even if it may be assumed that <NAME> too received an injury during the course of the present occurrence, that would not materially affect the substance of the prosecution evidence regarding the guilt of the three accused- respondents.

The learned judges of <ORG> in rejecting the prosecution evidence have made observations critical about the magistrate, who received the copy of the first information report, as well as about Dr. <NAME>, Sub Inspector <NAME> and. the learned Sessions Judge. So far as the magistrate is concerned, it observed that he was an irresponsible lazy officer as he could not reach the hospital at about 1 a.m. on the night of occurrence in spite of heavy rain for recording the dying declarations of <NAME> and <NAME>. As, regards Dr. <NAME>, the criticism leveled is that he expressed an opinion in answer to the query of the investigating officer that the injury on the nose of <NAME> could be caused with a kirpan. It was observed that the doctor had gone out of the way to please the investigating officer. The doctor was also criticized for attesting the dying declarations. Regarding Sub Inspector <NAME>, <ORG> formed the impression that he was a domineering police officer because lie obtained opinion favorable to the prosecution from Dr. <NAME>. It was also observed that the Sub Inspector had tried to be over clever. There was enough material available, according to <ORG>, which could have been made better use of by a more imaginative officer without artificially or artfully advancing the time of occurrence to day time. As regards the learned Sessions Judge, <ORG> observed that the present marathon trial appeared to have strained his capacities to the maximum limits. The criticism leveled by <ORG> against the above mentioned officers, in our opinion, was not warranted and was couched in language, which was rather harsh.

Perusal of the judgment of <ORG> shows that in acquitting the accused-respondents, <ORG> approached the entire matter in a spirit of distrust and suspicion of the various officers who dealt with this case. We further find that the judgment of <ORG> is based upon conjectures, surmises and suspicion. Looked at in the context of the facts of the case, we find that the view taken by <ORG> is manifestly unreasonable. It is consequently not possible to sustain the judgment of <ORG>.

A criminal trial is not like a fairy tale wherein one in free to give flight to one's imagination and phantasm. It concerns itself with the question as to whether the accused arraigned at the trial is guilty of the crime with which he is charged. Crime is an event in real life and is the product of interplay of different human emotions. In arriv- ing at the conclusion about the guilt of the accused charged with the commission of a crime, the court has to judge the evidence by the yardstick of probabilities, its intrinsic worth and the animus of witnesses. Every case in the final analysis would have to depend upon' its own facts. Although the benefit of every reasonable doubt should be given to the accused, the courts should not at the same time reject evidence which is ex facie trustworthy on grounds which are fanciful or in the nature of conjectures.

<ORG> in the present case, in our- opinion, has rejected the prosecution evidence which was ex facie of a convincing nature on grounds which partake of the nature of conjectures and surmises. The view taken by <ORG>, as already observed, is manifestly unreasonable and has resulted in miscarriage of justice. We accordingly accept the appeal, set aside the judgment of <ORG> and convict the accused-respondents for the offences for which they were convicted by the trial court. As regards the sentence for the offence under section 302 Indian Penal Code, we find that a period of more than two years has elapsed since the acquittal of the accused-respondents by <ORG>. It would, in the circumstances, be appropriate if the extreme penalty for the offence under section 302 Indian Penal Code is not exacted from the accused-respondents. We, therefore, :sentence- the accused-respondents for the offence under section 302 Indian Penal Code to imprisonment for life. The sentences imposed upon the accused-respondents for the offences under section 302 read with section 34 , section 307 and section 307 read with section 34 Indian Penal Code are maintained. The sentences of each of the accused- respondents would run concurrently, V.P.S.

Appeal allowed.


<NAME>, J.

1. The matter relates to penalty proceedings taken with reference to the assessment year 1963-64. The assessee filed a return of income on March 16, 1964, disclosing a total income of Rs. 27,566 which comprised the following items :

Rs.

Income from property Income from personal business 21,655 Share income from the firm of M/s. Murugan Talkies 5,776 27,556

2. Subsequently, on February 7, 1968, he filed a second return of income which showed the following position :

Rs.

Income from property Income from personal business 69,143 Share income from firm 5,776 75,044

3. The Income-tax Officer completed the assessment on December 31, 1968, on a total income of Rs. 3,15,201, which consisted of :

Rs.

Income from property 1,347 Income from business 3,13,854 3,15,201

4. The business income of Rs. 3,13,854 was made up of share income from Messrs Murugan Talkies of Rs. 2,769 (income other than property income) and Rs. 1,440, (income from " local business ") and income from export and import business of Rs. 3,09,645. The Income-tax Officer noted the following facts in computing the business income at Rs. 3,09,645.

(i) The assessee had exported handloom goods for Rs. 1,22,370 to Ceylon and the entire export value was remitted to India during the year in question. Though the assessee had estimated a profit of 5% on such exports in his letter dated February 5, 1968, in his subsequent letter dated November 20, 1968, the assessee claimed that if premia on import licences were to be estimated with reference to market quotations, then export loss should be allowed.

(ii) The assessee had not led in any evidence that there was a loss in export business. Hence, it had to be taken that there was no profit or loss on exports.

(iii) As regards the import licences (art silks and dyes) the assessee admitted that these licences were sold instead of being utilised ; but the exact price for which licences were sold was not made available. The assessee had estimated the premium at 60% on art silk licences and at 30% on dyes licences. But, taking into account the market quotations, the total sale value of these licences had to be taken at Rs. 3,09,645.

(iv) In the absence of any evidence for expenditure incurred on the sale of these licences, the entire sum of Rs. 3,09,645 had to be adopted as net income on the sale of these licences. There were hundi loans in the name of some Madras bankers, the peak of which amounted to Rs. 2,55,000. All the licences could have been sold by December, 1962. There was, therefore, clear evidence that the bogus credit of Rs. 2,55,000 should be out of art silk licence.

5. Thus, the total business income was estimated at Rs. 3,13,854. The Income-tax Officer initiated proceedings under Section 271(1)(c) of the Income-tax Act, 1961, hereinafter referred to as " the Act ". By way of reply to the notice issued by the Inspecting Assistant Commissioner, who proposed to impose penalty on the assessee, the contention of the assessee was that a petition under Section 271(4A) of the Act had been filed by the assessee along with the second return of income and that the same should be taken into consideration. It was also pointed out that the assessment had been taken on appeal and that the assessee had made a claim therein for a deduction of 50% of the licence value of the import licences in question towards middleman's profit and had also claimed loss on export remittances which were being allowed in other similar cases and that if these claims were to be allowed, the income determined would get reduced by about Rs. 1,50,000. The Inspecting Assistant Commissioner did not see any merit in these submissions and he levied the penalty in question mainly for the following reasons :

(i) In the second return filed by the assessee on February 7, 1968, a further income of about Rs. 48,000 relatable to the assessee's trafficking in import licences was disclosed. Concealment had to be adjudged with reference to the return originally filed and with reference to the revised return. Hence, the assessee was guilty of concealment.

(ii) Even the revised return was only an understatement because it did not clearly set out the basis on which the profit on sale of licences had been computed and what deductions had been claimed for expenses and on what basis. The assessee cannot, therefore, justifiably complain against the estimate adopted by the Income-tax Officer.

(iii) The records showed that it was only after the Income-tax Officer started investigation into the bogus nature of the hundi transactions that the assessee came forward with a revised return, firstly, for 1962-63 and thereafter for 1963-64. The admission as to the falsity of the hundi loans came only after the hearing on February 4, 1967 in connection with the assessment proceedings for 1962-63.

(iv) In any case, the return of income having been filed after April 1, 1964, the Explanation to Section 271(1) will apply, shifting the onus to the assessee to show that the difference between the income returned and the income assessed was not due to any gross or wilful neglect or fraud on his part. The assessee failed to discharge that burden and on that ground also penalty was leviable, especially in the light of the fact that as against the income of Rs. 75,044 the assessed income came to Rs. 3,09,645.

6. The assessee took up the matter on appeal to the <ORG>. Before the <ORG>, the assessee contended that after filing the original return and before any detection by the department, the assessee himself filed a petition under Section 271(4A) for the assessment year 1962-63, on February 4, 1967, and in that very petition it was stated that the hundi loans were not genuine, but brought into the books for adjustment or for cash, partly out of licence income. It was also submitted further that, in view of the fact that the import debits and the art silk cloth manufacturing operations were unreal, the books did not reflect the correct position and, therefore, the peak credit thereof would not be a proper indication of the undisclosed income. The assessee also contended that in that petition itself he had declared an income of Rs. 75,078 being the profit on sale of import licences. Similarly, for the assessment year in question, that is, for 1963-64, the assessee had mentioned in his letter dated February 5, 1968, full details about the licence and, therefore, it was made before any detection. The <ORG> held that the assessee filed the revised return before the Income-tax Officer started investigation into the bogus nature of the hundi transactions of the assessee in the course of the assessment for 1962-63. The <ORG> also held that, in view of the revised return, there was no concealment of income by the assessee and for that purpose referred to the decision of this court in <CITATION> . The <ORG> further held that the Explanation to Section 271(1)(c) of the Act could not be invoked in so far as the assessment year 1963-64 was concerned, because it was put on the statute book only from April 1, 1964. On these findings and conclusions, the <ORG> cancelled the penalty imposed on the assessee. It is the correctness of this order that is challenged by the Commissioner of Income-tax, Madras (Central), Madras, who applied for and obtained a reference on the following question, arising out of the order of the <ORG>, for the opinion of this court :

"Whether, on the facts and in the circumstances of the case, <ORG> was right in holding that the assessee had not concealed the income or furnished inaccurate particulars of income and in cancelling the penalty of Rs. 47,500 levied under Section 271(1)(c) of the Income-tax Act, 1961 ?"

7. Section 271 of the Act dealing with the levy of penalty in so far as it is relevant reads as follows :

"271. (1) If the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person......

(c) has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty.......

(iii) in the cases referred to in Clause (c), in addition to any tax payable by him, a sum which shall not be less than twenty per cent. but which shall not exceed one and a half times the amount of the tax, if any, which would have been avoided if the income as returned by such person had been accepted as the correct income."

8. By Section 40 of the Finance Act, 1964, with effect from April 1, 1964, the following Explanation was introduced :

" Where the total income returned by any person is less than eighty per cent. of the total income (hereinafter in this Explanation referred to as the correct income) as assessed under Section 143 or Section 144 or Section 147 (reduced by the expenditure incurred bona fide by him for the purpose of making or earning any income included in the total income but which has been disallowed as a deduction), such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of Clause (c) of this sub-section. "

9. We shall now consider the meaning of the above statutory provision with reference to the facts of this case. As we have pointed out already the first return was filed by the assessee on March 16, 1964, in which he disclosed a business income of Rs. 27,431. Subsequently, the second return was filed by the assessee on February 7, 1968, in which he disclosed a business income of Rs. 74,919. By an order dated December 31, 1968, the Income-tax Officer arrived at the business income of Rs. 3,13,854. It would appear from the order of the <ORG> that the <ORG> had reduced the income so assessed, on appeal preferred by the assessee. But there is no material to show as to what was the final business income determined by the <ORG>. The further fact is that the assessee himself admitted that he had filed a petition under Section 271(4A) of the Act before the Commissioner of Income-tax, wherein he stated that the credits found in his accounts were bogus, that his account books could not be relied upon and that he had not utilised the import licences, but had sold them away. From the above facts, it is clear that the assessee had concealed his income both in the first return filed on March 16, 1964, and in the second return filed on February 7, 1968.

10. The only other question for consideration is whether the said concealment will come within the scope of the provision in Section 271(1)(c) of the Act which we have extracted already or not. The section uses the expression " has concealed the particulars of his income. " It is implicit in the word " concealed " that there has been a deliberate act on the part of the assessee. The meaning of the word " concealment " as found in Shorter Oxford English Dictionary, third edition, volume I, is as follows :

" In law, the intentional suppression of truth or fact known, to the injury or prejudice of another. "

11. Consequently, there can be no doubt, with reference to the facts stated above, that both in the first return as well as in the second return the assessee had intentionally and deliberately concealed the particulars of his income.

12. The question then for consideration is whether the fact that the assessee filed a petition before the Commissioner under Section 271(4A) of the Act and also filed a second return on February 7, 1968, will be sufficient to absolve him from liability to penalty under Section 271(1)(c) of the Act.

We may mention in this context that even in the second return the assessee had not given the true particulars of income and this is made clear by the assessee's own stand that if some of the claims put forward by him with reference to import licences had been admitted, the income determined would get reduced by about Rs. 1,50,000. As we have pointed out already the income determined by the Income-tax Officer was Rs. 3,13,854. If that incomers reduced by Rs. 1,50,000 still the income from business would be Rs. 1,63,854 which is certainly not the one returned by the assessee in the second return filed on February 7, 1968. Therefore, in whichever way the matter is looked at, still the assessee had concealed particulars of his income in both the returns. Hence, we are of the opinion that the assessee cannot escape from liability to penalty under Section 271(1)(c) of the Act.

13. Considerable stress appears to have been laid on the assessee's filing the second return on February 7, 1968. We are of the opinion that the filing of the second return by the assessee is not of any consequence against the background of the facts set out above.

14. Section 139 of the Act deals with filing of the return and Sub-section (5) of that section states :

" If any person having furnished a return under Sub-section (1) or Sub-section (2), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the assessment is made. "

15. In our opinion, Section 139(5) will apply only to a limited category of cases, namely, where in the original return there was any omission or any wrong statement. The very word " omission " connotes an unintentional act. Equally, the words " wrong statement " will not take in " a statement known to be false to the person who made the Statement. " However, the word " discovers " occurring in Section 139(5) will make it clear that at the time of discovery only, a person who has furnished a return finds out that an inadvertent omission or an unintended wrong statement had crept. in the return filed by him. If a person who furnished the return was aware of the falsity of the statement and the incorrectness of the particulars of income even at the time when he filed the original return, there was no question of that person subsequently discovering the existence of the omission or creeping in of the wrong statement in the return already filed by him. Therefore, we are of the opinion that Section 139(5) will apply only to cases of " omission or wrong statements " and not to cases of " concealment or false statements ". This conclusion of ours derives support from the language used in Section 139(5) .

16. As far as the present case is concerned, the second return filed by the assessee on February 7, 1968, whether the same was filed before any investigation was started by the income-tax department or after the investigation was started by it, will not be a revised return as contemplated by Section 139(5) of the Act. All that can be stated is that if, after having filed the return on March 16, 1964, the assessee furnished further particulars to the Income-tax Officer with reference to his income, "the Income-tax Officer was certainly bound to take note of those particulars, as he was bound to take note of the particulars even if they were furnished by a third party. Therefore, the fact that the assessee furnished the second return on February 7, 1968, even before any investigation was started by the income-tax department cannot be of any assistance to him, if the case does not fall within the scope of Section 139(5) of the Act. As a matter of fact, whether the assessee furnished the particulars before any detection was made by the department or not may be relevant only when the Commissioner is considering the question as to whether the minimum penalty imposable under Section 271(1) should be waived or reduced, on an application made by an assessee under Section 271(4A) of the Act, because Section 271(4A)(ii)(a) expressly states that the Commissioner may, in his discretion, reduce or waive the amount of minimum penalty imposable on a person under Clause (iii) of Sub-section (1), if he is satisfied that such person has, prior to the detection by the Income-tax Officer, of the concealment of particulars of income in respect of which the penalty is imposable, or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars. However, such considerations are foreign to the scope of Section 271(1)(c) of the Act. Consequently, we are of the opinion that the <ORG> was in error in holding that there had been no concealment of particulars of income in the present case.

17. <CITATION>  6 ITC 58 (Mad) [FB] is a decision of this court dealing with the corresponding provisions, namely, Section 28(1)(c) of the Indian Income-tax Act, 1922, hereinafter referred to as " the 1922 Act ". In that case, the assessee made a return of his income on August 22, 1928. That return was incorrect to the extent of Rs. 34,327. After the assessee had made the return, the Income-tax Officer, while examining some other accounts made certain discoveries and in the beginning of January, 1929, he appeared to be on the point of discovering this deliberate and fraudulent omission of the assessee. Faced with this impending discovery, the assessee filed a revised return on January 7, 1929, purporting to be under Section 22(3) of the 1922 Act, corresponding to Section 139(5) of the Act. The Income-tax Officer assessed the assessee to income-tax on his revised return, but at the same time inflicted on him a penalty of Rs. 2,000 under Section 28 of the 1922 Act owing to the concealment of income. It was this act of the assessee which led to the levy of penalty which came up to this court. This court observed (page 62) :

" It is argued here that the assessee discovered on the 7th January, 1929, that his previous return was an inaccurate one and that he was, therefore, entitled to claim the benefit of Section 22(3) and make a revised return and as that has been accepted no penalty can be inflicted upon him for having concealed his income. That certainly is the correct statement of what an assessee is entitled to do, if he makes a bona fide discovery that he has made a previous incorrect return but it certainly does not apply to the facts of this case which show clearly that the previous return was deliberately dishonestly made. It is seriously argued that, notwithstanding that fact, the assessee is still enabled to put in a return correcting his former inaccurate one and that he is to be absolved from liability to have any penalty inflicted upon him. That, it seems to me, is to put a premium on dishonesty and nowhere in the Income-tax Act do we find any provision which does anything of the kind. The contention that this was a discovery within the meaning of Section 22(3) is of course futile. As the Income-tax Commissioner points out in his order of reference the assessee did not discover on that day that he had made an incorrect return because at the time when he made his previous return he knew it was incorrect and he could not at any subsequent time have discovered something which he knew at an "earlier time. Under these circumstances, the income-tax authorities were perfectly correct and within their rights in inflicting the penalty upon the assessee."

18. Ayyasami Nadar & Bros. v. Commissioner of Income-tax [1956] 30 ITR 565 (Mad) is another decision of this court dealing with the corresponding provision of the 1922 Act. In that case, after the assessee filed his return, the assessee examined himself before the Income-tax Officer and in the course of his examination he conceded that certain items of credit which were shown as if the moneys belonged to outsiders were really his own moneys and the profits of the business. On this statement, the assessment was completed and penalty proceedings were initiated. The argument that was advanced on behalf of the assessee was (page 567) :

"...that as the assessee had a right to submit a revised return of his income--and his admission before the Income-tax Officer should be taken as such revised return--there was no concealment of the particulars of his income in this notionally revised return."

19. Dealing with that argument, the court stated (page 567) :

" We consider that there is no substance in this point particularly in view of the finding of the income-tax authorities, that the admission by the assessee was made after the Income-tax Officer had come to know of the facts, and that in the circumstances h" was forced to admit these facts. Even apart from this, we consider that Section 28(1)(c) would be attracted if there had been a deliberate concealment of particulars in any return, and in the circumstances of the present case it is clear that the original return did not disclose considerable portions of the income and the finding is that the concealment was deliberate."

20. <CITATION>  32 ITR 569 (Bom) <ORG>, in dealing with Section 28(1)(c) of the 1922 Act, held that the return that had to be taken into account under Section 28(1)(c) of the 1922 Act was the return which if accepted would have avoided tax and which was not accepted and that, therefore, the penalty had to be calculated on the basis of the original return and the <ORG> erred in holding that" the revised return subsequently filed had to be taken into account and that the assessee was not liable to penalty.

21. <CITATION>  32 ITR 677 (Bom) <ORG> again, dealing with Section 28(1)(c) of the 1922 Act pointed out (page 680) :

" Now, Mr. <NAME> on behalf of the assessee, in the first instance, has argued that every assessee has a right to file a revised return under Section 22 , Sub-section (3), and if that return is in effect accepted, the earlier return must be treated as cancelled for all purposes and no penalty can be imposed in respect of any concealment in the earlier return. Now, it is perfectly true that every assessee has the right under Section 22 , Sub-section (3), to submit a revised return if he discovers any omission or wrong statement in his original return before the assessment is made. But the omission or wrong statement may be accidental or deliberate. Where it is accidental, no result may ensue by reason of the omission; but where the omission is deliberate,.the results of such deliberate omission cannot be got rid of merely by filing a revised return."

22. <CITATION>  52 ITR 591 (Mad) is yet another decision of this court dealing with Section 28(1)(c) of the 1922 Act. In that judgment, this court observed (page 596) :

" If an assessee, therefore, makes a false return knowing it to be false, the fact that he subsequently discloses the true particulars of income can not prevent the application of the section which is intended to punish fraud or contumacy on the part of the assessee. Indeed in such a case it would not oven be open to the assessee to submit a revised return : see <NAME> v. Commissioner of Income-tax [1931] 6 ITC 58 (Mad) [FBJ. The point, therefore, is not whether all the particulars were given at the time of the return or at or before the assessment, but whether at any time the assessee deliberately concealed particulars or gave false particulars.

That obviously is a question of fact. In the decision of the question certain tests are applied to find whether the suppression, etc., was deliberate.

Where for example the original return is incorrect, but the assessee volun tarily submits the correct return before the assessment, the <ORG> would be justified in coming to the conclusion that there was no concealment. This would be so even if the assessee put forward a false ease after giving voluntarily the particulars. But where the disclosure was under circum stances which make it not a voluntary act of the assessee, there would be a justification for the finding that there was a concealment because there was an intention to conceal and actual concealment at the beginning, the attempt having been frustrated by other causes. It cannot, therefore, be held that wherever particulars are given before the actual assessment, there would be no concealment."

23. After referring to the decision in <CITATION>  30 ITR 565 (Mad), to which we have already drawn attention, this court observed  52 ITR 591, 597 (Mad) :

" It follows that, if the assessee, at the time of submitting the original return intended to conceal a part of his income or deliberately gave false particulars at that time, the mere fact that he subsequently rectified the omission by giving the full particulars would not avoid the applicability of Section 28(1)(c) ."

24. We may point out, with respect, that there would appear to be a mixing up of two things--(1) the act of filing of the subsequent return giving full particulars of the income, while in the original return the assessee had deliberately furnished inaccurate particulars of income, and (2) the stage and the time at which the subsequent return was filed, namely, whether it was done voluntarily or at the time when the department had probed into the matter and was at the point of discovering the concealment made by the assessee.

25. As we have pointed out already, the second aspect will have no relevancy whatever to a case where there was concealment in the original return, because the concealment must necessarily imply a deliberate and intentional act, on the part of the assessee. After having originally concealed the income, if an assessee subsequently files a fresh return voluntarily before the income-tax department has made any investigation or detected concealment of income, even then he cannot escape from the consequence of his having concealed the income and he will be liable to penalty. If, on the other hand, the defect in the original return was merely an inadvertent omission or unintended wrong statement, certainly the assessee had a right to have the same corrected and to file a revised return under Section 22(3) of the 1922 Act or under Section 139(5) of the Act and whether the assessee so files a revised return voluntarily or after the Income-tax Officer has noticed the omission or wrong statement will be totally immaterial.

26. Our attention was drawn to a decision of <ORG> in, <CITATION> . In that case, the conclusion of the court was (page 44) :

"......... there is hardly any circumstance which goes to prove culpable negligence or wilful omission on the part of the assessees so as to suggest that their conduct in not giving correct particulars in their returns was deliberate."

27. In view of this particular finding of the court on the facts of that case, that decision does not advance the case any further.

28. <ORG> in <CITATION>  102 ITR 408 (Gauhati) had occasion to deal with the scope of Section 139(5) and Section 271(1)(c) of the Act. After referring to the provisions of Section 139 including Sub-section (5) thereof, the court observed (page 418) :

" If after having furnished the return the assessee discovers that some omission has taken place or some wrong statement has crept in in the return, he may file a revised return wherein he may correct the omission or the wrong statement made in the original return. Sub-section (5) further provides that in order to enable an assessee to file a revised return as contemplated under Sub-section (5) the omission or wrong statement that might have occurred or crept in in the original return, must be discovered by the assessee himself. In other words, if after examining the return and accounts in the proceedings the discovery of the omission or wrong statement is made by the departmental authority and thereafter the revised return purported to be under Sub-section (5) is filed, that will not be considered as a revised return under Sub-section (5). As a proposition of law it may be correct that if a revised return as contemplated under Sub-section (5) is submitted before the assessment is made after the assessee having discovered some omission or some wrong statement in the original return and in the revised return he makes correction of the omission or the wrong statement, a penalty proceeding for concealment of the particulars of income or furnishing inaccurate particulars of such income as contemplated under Clause (c) of Sub-section (1) of Section 271 may not be attracted. But, to avoid the penalty proceeding as contemplated under Section 271(1)(c) by reason of submission of revised return, the revised return itself must be within the correct ambit and scope of Sub-section (5) of Section 139 of the Act. If it cannot be said that a revised return in fact does come within the correct ambit and scope of Section 139(5) , then immunity from Section 271(1)(c) cannot be availed of by the assessee."

29. If we may say so with respect, we entirely agree with the above observations of <ORG>. We may also point out that the liability to penalty under Section 271(1)(c) of the Act and the filing of a revised return under Section 139 of the Act are mutually exclusive. Section 139 of the Act proceeds on the basis of omission or wrong statement which had crept into the original return being inadvertent and unintentional, while Section 271(1)(c) of the Act proceeds on the basis of concealment being deliberate and the furnishing of inaccurate particulars being wilful and intentional. Consequently, if a case falls within the scope of Section 139(5) of the Act, there would be no chance for levy of penalty under Section 271(1)(c) of the Act. If, on the other hand, the case does not fall within the scope of Section 139(5) of the Act the fact that the asgessee purported to file a revised return will not absolve him from liability to penalty under Section 271(1)(c) of the Act, if he had concealed particulars of income or deliberately furnished inaccurate particulars of income in the original return already filed by him.

30. Now, it remains for us to consider the decision of this court in <CITATION>  77 ITR 276 (Mad) referred to already and relied on by the <ORG> itself. The facts of that case lie within a very narrow compass. For the assessment year 1952-53, the assessee which was an unregistered firm carrying on business in drugs and chemicals filed a return of income on September 11, 1952, disclosing a net profit of Rs. 54,107. The Income-tax Officer felt that the gross profit disclosed by the assessee was too low. He also scrutinised the account books of the assessee and discovered certain discrepancies. He further discovered huge deposits amounting to Rs. 2,79,112 in the bank accounts of some of the partners of the firm. When called upon to explain these discrepancies and the deposits, the partners representing the assessee-firm explained that there were some differences between the partners, that partners Nos. 4 and 5 were carrying on business in the same line in contravention of the partnership, that in order to offset extra profits, the remaining partners had prepared bills showing lesser sale price than the actual sale price and deposited the extra sale proceeds in the names of its three partners and that remittances to Messrs. <ORG> were made with the extra cash, but the entries were postponed to dates when the cash balance as per the cash book maintained were sufficient to accommodate the remittances already made. The assessee-firm sent a letter dated May 16, 1953, stating that the profit actually made by the firm during the relevant year amounted to Rs. 82,725 and on June 6, 1953, the assessee-firm actually filed a revised return disclosing the said income of Rs. 82,725. It is against the background of these facts, the question came to be considered whether the assessee was liable to penalty under Section 28(1)(c) of the 1922 Act or not. The <ORG> held that the assessee was not liable to penalty. After referring to the earlier decisions, this court referred to the facts as stated above and stated (page 290) :

" The <ORG> took the view that, as the assessee has made a true disclosure of his income in the revised return before the assessment is completed, the assessee cannot be said to have deliberately concealed the true income. Normally, whether there was a deliberate concealment of income or not is a question of fact and the <ORG> has, on the facts and circumstances of this case, held that the assessee had not deliberately concealed income and that, therefore, the penalty levied under Section 28(1)(c) was not justifiable. The <ORG> felt that merely because the assessing and appellate authorities made an addition to the income on the basis of an estimate of the gross profit, it will not lead to the inference that there was deliberate concealment of income on the part of the assessee in the revised return. We are not in a position to say that the assessment of the evidence in the case by the <ORG> and its conclusion thereon is in any way vitiated. We are also of the view that the explanation offered by the assessee for not disclosing the sum of Rs. 28,618 in the first return is possible of acceptance and in the face of such acceptable explanation, a deliberate intention on the part of the assessee-firm to conceal the income cannot be inferred. "

31. From the above extract from the judgment and also the facts to which we have drawn attention, it is clear that that decision was rendered on the particular facts of that case and the judgment itself makes that clear. Since the assessee in that case had offered an explanation as to why certain amount was not disclosed in the original return filed and that explanation was accepted by the <ORG> and the court, the finding was that there was no deliberate intention to conceal the income. In view of this specific finding with reference to the facts of that case, we cannot hold that this decision of this court takes a view different from the legal position emerging from the other decisions to which we have already drawn attention.

32. In the course of the said decision, this court observed (page 289) :

" We are, at the same time, not willing to accept the contention put forward on behalf of the revenue that the filing of the second return is of no consequence at all, while considering the liability of the assessee under Section 28(1)(c) of the Act. As expressed by this court in Sivagaminatha. <CITATION>  52 ITR 591 (Mad), it is not possible to construe the original return alohe in isolation without reference to the assessee's conduct subsequent to the filing of the original return. We are of the view that all the facts and circumstances commencing with the filing of the original return and ending with the assessment may be taken as relevant for considering the assessee's liability for penalty under Section 28(1)(c) . "

33. We are of the opinion that the above observation has to be understood against the background of the facts of that case. As a matter of fact, all the facts and circumstances commencing with the filing of the original return and ending with the assessment may be taken as relevant for con sidering whether the assessee had concealed particulars of income or furni shed inaccurate particulars of income, as contemplated by Section 28(1)(c) of the 1922 Act and only when there is a finding that the assessee had con cealed particulars of income or deliberately furnished inaccurate particulars of income in the original return, the question as to his liability to penalty will arise.

34. The last decision is that of <ORG> in <CITATION>  100 ITR 524 (Guj), which avowedly dealt with the Explanation to Section 271(1)(c) of the Act intro duced with effect from April 1, 1964. In the course of the judgment, that decision merely referred to the decision of this court in <CITATION> , and extracted a portion of the head-note to that decision as reported in the Income Tax Reports. That decision dealing with the Explanation has not taken a view-

different from the one which we have indicated as flowing from the decisions we have discussed.

35. In view of the conclusion of ours, it is unnecessary to consider whether the Explanation to Section 271(1)(c) of the Act introduced with effect from April 1, 1964, is attracted or not to the facts of this case.

36. Consequently, we answer the question referred to this court in the negative and against the assessee. Since the <ORG> held that the assessee was not liable to penalty at all, it did not go into the quantum of the penalty and in view of our present decision the <ORG> will have now to go into the quantum of penalty. There will be no order as to costs.

37. The assessee was not represented before us and, therefore, we requested Mr. <NAME>, Advocate, to assist us as amicus curiae and he has drawn our attention to all the relevant decisions bearing on the question in issue and we record our appreciation of the assistance rendered by him.


PETITIONER: <NAME> Vs. RESPONDENT:

STATE OF U.P. & ORS.

DATE OF JUDGMENT08/04/1988 BENCH:

VENKATARAMIAH, E.S. (J) BENCH:

VENKATARAMIAH, E.S. (J) OJHA, N.D. (J) CITATION:

1988 AIR 1089 1988 SCR (3) 469 1988 SCC (2) 415 JT 1988 (2) 46 1988 SCALE (1)663 ACT:

U.P. Industrial Disputes Act, 1947-Challenging Constitutional validity of sub-section (4) of section 6 of- Also validity of Order of Government of Uttar Pradesh remitting award passed by <ORG> for reconsideration.

HEADNOTE:

% In this appeal, the appellant questioned the constitutional validity of sub-section (4) of section 6 of the U.P. Industrial Disputes Act, 1947 ('The Act') and also the validity of the order passed by the <ORG>. remitting the award passed by <ORG> for reconsideration by it.

The appellant was an employee of respondent <ORG>, Meerut. The services of the appellant were terminated by the Management of the said respondent. The termination of services led to an industrial dispute. <ORG> under section 4-K of the Act referred the said dispute for adjudication of <ORG>, Meerut. <ORG> passed an award and forwarded it to <ORG>. Instead of publishing the award in <ORG>, as required by sub- Section (3) of section 6 of the Act, <ORG> passed an order under section 6(4) of the Act, remitting the award for reconsideration. The appellant submitted before <ORG> that he did not want any re-consideration of the award. On 7.2.1985, the Management filed an application saying that the case might be fixed for hearing after two months. The appellant opposed the application. The case was adjourned to 11.3.85 and on 11.3.85 to 26.3.85 at the further request of the management. In the meanwhile, the management moved <ORG> to transfer the case from <ORG>, Meerut, to <ORG> or <ORG>. The State Government passed an order transferring the case to <ORG> Meerut. Aggrieved by the order, remitting the award to <ORG> and the subsequent order, transferring the case to <ORG>, the appellant filed a writ petition in <ORG>, challenging the above said two orders. <ORG> dismissed the writ petition in respect of the order made under section 6(4) of the Act, but set aside the order of transfer. Aggrieved by the judgment of <ORG>, upholding the order passed under section 6(4) of the Act, the appellant filed this appeal in this Court for relief by special leave.

Allowing the appeal, the <ORG>, ^ HELD: By leave of the <ORG>, the appellant raised an additional ground before the <ORG>, questioning the constitutional validity of sub-section (4) of section 6 of the Act itself, and the <ORG> first took up for consideration the question relating to the constitutional validity of sub-section (4) of section 6 of the Act. [476B-C] The questions raised before the Labour <ORG> were very simple ones. They had no effect on the national economy. They did not in any way interfere with the principles of social justice. No grave consequences would have ensued if the award had been published in the Official Gazette and the parties, allowed to question its validity before the High <ORG> under Article 226 of the Constitution of India or before the Supreme <ORG> under Article 136 of the Constitution. The parties had not been given notice by <ORG> to show cause why the award should not be remitted to the Labour <ORG> for a fresh consideration. The order of <ORG> also did not state why and on what points <ORG> was not satisfied with the award and the questions on which the Labour <ORG> was required to reconsider its award. [479G-H; 480A-B] When once a decision is given by a quasi-judicial authority, it would not be safe to confer on any executive authority the power of review or remission in respect of the said decision without imposing any limitation on the exercise of such power, Even when a <ORG> is conferred the power of review, such power can be exercised ordinarily under the well-known limitations as are found in Order 17 of the Code of Civil Procedure. Similarly, under section 16 of the Arbitration Act, 1940, the power to remit an award to the Arbitrator can be exercised by a Civil <ORG> only under the circumstances specified in that connection. Sub-section (4) of section 6 of the act imposes no such limitations. [482C-D] The argument of <ORG> that it was open to <ORG> to seek necessary guidance from the object and contents of the Act, and that <ORG> could remit the award to the Labour <ORG> only for a reason which was germane to the statute in question, was not of any assistance to <ORG> in this case because even though the reason for remitting the award may be a reason connected with industry or labour, it can still be used arbitrarily to favour one party or the other. The ground for remitting the award should be one corresponding to a ground mentioned in section 16 of the Arbitration Act, 1940; otherwise the power is capable of serious mischief. The facts in this case themselves serve as a good illustration of the above proposition. There were only two main issues for consideration before the Labour <ORG>: (1) whether the appellant was a workman, and (2) whether his services had been validly terminated. The Labour <ORG> had recorded its findings on both the issues in favour of the appellant. From the prayers made before the Labour <ORG> after the case had been remitted to it, it is seen that the <ORG> wanted to adduce additional evidence before the Labour <ORG> in support of its case. It was not the case of the <ORG> that the Labour <ORG> had unreasonably refused permission to the <ORG> to adduce all its evidence before the award was passed. It was not even a case where industrial peace was likely to be disturbed if the award had been implemented as it was. The award would not have also affected prejudicially either national economy or social justice. In the above circumstances, it would not certainly be proper for <ORG> to make an order remitting the award. <ORG> in this case could do so because it had been entrusted with such unguided power under section 6(4) of the Act. [482E-H; 483A-C] It was urged by counsel for <ORG> that sub- section 4 of section 6 of the Act needed not to be struck down but the <ORG> might direct that <ORG> should give a hearing to the parties before an order was passed under section 6(4) , remitting the award, and also require <ORG> to give reasons in support of its order. The <ORG> did not think that this was an appropriate case where the impugned provision could be upheld by reading into it the requirement of issuing notice to the parties and the requirement of giving reasons for its orders. The provisions could not be upheld in the absence of necessary statutory guidelines for the exercise of the power conferred by it, having regard to the fact that the proceeding before the Labour <ORG> or <ORG> is in the nature of quasijudicial proceeding where parties have adequate opportunity to state their respective cases, to lead evidence and make all their submissions. It is significant that the corresponding Act which is in force in the other parts of India, i.e., the Industrial Dispute Act, 1947 (Central) Act XIV of 1947) does not contain any provision corresponding to section 6(4) of the Act, and the absence of such a provision in the Central Act has not led to any serious inconvenience to the general public. [483D-F] The <ORG> could not derive much assistance from the decision of this <ORG> in the <CITATION> . 2 SCR 448 as in this case there was no settlement arrived at between the appellant and the <ORG>, which made the publication of the award unnecessary. [484H; 485F] There was one other good reason for taking the view that without any guidelines it will not be appropriate to confer power on <ORG> to nullify virtually the effect of an award by exercising its power under section 6(4) of the Act. The Act applies not merely to disputes arising between private management and labour unions and the workmen employed by them but also to industries owned by <ORG> and their workmen. In the cases where the <ORG> is the owner of the industry, it would be inappropriate to confer uncontrolled and unguided power on <ORG> itself to remit the award passed on the industrial disputes arising in such industries for there is every chance of the power being exercised arbitrarily in such cases. The danger of entrusting unguided and uncontrolled power to remit an award for reconsideration of the Labour <ORG> or <ORG> can very well be perceived, particularly where the award has gone against <ORG> in a dispute arising out of an industry owned by it. The sub-section (4) of section 6 of the Act, which is so widely worded is, therefore, likely to result in grave injustice to a party in whose favour an award is made as the said provisions can be used to reopen the whole case. The <ORG> did not agree with the view expressed by the High <ORG> of Allahabad in V.E. Thamas & Ors. v. State of Uttar Pradesh & Ors.,  Allahabad Law Journal 1118, in which the validity of sub-section (4) of section 6 of the Act had been upheld. [485F-H; 486G-H; 487C-D] Taking into consideration all the aspects of the case, including the object with which the Act was enacted, the <ORG> felt that sub-section (4) of section 6 of the Act was violative of Article 14 of the Constitution of India as it conferred unguided and uncontrolled powers on <ORG>. The <ORG> declared sub-section (4) of section 6 of the Act as unconstitutional and struck it down. It followed that the order passed by <ORG>, remitting the case for reconsideration by the Labour <ORG> was also liable to be set aside. <ORG> was directed to publish the award under section 6(3) of the Act. On publication of the award, it was open to any of the parties aggrieved by the award to resort to such remedies as might be available to it in law. [487H; 488A-C] Messrs. <CITATION> and two others,  S.C.R. 803; <CITATION> .,  SCR 1191; <ORG> JUDGMENT:

448; <CITATION> .,  1 S.C.C. 362 and <ORG> Mazdoor Sangh & Ors. v. <ORG> Ltd., Saharanpur & Ors.,  Allahabad Law Journal 71, referred to.

V.E. Thamas & Ors. v. State of Uttar Pradesh and Ors., [1978] <ORG> 1118, disapproved.

& CIVIL APPELLATE JURISDICTION: Civil Appeal No. 864 of 1987.

From the Judgment and Order dated 23.5.1986 of <ORG> in C.M.W.P. No. 13975 of 1985.

<NAME> and <NAME> for the Appellant. <NAME>, <NAME>, <NAME>, Mrs. <NAME>, <NAME>, <NAME> and <NAME> for the Respondents.

The Judgment of the Court was delivered by <NAME>, J. The appellant has questioned in this appeal by special leave the constitutional validity of sub- section (4) of section 6 of the U.P. Industrial Disputes, Act, 1947 (hereinafter referred to as 'the Act') and also the validity of the Order dated December 5, 1984 passed by <ORG> remitting an award passed by <ORG>, Meerut for reconsideration by it.

The appellant was an employee of <ORG>, Meerut-Respondent No. 5 in the above appeal. The services of the appellant were terminated by the <ORG> by its Order dated April 4, 1977 and the said termination led to an industrial dispute. <ORG> by its Order dated May 5, 1979 made under section 4-K of the Act referred the said dispute for adjudication to <ORG>, Meerut. The question which was referred to <ORG> read as follows:

"Whether the termination/removal from work of the employee <NAME> by the employers by their Order dated 4.4.1977 is justified and/or legal? If not, to what benefits/damages is the concerned employee entitled to and with what other details?"

On the basis of the pleadings filed by the parties, the following issues were framed by <ORG>:

1. Was <NAME> not a workman as defined in the U.P. Industrial Disputes Act? If so has this court jurisdiction to try this case?

2. Did <NAME> not make efforts to minimise the losses due to unemployment?

3. To what relief, if any, is <NAME> entitled?

4. Has <NAME> been retrenched? If so, how does it affect the case?

After recording the evidence adduced by the parties and hearing the arguments <ORG> held, (i) that the appellant was a workman as defined in the Act, (ii) that the termination of the services of the appellant was illegal and

(iii) that the appellant was entitled to be reinstated in his post with continuity of service and also to the payment of backwages and other benefits. <ORG> accordingly passed an award on August 2, 1984 and forwarded it to <ORG>. Instead of publishing the award in the Official Gazette, as required by sub-section (3) of section 6 of the Act, <ORG> passed an Order dated December 5, 1984 under section 6(4) of the Act which read as follows:

"GOVERNMENT OF UTTAR PRADESH