Whether an offence u/s.276CC of the Income Tax Act, 1961 could be said to have been committed on the actual date of filing of return of income or on the day immediately after the due date for filing of returns as per s.139(1) of the Act; what is the meaning of the expression “first offence” appearing in Clause 8 of the Guidelines for Compounding of Offences under Direct Tax Laws, 2014; what amounts to voluntary disclosure for the purpose of Clause 8 of the 2014 Guidelines; whether the 2014 Guidelines are mandatory or directory in nature.

 

[2025] 2 S.C.R. 476 : 2025 INSC 155

Vinubhai Mohanlal Dobaria v. Chief Commissioner of Income Tax & Anr.

(Civil Appeal No. 1977 of 2025)

07 February 2025

[J.B. Pardiwala* and Sanjay Karol, JJ.]

Issue for Consideration

Whether an offence u/s.276CC of the Income Tax Act, 1961 could be said to have been committed on the actual date of filing of return of income or on the day immediately after the due date for filing of returns as per s.139(1) of the Act; what is the meaning of the expression “first offence” appearing in Clause 8 of the Guidelines for Compounding of Offences under Direct Tax Laws, 2014; what amounts to voluntary disclosure for the purpose of Clause 8 of the 2014 Guidelines; whether the 2014 Guidelines are mandatory or directory in nature.

Headnotes

Income Tax Act, 1961 – s.276CC – Compounding of offence – Commission of offence, when – Appellant, an individual earning income by way of salary and also share of profit of partnership firm – Delay in filing the return of income for AY 2011-12 and 2013-14 by appellant – Issuance of show cause notice to the appellant for the AY 2011-12 alleging violation of s.276CC – Application for compounding for AY 2011-12 allowed – Thereafter, the appellant received another show cause notice as regards launching of prosecution for the AY 2013-2014 – Compounding application for AY 2013-14 rejected – Writ petition by appellant that his compounding application was rejected solely on the ground that the offence alleged to have been committed by the appellant of belated filing of the return of income for AY 2013-14 was not covered by the expression “first offence” as defined in the 2014 guidelines, rejected by the High Court – Offence u/s.276CC could be said to have been committed on the actual date of filing of return of income or on the day immediately after the due date for filing of returns as per s.139(1):

Held: Offence u/s.276CC could be said to have been committed as soon as there is a failure on the part of the assessee in furnishing the return of income within the due time as prescribed u/s.139(1) – Subsequent furnishing of the return of income by the assessee within the time limit prescribed under sub-section (4) of s.139 or before prosecution is initiated does not have any bearing upon the fact that an offence u/s.276CC has been committed on the day immediately following the due date for furnishing return of income – Offence u/s.276CC could be said to have been committed on the dates immediately following the due date for furnishing the return of income for both these assessment years respectively – Date for commission of both of these offences would be the day falling immediately next to the due date for filing of return, that is 01.10.2011 for AY 2011-12 and 01.11.2013 for the AY 2013-14 – Show cause notice for the AY 2011-12 was issued to the appellant on 27.10.2014 – Offence for the AY 2011-12 could be said to have been committed on 01.10.2011 and the offence for the AY 2013-14 could be said to have been committed on 01.11.2013 – Both the offences u/s.276CC were committed prior to the date of issue of any show cause notice for prosecution – Thus, the offence as alleged to have been committed by the appellant u/s.276CC for the AY 2013-14 is covered by the expression “first offence” as defined under the 2014 Guidelines and thus, the compounding application filed by the appellant could not have been rejected – High Court erred in rejecting the writ petition filed by the appellant against the order passed by the Chief Commissioner of Income Tax rejecting the application for compounding – Impugned order passed by the High Court as well as the order passed by the Chief Commissioner of Income Tax set aside – Guidelines for Compounding of Offences under Direct Tax Laws, 2014. [Paras 35, 41-43, 69, 70, 81-83]

Income Tax Act, 1961 – ss.276CC, 279 – Failure to furnish returns of income – Compounding of Offences – Guidelines for Compounding of Offences under Direct Tax Laws, 2014 – Paragraph 8 – “First offence” – Meaning of:

Held: “First offence” is any offence committed prior to the date of issuance of any show cause notice for prosecution in relation to the said offence; or prior to any intimation relating to prosecution by the department to the person concerned or prior to the launching of any prosecution, whichever is earlier – Expression “first offence” is also defined to include any offence which has not been detected by the Department, but has been voluntarily disclosed by a person prior to the filing of an application for compounding of offence in the case under any direct tax Acts – Paragraph 8 further clarifies that the first offence would be determined separately with reference to each section of the Act under which it is committed and it would be relevant only if it is committed by the same entity – Scheme that permeates Paragraph 8 allows only those offences to be treated as the “first offence” which are committed by the assessee either prior to a notice that he is liable to prosecution under the Act for the commission of such offences or those offences which are voluntarily disclosed by the assessee to the Department before they come to be detected – Latter part of the definition of the expression “first offence” is not to curtail the scope of the first half but to expand its ambit by including those cases where the assessee comes forward on his own initiative and discloses the commission of the offence. [Paras 59-61, 73]

Guidelines for Compounding of Offences under Direct Tax Laws, 2014 – Paragraph 8 – “Voluntary disclosure” – Purpose of:

Held: Voluntary disclosure to be construed in a manner which ensures that such disclosure on part of the assessee saves the Department from the trials and tribulations of having to detect the commission of offence by the assessee by setting into motion its own machinery of detection of offences – Neither the filing of belated return of income by the assessee nor the making of an application for compounding of offence after a show cause notice has already been issued to the assessee fulfills the underlying idea of saving the Department from the inconvenience of detecting the offence – Even after a belated return of income is filed, the Department is still required to process the return, identify the cases wherein offences have been committed – Voluntary disclosure by the assessee before the stage of detection by the Department besides being economically viable also saves time and efforts on part of the Department and also ensures that the dues are recovered promptly. [Para 74]

Guidelines for Compounding of Offences under Direct Tax Laws, 2014 – Paragraphs 4, 7, 8 – Guidelines, mandatory or directory:

Held: Paragraph 4 of the 2014 guidelines provides that compounding of offences is not a matter of right of the assessee – Plain reading of the 2014 guidelines reveals that while it is mandatory that the eligibility conditions prescribed under Paragraph 7 are to be satisfied, the restrictions laid down in Paragraph 8 have to be read along with Paragraph 4 which provides that the exercise of discretion by the competent authority is to be guided by the facts and circumstances of each case, the conduct of the appellant and nature and magnitude of offence – Thus, it is clear that the restrictions laid down in Paragraph 8 are although required to be generally followed, the guidelines do not exclude the possibility that in a peculiar case where the facts and circumstances so require, the competent authority cannot make an exception and allow the compounding application. [Paras 78-79]

Guidelines for Compounding of Offences under Direct Tax Laws, 2014 – Guiding principles for the exercise of the power conferred by s.279(2) allowing compounding of offences either before or after the institution of proceedings – Explained – Income Tax Act, 1961 – s.279(2). [Paras 53-67]

Case Law Cited

Prakash Nath Khanna v. CIT [2004] 2 SCR 434 : (2004) 9 SCC 686 – relied on.

Union of India v. Banwari Lal Agarwal [1998] Supp. 2 SCR 356 : (1998) 7 SCC 652; Y.P. Chawla v. M.P. Tiwari [1992] 2 SCR 440 : (1992) 2 SCC 672; Sports Infratech P. Ltd. & Anr. v. Deputy Commissioner of Income-tax, 2017 SCC OnLine Del 6543 – referred to.

List of Acts

Income Tax Act, 1961; Penal Code, 1860; Code of Criminal Procedure, 1973.

List of Keywords

Compounding of offence; Compounding application; First offence; Actual date of filing of return of income; Due date for filing of returns; Subsequent furnishing of return of income by assessee; Failure to furnish returns of income; “Voluntary disclosure”; Guidelines for Compounding of Offences under Direct Tax Laws, 2014; Guidelines for Compounding of Offences under Direct Tax Laws, 2008; Guidelines for Compounding of Offences under Direct Tax Laws, 2019; Guidelines for Compounding of Offences under Direct Tax Laws, 2022; Delay in filing return.

Case Arising From

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1977 of 2025

From the Judgment and Order dated 21.03.2017 of the High Court of Gujarat at Ahmedabad in SCA No. 5386 of 2017

Appearances for Parties

Tushar Hemani, Sr. Adv., Ms. Dharita Purvish Malkan, Alok Kumar, Kush Goel, Suraj Pandey, Ms. Khushboo Aakash Sheth, Advs. for the Appellant.

Mrs. Monica Benjamin, Raj Bahadur Yadav, Udai Khanna, Shashank Bajpai, V C Bharathi, A K Kaul, Prahlad Singh, Advs. for the Respondent.

Judgment / Order of the Supreme Court

Judgment

J.B. Pardiwala, J.

For the convenience of exposition, this judgement is divided into the following parts:

INDEX*

A.

FACTUAL MATRIX ...................................................................................................................................................

2

B.

SUBMISSIONS ON BEHALF OF THE APPELLANT ..............................................................................................

13

C.

SUBMISSIONS ON BEHALF OF THE RESPONDENTS ........................................................................................

15

D.

ISSUES FOR CONSIDERATION ..............................................................................................................................

19

E.

ANALYSIS .................................................................................................................................................................

20

i.Section 276CC of the Income Tax Act, 1961 .......................................................................................................

20

ii.Provisions pertaining to compounding of offences ..............................................................................................

36

iii.Guidelines for Compounding of Offences under Direct Tax Laws, 2014 .............................................................

41

F.

CONCLUSION .........................................................................................................................................................

57

1.Leave granted.

2.This appeal arises from the judgment and order passed by the High Court of Gujarat dated 21.03.2017 in Special Civil Application No. 5386 of 2017 (hereinafter referred to as “the impugned order”) by which the High Court rejected the writ petition filed by the appellant herein and thereby upheld the order of the Chief Commissioner of Income Tax, Vadodara (“Respondent No. 1”) dated 14.02.2017 rejecting the application preferred by the appellant-assessee for compounding of the offence under Section 276CC of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).

A.FACTUAL MATRIX

3.The appellant is an individual earning income by way of salary and also by way of share of profit of partnership firm engaged in the business of chemicals. He filed his income tax returns for the AY 2011-12 and 2013-14 on 04.03.2013 and 29.11.2014 respectively declaring his income to be Rs 49,79,700/- and Rs 31,87,420/- respectively. The due dates for the filing of returns for AY 2011-12 and 2013-14 were 30.09.2011 and 31.10.2013 respectively and as such there was delay on the part of the appellant in filing the return of income for the said assessment years.

4.On 27.10.2014, a show cause notice was issued to the appellant by the Commissioner of Income Tax - III, Baroda alleging violation of Section 276CC of the Act for the AY 2011-12. The notice stated that although the due date for filing the income tax return for the AY 2011-12 was 01.08.2011 yet the appellant had filed the same with delay on 04.03.2013. The notice further stated that after allowing for the credit of prepaid taxes, the appellant was liable to pay self-assessment tax of Rs. 0/- which however remained unpaid by the due date prescribed for the filing of return of income. In the last, the appellant was called upon to show cause as to why proceedings under Section 276CC of the Act should not be initiated against him. The contents of the said notice are extracted hereinbelow:

“Office of the Commissioner of Income Tax III

2nd floor, Aayakar Bhavan, Race Course Circle,

Baroda 390 007

No.BRD/CIT-III/HQ/Pros/17/2014-15

Date.27.10.2014

To,

Shri Vinubhai Mohanbhai Dobaria

B-2/203, Subhlaxmi Coop. Housing Society

Ankleshwar

PAN ACIPD4420D

Sir/Sirs,

Sub:Launching of prosecution under section 276CC of the income Tax Act, 1961 Chapter XXII of the I.T.Act 1961 regd.

On examination of records, it is seen that you have furnished your return of income for the assessment year 2011-12 declaring total income of Rs.49,79,700/- on 4.3.2013. Further, after allowing credit of prepaid taxes, you were liable to pay self assessment tax of Rs.0/- by due date of filing of return. Later, your return of income was processed under section 143(1) of the Act 20.3.2013 determining demand of Rs0/- out of which Rs.0 is still pending.

2. In this context, take notice and show cause as to why proceedings under section 276CC of the Act should not be initiated against you for failure to furnish returns of income after the expiry of the assessment year. You may attend either personally or through representative duly authorized on 11.11.2014 at 12.30 p.m. If you fail to attend, it would be presumed you have nothing to say in the matter and this office shall proceed in the matter accordingly.

Yours faithfully

Sd/- S.R. Malik

Commissioner of Income Tax- III, Baroda”

5.The appellant replied to the aforesaid show cause notice along with the application for compounding in accordance with the Guidelines for Compounding of Offence, 2008 (hereinafter referred to as “the 2008 guidelines”). The application, along with application for compounding the delay in filing of return of income for two other years came to be allowed by the Respondent No. 1 vide order dated 11.11.2014.

6.Thereafter, on 12.03.2015, the appellant received another show cause notice as regards launching of prosecution under Section 276CC of the Act for the AY 2013-2014 issued by the Commissioner of Income Tax, Vadodara - III. The notice stated that the appellant had furnished the return of income for AY 2013-14 declaring a total income of Rs. 31,87,420/- on 29.11.2014 and after allowing for the credit of prepaid taxes the appellant was liable to pay self-assessment tax of Rs. 2,78,740/-. The notice further called upon the appellant to show cause as to why proceedings under Section 276CC of the Act should not be initiated against him as he had filed his return of income after the expiry of the due date. The contents of the said notice are extracted hereinbelow:

“Office of the Commissioner of Income Tax,

Vadodara -3 Vadodara

2nd floor Aayakar Bhavan Race Course Circle,

Vadodara 7

No. BRD/CIT-3/HQ/Pros/17-B/2014-15

Date.12.3.2015

To,

Shri Vinubhai Mohanbhai Dobaria

303/C/16, Tulsi Kunj Society,

Near Marathi School, GIDC,

Ankleshwar

PAN ACIPD4420D

Sir/Sirs

Sub: Launching of prosecution under section 276CC of the Income Tax Act, 1961 Chapter XXII of the I.T.Act, 1961 A.Y.2013-14 reg.

On examination of records, it is seen that you have furnished your return of income for the assessment year 2013-14 declaring total income of Rs.31,87,420/- on 29.11.2014. Further, after allowing credit of prepaid taxes, you were liable to ay self assessment tax of Rs.2,78,740/- by due date of filing of return. Later, your return of income was processed under section 143(1) of the Act on 5.1.2015.

2. In this context, take notice and show cause as to why proceedings under section 276CC of the Act should not be initiated against you for failure to furnish returns of income before expiry of the assessment year. You may attend either personally or through representative duly authorized on 19.3.2015 at 11.30 a.m. If you fail to attend, it would be presumed that you have nothing to say in the matter and this office shall proceed in the matter accordingly.

Yours faithfully

Dr. Banwari Lal

Commissioner of Income Tax

Vadodara-3 Vadodara”

7.The appellant replied to the aforesaid notice along with an application for compounding as per the Guidelines for Compounding of Offence, 2014 (hereinafter referred to as “the 2014 guidelines”). In his reply, the appellant stated that he had filed the return of income belatedly because necessary funds were not available with him to enable him to pay the assessed amount of tax. He further stated that the delay in filing of the return of income was neither deliberate nor wilful.

8.By an order dated 14.02.2017 passed under Section 279(2) of the Act, the Respondent No. 1 rejected the compounding application of the appellant. The Respondent No. 1 took the view that the case of the appellant was not fit for compounding as a committee comprising of Principal CCIT Gujarat, CCIT Vadodara, DGIT (Investigation) Ahmedabad and the CCIT - II Ahmedabad in the minutes recorded of the meeting dated 25.01.2017 had opined that the assessee had filed his return of income for AY 2013-14 after the show cause notice for the offence under Section 276CC for offence during AY 2011-12 had already been issued. Therefore, as per the committee, the offence committed by the appellant under Section 276CC for the AY 2013-14 would not be covered by the expression “first offence” as defined in the 2014 guidelines. The relevant part of the said order is extracted hereinbelow:

“The case is not found to be fit case for compounding as the Committee comprising of Pr. CCIT Gujarat and CCIT, Vadodara DGIT (Investigation) Ahmedabad and the CCIT 2 Ahmedabad, competent to consider the assessee’s petition, in its minutes of the meeting held at Ahmedabad on 25.1.2017 found that the Pr. CIT-3, Vadodara had issued show cause notice for initiating proceedings under section 276CC of the Act on 27.10.2014 for the AY.2011- 12. The assessee filed his return of income for the A.Y.2013-14 on 29.11.2014 as against the due date for filing of return on 31.10.2013, after issuance of such show cause notice for A.Y. 2011-12. Accordingly, taking into consideration the definition of “First Offence” as specified in the Board’s guidelines for compounding offence dated 23.11.2014, as well as the opinion obtained from the Board vide F.No.285/20/2014-IT (Inv.)/340 dated 15.9.2014 in the case of Chandra Knee Clinic P. Ltd. the committee unanimously opined that, the offence of similar nature committed by the assessee for A.Y.2013-14 cannot be compounded, as it does not fall within the definition of “First Offence”. Thus, the committee rejected compounding petition for A.Y.2013-14.

In view of the above facts, compounding petition filed by the assessee for A.Y.2013-14 is rejected.”

9.The appellant challenged the aforesaid order passed by the Respondent No. 1 before the High Court of Gujarat by way of Special Civil Application No. 5386 of 2017. The appellant, who was the petitioner before the High Court, contended that his compounding application had been rejected by Respondent No. 1 solely on the ground that the offence alleged to have been committed by the appellant of belated filing of the return of income for AY 2013-14 was not covered by the expression “first offence” as defined in the 2014 guidelines. The appellant further submitted that the show cause notice for the initiation of prosecution issued under Section 276CC of the Act for AY 2013–14 was issued on 12.02.2015 whereas he had already filed the return of income for the said assessment year on 29.11.2014, that is, much before the issuance of show cause notice on 12.02.2015 and therefore it could not be said that it was not the first offence. It was also contended by the appellant that the respondent had erroneously computed the date of issuance of show cause notice for AY 2011-12 for the purpose of holding that the appellant had committed the offence post that date. Lastly, it was argued by the appellant that the 2014 guidelines are only general guidelines and are not in the nature of strict law and thus are to be construed accordingly. The appellant submitted that the general nature of the guidelines was also suggested by the heading “offences generally not to be compounded” used in the said Guidelines.

10.However, the High Court rejected the Special Civil Application of the appellant vide the impugned judgment and order dated 21.03.2017 taking the view that the contention of the appellant was based on a misreading of the Clause 8(ii) of the 2014 guidelines. The High Court held that although the show-cause notice for AY 2011-12 was issued on 27.10.2014, yet the appellant filed the return of income for the AY 2013-14 on 29.11.2014 and thus could be said to have committed the offence under Section 276CC of the Act for the AY 2013-14 after the show cause notice for the AY 2011-12 had already been issued. It was further observed by the High Court that the circumstances surrounding the delay in the filing of return of income by the appellant were not required to be considered in detail by the compounding authority and the same would be considered during the course of the trial. The relevant observations made by the High Court are extracted hereinbelow:

“4.0 [...] However, on the other hand, it is the case on behalf of the petitioner assesee that for AY 2013-14 the show cause notice under Section 276 CC of the Act was issued on 12.03.2015 and prior thereto the return of income for AY 2013-14 was already filed on 29.11.2014 and therefore, the same can be said to be “first offence” even as per the clause 8(ii) of the Guidelines. The submission on behalf of the assessee cannot be accepted. The aforesaid submission on behalf of the assessee is absolutely on misreading of clause 8(ii). On true interpretation of clause 8(ii), in case the offence is committed prior to date of issuance of any show cause notice for prosecution, in that case, it can be said to be the “first offence”. Therefore, in case for any prior assessment year, the show cầuse notice has been issued for prosecution and despite the same, in the subsequent year, the offence is committed by not filing the return, the same cannot be said to be “first offence”. The submission on behalf of the petitioner assessee that in the present case the show cause notice for prosecution for AY 2013-14 was issued on 12.03.2015 and prior thereto the return of income was filed for AY 2013-14 on 29.11.2014 and therefore, the same can to be said to be first offence, cannot be accepted. What is required to be considered is whether for any prior year any show cause notice for prosecution is issued and served upon the petitioner or not. If the contention on behalf of the petitioner is accepted, in that case, it will be contrary to the clause 8(ii) of the Guidelines. In the present case, for AY 2011-12, the show cause notice was already issued under Section 276 CC of the Act on 27.10.2014 for non filing of return before due date (for AY 2011-12) and despite the same for the subsequent years i.e. for AY 2013-14 the assessee did not file return of income before due date of filing of return. Therefore, again the petitioner -assessee committed the offence for AY 2013-14. Thus, it cannot be said that in AY 2013-14 it can be said to be the “first offence” committed by the assessee. Under the circumstances, the respondent no.1 has rightly rejected the compounding application submitted by the petitioner. Rejection of the compounding application submitted by the petitioner is absolutely in consonance with the Guidelines, 2014.

5.0. Now, so far as submission on behalf of the petitioner that while rejecting the compounding application submitted by the petitioner, respondent no.1 has not properly appreciated and / or considered the reason for not filing the return of income by petitioner before due date is concerned, at the outset, it is required to be noted that it has nothing to do with the compounding application. It is required to be noted that while considering the application for compounding, merits is not required to be considered as is to be considered in trial.

6.0. Now, so far as reliance placed upon the decision of the Madras High Court in the case of K. Inba Sagaran (supra) relied upon by the learned advocate for the petitioner-assessee is concerned, the said decision shall not be applicable to the facts of the case on hand, more particularly, while considering the compounding application. In the case before the Madras High Court, three different complaints for the offence under Section 276CC of the Act for AY 1991-92, 1992-93 and 1993-94 though were filed and numbered separately, were clubbed together in one case and the learned Magistrate passed the orders holding the accused guilty under Section 276CC on three counts. The question arose whether the offence for which accused was charged were distinct or separate and not in any way inter-related and when each offence had no connection with other, joinder of charges would become bad in law or not and to that it has been observed and held by the Madras High Court that framing of charge was defective and violative of Sections 218 and 219 of the Code of Criminal Procedure and as judgment was rendered only in one case and there was no finding of guilt recorded as regards two other cases, the Madras High Court has observed that error committed by the trial Court was of such grave nature that it had caused prejudice to accused and therefore, in that view of the matter, conviction and sentence passed by the lower Court has to be set aside. Therefore, the said decision shall not be applicable to the facts of the case on hand.

7.0. Now, so far as reliance placed upon the decision of the Delhi High Court in the case of Sport Infratech (P) Ltd (supra) relied upon by the learned advocate for the petitioner is concerned, the said decision also shall not be applicable to the facts of the case on hand.

8.0. Even the learned advocate for the petitioner has requested not to observe anything on merits and therefore, we refrain from observing anything on merits, more particularly, the reasons given by the petitioner assessee for not filing return of income before due date, even for AY 2013-14.

9.0. In view of the above and for the reasons stated above, the impugned order passed by the respondent no.1 rejecting the compounding application submitted by the petitioner cannot be said to be either illegal or contrary to the Guidelines, we see no reason to interfere with the same. In view of the above and for the reasons stated above, present petition fails and same deserve to be dismissed and is accordingly dismissed.”

11.In such circumstances referred to above, the appellant is here before this Court with the present appeal.

B.SUBMISSIONS ON BEHALF OF THE APPELLANT

12.Mr. Tushar Hemani, the learned Senior Counsel appearing for the appellant, submitted that an offence as contemplated under Section 276CC of the Act is committed upon the failure of the assessee in furnishing the return of income within the due date as contemplated under Section 139(1) of the Act. He submitted that whether the assessee had filed a belated return of income, that is, after the expiry of the due date or not, is immaterial and the point in time when the offence under Section 276CC is committed is the date immediately following the due date for furnishing the return of income as prescribed under Section 139(1) of the Act. Thus, for the AY 2013-14, the appellant could be said to have committed the offence on the date immediately following the due date for filing of returns for the AY 2013-14. Hence the date for commission of the offence under Section 276CC for the AY 2013-14 would be 01.11.2013 as the due date for filing the returns for AY 2013-14 was 31.10.2023. He emphasised on the fact that the actual date of filing the belated return is of no consequence for the purpose of an offence under Section 276CC as otherwise an assessee who has missed filing the return before the due date for a given assessment year would never file a belated return and the offence would never be committed.

13.He further submitted that as per the 2014 guidelines, the expression “first offence” means offence committed prior to the issuance of show cause notice seeking to initiate prosecution as that is the earliest point in time when the assessee is put to notice about the offence alleged to have been committed by him. Once an assessee is put to notice, all offences alleged to have been committed thereafter are not compoundable. However, offences committed prior to the date when the assessee is put to notice, would be treated as constituting the “first offence” and hence would be compoundable. He submitted that in the facts of the present case, two show cause notices were issued against the appellant by the respondent authorities, one for AY 2011-12 issued on 27.10.2014 and the other for AY 2013-14 issued on 12.03.2015. He argued that the High Court erroneously relied upon the actual date of filing of return of income for the AY 2013-14 to hold that the offence for the said assessment year was committed after the first show cause notice in respect of AY 2011-12 had already been received. He submitted that it is not the date of actual filing of the belated return of income but the date immediately following the due date for filing of return for the given assessment year which should be considered while determining whether the offence is a “first offence” as per the 2014 guidelines.

14.After explaining the factual position as aforesaid, he submitted that as the offence under Section 276CC of the Act could be said to have been committed on 01.11.2013, therefore, it could be said that the same was committed before the first show cause notice seeking to initiate prosecution for the AY 2011-12 was issued against the appellant. Thus, even for the AY 2013-14, the offence committed by the accused under Section 276CC would come within the scope of the expression “first offence” as it is defined in the 2014 guidelines.

15.In such circumstances referred to above, the counsel prayed that there being merit in his appeal, the impugned order passed by the High Court be set aside and the respondent authorities be directed to accept the compounding application moved by the appellant.

C.SUBMISSIONS ON BEHALF OF THE RESPONDENTS

16.Mrs. Monica Benjamin, the learned counsel appearing for the Revenue, submitted that the offence under a particular provision of the Act, for a specific assessment year, can only be committed once for that assessment year. She further submitted that the objective of the 2014 guidelines has never been to compound the same offence every year with no limit on the number of years for which it may be compounded.

17.Referring to Clause 8 of the 2014 guidelines, she submitted that the said Clause prescribes a limit after which both category of offences, that is, A and B, are not to be generally compounded, by laying down that Category A offences will not be generally compounded after the third offence and Category B offences will not be generally compounded after the first offence.

18.In response to the contention of the appellant that more than one offence under Section 276CC of the Act can be compounded if all such offences were committed before the issuance of the first show cause notice for prosecution in relation to any of those offences, she submitted that if the aforesaid submission is accepted then it would defeat the very intent and purpose of the 2014 guidelines, as the said Guidelines are not meant to benefit habitual and repeat offenders intending to circumvent the provisions of the Act.

19.She further submitted that the issuance of a show cause notice is not a prerequisite for recognising a first offence under the 2014 guidelines. As per the meaning of the expression “first offence” as defined in the 2014 guidelines, a first offence can also be said to have been committed when such an offence has not been detected by the Department but has been voluntarily disclosed by the applicant by filing a compounding application. In view of this, the counsel argued that the issuance of a show cause notice could not be said to be a prerequisite for the recognition of a first offence.

20.In furtherance of the aforesaid submission, she submitted that the appellant could be said to have disclosed the commission of offence for both AY 2011-12 and 2013-14 by belatedly filing his returns on 04.03.2013 and 29.11.2014 respectively for both the years, that is, after the due dates prescribed for filing the returns for these years had expired. She submitted that it was only after such a late filing of returns by the appellant that the Department became aware of both the offences and issued the respective show cause notices for the same. Thus, merely because a show cause notice was not issued by the Department due to non-detection that an offence under Section 276CC had been committed, the same cannot be construed as absolving the assessee from the fact that he had already committed an offence and disclosed the same by filing the return of income belatedly.

21.She submitted that by virtue of delayed filing of the return of income for AY 2011-12, the appellant had disclosed the commission of his first offence prior to the due date of filing return for AY 2013-14. Therefore, as the offence under Section 276CC of the Act for the AY 2013-14 was committed after the disclosure of the offence under Section 276CC for the AY 2011-12, hence the offence for the AY 2013-14 could not be said to be covered within the meaning of the expression “first offence” as defined in the 2014 guidelines.

22.Placing emphasis on a letter dated 29.09.2017, she submitted that in the said letter the appellant had admitted committing the second offence and having made such an admission, he cannot be permitted to retract from it at this stage.

23.The counsel further submitted that Clause 4 of the 2014 guidelines stipulates that compounding of offences is not a matter of right and therefore a hyper-technical view should not be taken by the Court while interpreting the 2014 guidelines and only such an interpretation which furthers the underlying intention behind the guidelines should be adopted.

24.She further submitted that the appellant’s reading of the definition of the expression “first offence” under Clause 8 of the 2014 guidelines could be termed as erroneous for the reason that it conveniently overlooks the latter part of the definition which provides that the offences that have gone undetected by the Department but have been voluntarily disclosed by the applicant would also be covered under the definition of the expression “first offence”.

25.In the last, the counsel prayed that this Court may not allow the appellant to take advantage of his own wrongs. She prayed that the impugned judgment of the High Court may not be disturbed and the appeal be dismissed.

D.ISSUES FOR CONSIDERATION

26.Having heard the learned counsel appearing for the parties and having gone through the materials on record, the following questions fall for our consideration:

a.Whether an offence under Section 276CC of the Income Tax Act, 1961 could be said to have been committed on the actual date of filing of return of income or on the day immediately after the due date for filing of returns as per Section 139(1) of the Act?

b.What is the meaning of the expression “first offence” appearing in Clause 8 of the 2014 guidelines?

c.What amounts to voluntary disclosure for the purpose of Clause 8 of the 2014 guidelines?

d.Whether the 2014 guidelines are mandatory or directory in nature?

E.ANALYSIS

i.Section 276CC of the Income Tax Act, 1961

27.Chapter XXII of the Act deals with offences and prosecutions and consists of Sections 275A to 280D. Section 276CC of the Act inter-alia provides that if a person fails to furnish the return of income which he is required to furnish under sub-section (1) of Section 139 of the Act, then he shall be punishable with:

a.Rigorous imprisonment for a term ranging between six months to seven years along with fine in cases where the amount of tax which would have been evaded if the failure of the person had not been discovered is more than twenty-five hundred thousand rupees; and

b.Rigorous imprisonment for a term ranging between three months to two years and with fine - in any other case.

28.Section 276CC of the Act as it stood at the relevant point in time is reproduced hereinbelow:

“276CC. Failure to furnish returns of income.—

If a person wilfully fails to furnish in due time the return of fringe benefits which he is required to furnish under sub-section (1) of section 115WD or by notice given under sub-section (2) of the said section or section 115WH or the return of income which he is required to furnish under sub-section (1) of section 139 or by notice given under clause (i) of sub-section (1) of section 142 or section 148 or section 153A, he shall be punishable,—

(i) in a case where the amount of tax, which would have been evaded if the failure had not been discovered, exceeds twenty-five hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine;

(ii) in any other case, with imprisonment for a term which shall not be less than three months but which may extend to two years and with fine:

Provided that a person shall not be proceeded against under this section for failure to furnish in due time the return of fringe benefits under sub-section (1) of section 115WD or return of income under sub-section (1) of section 139—

(i) for any assessment year commencing prior to the 1st day of April, 1975; or

(ii) for any assessment year commencing on or after the 1st day of April, 1975, if—

(a) the return is furnished by him before the expiry of the assessment year; or

(b) the tax payable by such person, not being a company, on the total income determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source, does not exceed three thousand rupees.”

29.Sub-clause (b) of clause (ii) of the proviso to Section 276CC was substituted by the Act No. 23 of 2019 with effect from 01.04.2020. The said sub-clause, as it stands after the amendment, is reproduced hereinbelow:

“(b) the tax payable by such person, not being a company, on the total income determined on regular assessment, as reduced by the advance tax or self-assessment tax, if any, paid before the expiry of the assessment year. and any tax deducted or collected at source, does not exceed ten thousand rupees.”

30.The proviso to the aforesaid provision prescribes certain cases in which proceedings under the provision would not be initiated and inter alia stipulates that for the assessment years commencing after 1st day of April, 1975, no proceedings under Section 276CC shall lie against any person for the failure to furnish return of income in due time if the return is furnished by him before the expiry of the said assessment year. It further provides that for the assessment years commencing from 01.04.1975, no proceedings shall be initiated under the provision if the tax payable by the person, not being a company, does not exceed ten thousand rupees.

31.Section 276CC punishes the wilful failure by the assessee in furnishing the following types of returns in due time:

a.Return of fringe benefits which he is required to furnish under sub-section (1) of section 115WD or by notice given under sub-section (2) of the said section or section 115WH; or

b.Return of income which he is required to furnish under sub-section (1) of section 139 or by notice given under clause (i) of sub-section (1) of section 142 or section 148 or section 153A.

32.In the case at hand, we are only concerned with the failure of a person in furnishing, in due time, the return of income which he is required to furnish under Section 139. Hence, it is also necessary to advert to the relevant portions of Section 139 of the Act as well and they are reproduced below:

“139. Return of income.—(1) Every person,—

(a) being a company or a firm; or

(b) being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax,

shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed :

xxx xxx xxx

(4) Anyperson who has not furnished a return within the time allowed to him under sub-section (1), may furnish the return for any previous year at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

xxx xxx xxx

8) (a) Where the return under sub-section (1) or sub-section (2) or sub-section (4) for an assessment year is furnished after the specified date, or is not furnished, then whether or not the Assessing Officer has extended the date for furnishing the return under sub-section (1) or sub-section (2), the assessee shall be liable to pay simple interest at fifteen per cent per annum, reckoned from the day immediately following the specified date to the date of the furnishing of the return or, where no return has been furnished, the date of completion of the assessment under section 144, on the amount of the tax payable on the total income as determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source: Provided that the Assessing Officer may, in such cases and under such circumstances as may be prescribed, reduce or waive the interest payable by any assessee under this sub-section.

Explanation 1.—For the purposes of this sub-section, “specified date”, in relation to a return for an assessment year, means,—

(a) in the case of every assessee whose total income, or the total income of any person in respect of which he is assessable under this Act, includes any income from business or profession, the date of the expiry of four months from the end of the previous year or where there is more than one previous year, from the end of the previous year which expired last before the commencement of the assessment year or the 30th day of June of the assessment year, whichever is later;

(b) in the case of every other assessee, the 30th day of June of the assessment year. [...]”

33.Section 139(1) inter alia provides that every person shall, on or before the due date, furnish a return of his income during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed. Sub-section (4) of Section 139 provides that if a person has failed to furnish the return of income within due time prescribed under sub-section (1), then he may furnish the return for any previous year at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

34.To fully understand the import of Section 276CC of the Act, it is necessary to understand the meaning of the expressions “wilfully fails” and “in due time” used in the said provision respectively. This Court in Prakash Nath Khanna v. CIT reported in (2004) 9 SCC 686 was called upon to look into the scope and meaning of the expression “in due time” appearing in Section 276CC of the Act and whether it refers to the time period referred to in Section 139(1) or the time period referred to in Section 139(4). This Court, after discussing the various methods of statutory interpretation, took the view that the legislative intent behind Section 276CC, undoubtedly, was to restrict the meaning of the expression “in due time” used in the said provision to the time period referred to in Section 139(1) and not to the time period referred to in Section 139(4). Explaining the meaning of the expression “wilful failure”, the Court observed that the same has to be adjudicated factually by the trial court dealing with the prosecution of the case. The Court further observed that by virtue of Section 278E, the trial court has to presume the existence of culpable mental state and it would be open to the accused to plead the absence of the same in his defence. The relevant observations made by the Court are reproduced hereinbelow:

“13. It is a well-settled principle in law that the court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. The first and primary rule of construction is that the intention of the legislation must be found in the words used by the legislature itself. The question is not what may be supposed and has been intended but what has been said. “Statutes should be construed, not as theorems of Euclid”, Judge Learned Hand said, “but words must be construed with some imagination of the purposes which lie behind them”. (See Lenigh Valley Coal Co. v. Yensavage [218 FR 547].) The view was reiterated in Union of India v. Filip Tiago De Gama of Vedem Vasco De Gama [(1990) 1 SCC 277 : AIR 1990 SC 981] and Padma Sundara Rao v. State of T.N. [(2002) 3 SCC 533]

14. In D.R. Venkatachalam v. Dy. Transport Commr. [(1977) 2 SCC 273] it was observed that courts must avoid the danger of a priori determination of the meaning of a provision based on their own preconceived notions of ideological structure or scheme into which the provision to be interpreted is somewhat fitted. They are not entitled to usurp legislative function under the disguise of interpretation.

15. While interpreting a provision the court only interprets the law and cannot legislate it. If a provision of law is misused and subjected to the abuse of process of law, it is for the legislature to amend, modify or repeal it, if deemed necessary. (See Rishabh Agro Industries Ltd. v. P.N.B. Capital Services Ltd. [(2000) 5 SCC 515] ) The legislative casus omissus cannot be supplied by judicial interpretative process.

16. Two principles of construction — one relating to casus omissus and the other in regard to reading the statute as a whole — appear to be well settled. Under the first principle a casus omissus cannot be supplied by the court except in the case of clear necessity and when reason for it is found in the four corners of the statute itself but at the same time a casus omissus should not be readily inferred and for that purpose all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. This would be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the legislature. “An intention to produce an unreasonable result”, said Danckwerts, L.J., in Artemiou v. Procopiou [(1966) 1 QB 878 : (1965) 3 All ER 539 : (1965) 3 WLR 1011 (CA)] (All ER p. 544 I), “is not to be imputed to a statute if there is some other construction available”. Where to apply words literally would “defeat the obvious intention of the legislation and produce a wholly unreasonable result”, we must “do some violence to the words” and so achieve that obvious intention and produce a rational construction. [Per Lord Reid in Luke v. IRC [1963 AC 557 : (1963) 1 All ER 655 : (1963) 2 WLR 559 (HL)] where at AC p. 577 he also observed : (All ER p. 664 I) “This is not a new problem, though our standard of drafting is such that it rarely emerges.”]

17. The heading of the section or the marginal note may be relied upon to clear any doubt or ambiguity in the interpretation of the provision and to discern the legislative intent. In CIT v. Ahmedbhai Umarbhai and Co. [1950 SCC 94 : AIR 1950 SC 134] after referring to the view expressed by Lord Macnaghten in Balraj Kunwar v. Jagatpal Singh [ILR (1904) 26 All 393 : 31 IA 132 : 1 All LJ 384 (PC)] it was held that marginal notes in an Indian statute, as in an Act of Parliament cannot be referred to for the purpose of construing the statute. Similar view was expressed in Board of Muslim Wakfs, Rajasthan v. Radha Kishan [(1979) 2 SCC 468] and Kalawatibai v. Soiryabai [(1991) 3 SCC 410 : AIR 1991 SC 1581] . Marginal note certainly cannot control the meaning of the body of the section if the language employed there is clear. (See Nandini Satpathy v. P.L. Dani [(1978) 2 SCC 424 : 1978 SCC (Cri) 236 : AIR 1978 SC 1025] .) In the present case as noted above, the provisions of Section 276-CC are in clear terms. There is no scope for trying to clear any doubt or ambiguity as urged by learned counsel for the appellants. Interpretation sought to be put on Section 276-CC to the effect that if a return is filed under sub-section (4) of Section 139 it means that the requirements of sub-section (1) of Section 139 would stand complied with cannot be accepted for more reasons than one.

18. One of the significant terms used in Section 276-CC is “in due time”. The time within which the return is to be furnished is indicated only in sub-section (1) of Section 139 and not in sub-section (4) of Section 139. That being so, even if a return is filed in terms of sub-section (4) of Section 139 that would not dilute the infraction in not furnishing the return in due time as prescribed under sub-section (1) of Section 139. Otherwise, the use of the expression “in due time” would lose its relevance and it cannot be said that the said expression was used without any purpose. Before substitution of the expression “clause (i) of sub-section (1) of Section 142” by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1-4-1989, the expression used was “sub-section (2) of Section 139”. At the relevant point of time the assessing officer was empowered to issue a notice requiring furnishing of a return within the time indicated therein. That means the infractions which are covered by Section 276-CC relate to non-furnishing of return within the time in terms of sub-section (1) or indicated in the notice given under sub-section (2) of Section 139. There is no condonation of the said infraction, even if a return is filed in terms of sub-section (4). Accepting such a plea would mean that a person who has not filed a return within the due time as prescribed under sub-section (1) or (2) of Section 139 would get benefit by filing the return under Section 139(4) much later. This cannot certainly be the legislative intent.

19. Another plea which was urged with some amount of vehemence was that the provisions of Section 276-CC are applicable only when there is discovery of the failure regarding evasion of tax. It was submitted that since the return under sub-section (4) of Section 139 was filed before the discovery of any evasion, the provision has no application. The case at hand cannot be covered by the expression “in any other case”. This argument though attractive has no substance.

20. The provision consists of two parts. First relates to the infractions warranting penal consequences and the second, measure of punishment. The second part in turn envisages two situations. The first situation is where there is discovery of the failure involving the evasion of tax of a particular amount. For the said infraction stringent penal consequences have been provided. Second situation covers all cases except the first situation elaborated above.

21. The term of imprisonment is higher when the amount of tax which would have been evaded but for the discovery of the failure to furnish the return exceeds one hundred thousand rupees. If the plea of the appellants is accepted, it would mean that in a given case where there is infraction and where a return has not been furnished in terms of sub-section (1) of Section 139 or even in response to a notice issued in terms of sub-section (2), the consequences flowing from non-furnishing of return would get obliterated. At the relevant point of time Section 139(4)(a) permitted filing of return where return has not been filed within sub-section (1) and sub-section (2). The time-limit was provided in clause (b). Section 276-CC refers to “due time” in relation to sub-sections (1) and (2) of Section 139 and not to sub-section (4). Had the legislature intended to cover sub-section (4) also, use of the expression “Section 139” alone would have sufficed. It cannot be said that the legislature without any purpose or intent specified only sub-sections (1) and (2) and the conspicuous omission of sub-section (4) has no meaning or purpose behind it. Sub-section (4) of Section 139 cannot by any stretch of imagination control operation of sub-section (1) wherein a fixed period for furnishing the return is stipulated. The mere fact that for purposes of assessment and carrying forward and to set off losses it is treated as one filed within sub-section (1) or (2) cannot be pressed into service to claim it to be actually one such, though it is factually and really not by extending it beyond its legitimate purpose.

22. Whether there was wilful failure to furnish the return is a matter which is to be adjudicated factually by the court which deals with the prosecution case. Section 278-E is relevant for this purpose and the same reads as follows:

“278-E. Presumption as to culpable mental state.—(1) In any prosecution for any offence under this Act which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution.

Explanation.—In this sub-section, ‘culpable mental state’ includes intention, motive or knowledge of a fact or belief in, or reason to believe, a fact.

(2) For the purposes of this section, a fact is said to be proved only when the court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability.”

23. There is a statutory presumption prescribed in Section 278-E. The court has to presume the existence of culpable mental state, and absence of such mental state can be pleaded by an accused as a defence in respect to the act charged as an offence in the prosecution. Therefore, the factual aspects highlighted by the appellants were rightly not dealt with by the High Court. This is a matter for trial. It is certainly open to the appellants to plead absence of culpable mental state when the matter is taken up for trial.”

(Emphasis supplied)

35.What is discernable from the aforesaid decision is that an offence under Section 276CC could be said to have been committed as soon as there is a failure on the part of the assessee in furnishing the return of income within the due time as prescribed under Section 139(1) of the Act. Subsequent furnishing of the return of income by the assessee within the time limit prescribed under sub-section (4) of Section 139 or before prosecution is initiated does not have any bearing upon the fact that an offence under Section 276CC has been committed on the day immediately following the due date for furnishing return of income.

36.Thus, the appellant is right in his contention that the point in time when the offence under Section 276CC could be said to be committed is the day immediately following the due date prescribed for filing of return of income under Section 139(1) of the Act, and the actual date of filing of the return of income at a belated stage would not affect in any manner the determination of the date on which the offence under Section 276CC of the Act was committed.

37.This can also be discerned from Section 139(8) of the Act which reads as follows:

“Where the return under sub-section (1) or sub-section (2) or sub-section (4) for an assessment year is furnished after the specified date, or is not furnished, then whether or not the Assessing Officer has extended the date for furnishing the return under sub-section (1) or sub-section (2), the assessee shall be liable to pay simple interest at fifteen per cent per annum, reckoned from the day immediately following the specified date to the date of the furnishing of the return or, where no return has been furnished, the date of completion of the assessment under section 144, on the amount of the tax payable on the total income as determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source: Provided that the Assessing Officer may, in such cases and under such circumstances as may be prescribed, reduce or waive the interest payable by any assessee under this sub-section.”

38.A perusal of the aforesaid provision makes it clear that irrespective of whether the return of income is filed by an assessee after the specified date or is not furnished at all, the assessee shall be liable to pay simple interest at the rate 15% reckoned from the day immediately following the specified date notwithstanding the fact that the Assessing Officer has extended the date for furnishing of return.

39.Accepting the contention of the respondents would mean that the commission of an offence under Section 276CC is made contingent upon the filing of the actual belated return by an assessee. This could never have been the intention of the legislature in enacting the provision as such a reading would mean that no assessee would file a return of income after the due date has expired and despite such failure would be able to escape any liability under Section 276CC of the Act.

40.Having discussed the scope of Section 276CC and the ingredients required to constitute an offence under the said provision, the next question that falls for us is whether the appellant could be said to have committed an offence under Section 276CC of the Act and if yes, then whether the appellant is entitled to the benefit of compounding of the offence under the relevant compounding guidelines.

41.The due-date for filing the return of income for the AY 2011-12 was 30.09.2011. The appellant filed his return with delay on 04.03.2013. Hence, as the return was filed beyond the due date for filing the return, an offence under Section 276CC could be said to have been committed by the appellant prima facie.

42.Similarly, the due date for filing the return of income for the AY 2013-14 was 31.10.2013, whereas the appellant filed the return for the said year on 29.11.2014. Hence, the appellant once again breached the requirement of Section 276CC and thus committed an offence as defined under the said provision.

43.Even otherwise, it has not been disputed by the appellant that an offence under Section 276CC was committed by him for AYs 2011-12 and 2013-14 respectively, and he had preferred compounding applications for both the assessment years. While his compounding application for the AY 2011-12 came to be allowed, his compounding application for the AY 2013-14 was rejected by Respondent no. 1 and the rejection was upheld by the High Court vide the impugned order.

44.In view of the dictum laid in Prakash Nath Khanna (supra), the date for commission of both of these offences would be the day falling immediately next to the due date for filing of return, that is 01.10.2011 for AY 2011-12 and 01.11.2013 for the AY 2013-14.

45.The pertinent question that now arises is whether the offences committed by the appellant under Section 276CC of the Act could be said to be compoundable under the relevant provision of the Act read with the appropriate compounding guidelines issued from time to time. At the outset it is important to ascertain the compounding guidelines which would be applicable for the purpose of adjudication of the compounding application made by the appellant.

46.The 2014 guidelines superseded the 2008 guidelines and came into effect from 01.01.2015. Clause 2 of the 2014 guidelines provided that all compounding applications received on or after 01.01.2015 shall be decided in accordance with the 2014 guidelines whereas all applications received prior to 01.01.2015 would be governed by the 2008 guidelines which came into effect on 16.05.2008.

47.In the case at hand, the compounding application for the AY 2011-12 was made on 11.11.2014 and thus would be governed by the 2008 guidelines. As the compounding application for the AY 2013-14 was preferred by the appellant on 19.03.2015, hence it would be governed by the 2014 guidelines. Since the present appeal is only concerned with the compounding application for the AY 2013-14, hence we are limiting our discussion to the 2014 guidelines. However, as the compounding guidelines are framed to guide the exercise of power of compounding conferred upon the CCIT and DGIT under Section 279(2) of the Act, hence we deem it appropriate to first examine the provisions of the Act before discussing the guidelines.

ii.Provisions pertaining to compounding of offences

48.Section 279 of the Act is reproduced hereinbelow:

“279. Prosecution to be at instance of Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner.—

(1) A person shall not be proceeded against for an offence under section 275A, section 275B, section 276, section 276A, section 276B, section 276BB, section 276C, section 276CC, section 276D, section 277, section 277A or section 278 except with the previous sanction of the Principal Commissioner or Commissioner or Commissioner (Appeals) or the appropriate authority:

Provided that the Principal Chief Commissioner or Chief Commissioner or, as the case may be, Principal Director General or Director General may issue such instructions or directions to the aforesaid income-tax authorities as he may deem fit for institution of proceedings under this sub-section.

Explanation.—For the purposes of this section, “appropriate authority” shall have the same meaning as in clause (c) of section 269UA.

(1A) A person shall not be proceeded against for an offence under section 276C or section 277 in relation to the assessment for an assessment year in respect of which the penalty imposed or imposable on him under section 270A or clause (iii) of sub-section (1) of section 271 has been reduced or waived by an order under section 273A.

(2) Any offence under this Chapter may, either before or after the institution of proceedings, be compounded by the Principal Chief Commissioner or Chief Commissioner or a Principal Director General or Director General.

(3) Where any proceeding has been taken against any person under sub-section (1), any statement made or account or other document produced by such person before any of the income-tax authorities specified in clauses (a) to (g) of section 116 shall not be inadmissible as evidence for the purpose of such proceedings merely on the ground that such statement was made or such account or other document was produced in the belief that the penalty imposable would be reduced or waived, under section 273A or that the offence in respect of which such proceeding was taken would be compounded.

Explanation.—For the removal of doubts, it is hereby declared that the power of the Board to issue orders, instructions or directions under this Act shall include and shall be deemed always to have included the power to issue instructions or directions (including instructions or directions to obtain the previous approval of the Board) to other income-tax authorities for the proper composition of offences under this section.”

49.Sub-section (1) of Section 279 of the Act provides that any prosecution for the commission of an offence under Sections 275A, 275B, 276, 276A, 276B, 276BB, 276C, 276CC, 276D, 277, 277A or 278 of the Act respectively cannot be launched except with the previous sanction of the Principal Commissioner or Commissioner or Commissioner (Appeals) or the appropriate authority. The proviso to Sub-section (1) of Section 279 empowers the Principal Chief Commissioner or the Chief Commissioner or the Principal Director General or Director General to issue appropriate directions to the authorities specified in sub-Section (1) for the initiation of prosecution.

50.Sub-section (2) of Section 279 empowers the Principal Chief Commissioner, the Chief Commissioner, the Principal Director General and the Director General to compound any offence defined under Chapter XXII of the Act, either before or after the initiation of proceedings.

51.While interpreting the nature of the power conferred upon the Principal Chief Commissioner under Section 279, this Court in Union of India v. Banwari Lal Agarwal reported in (1998) 7 SCC 652 held that sub-section (2) of the provision is enabling in nature and cannot be construed as allowing the assessee to demand compounding as a matter of right. The relevant observations are reproduced hereinbelow:

“7. We further find that sub-section (2) of Section 279 is a provision which enables the Chief Commissioner or the Director General to compound any offence either before or after the institution of proceedings. There is no warrant in interpreting this sub-section to mean that before any prosecution is launched, either a show-cause notice should be given or an opportunity afforded to compound the matter. The enabling provision cannot give a right to a party to insist on the Chief Commissioner or the Director General to make an offer of compounding before the prosecution is launched.”

52.The effect and scope of the Explanation to Section 279, which was inserted vide the Finance Act, 1991 (Act 2 of 1991) was explained by this Court in the case of Y.P. Chawla v. M.P. Tiwari reported in (1992) 2 SCC 672. It was observed therein that the Explanation serves as a proviso to Section 279(2) of the Act, meaning thereby that the exercise of power under this section by the Commissioner must adhere to the periodically issued instructions by the Board. The Explanation grants the Board the authority to issue orders, instructions, or directions concerning the proper composition of offences under Section 279(2) and explicitly allows for directives requiring prior approval from the Board. The Court observed that when Section 279(2) is read alongside the Explanation, it becomes clear that the Commissioner must follow the instructions given by the Board when exercising discretion under this section. The relevant observations made therein are reproduced hereinbelow:

“2. Whether the Central Board of Direct Taxes, (the Board) under Section 119 of the Income Tax Act, 1961 (the Act) can issue instructions to control the discretion of the Commissioner of Income Tax under Section 279(2) of the Act, to compound the offences, is the short question for our consideration.

xxx xxx xxx

9. This Court in Navnitlal C. Javeri v. K.K. Sen, Appellant Assistant C.I.T. [(1965) 1 SCR 909 : AIR 1965 SC 1375 : (1965) 56 ITR 198] , Ellerman Lines Ltd. v. C.I.T. [(1972) 4 SCC 474 : 1974 SCC (Tax) 304] and in K.P. Varghese v. ITO [(1981) 4 SCC 173 : 1981 SCC (Tax) 293] has held that circulars issued by the Central Board of Direct Taxes under Section 119(1) of the Act are binding on all officers and persons employed in the execution of the Act even if they deviate from the provisions of the Act. The High Court has discussed these judgments in detail and has distinguished them on plausible grounds. It is not necessary for us to go into this question because the legal position has altered to the advantage of the Revenue by the introduction of an Explanation to Section 279 of the Act by the Finance Act (2 of 1991) which has been made operative with effect from April 1, 1962. The Explanation is as under:—

“Explanation.— For the removal of doubts, it is hereby declared that the power of the Board to issue orders, instructions, or directions under this Act shall include and shall be deemed always to have included the power to issue instructions or directions (including instructions or directions to obtain the previous approval of the Board) to other Income Tax authorities for the proper composition of offences under this section.”

10. The Explanation is in the nature of a proviso to Section 279(2) of the Act with the result that the exercise of power by the Commissioner under the said section has to be subject to the instructions issued by the Board from time to time. The Explanation empowers the Board to issue orders, instructions or directions for the proper composition of the offences under Section 279(2) of the Act and further specifically provides that directions for obtaining previous approval of the Board can also be issued. Reading Section 279(2) along with the Explanation, there is no manner of doubt that the Commissioner has to exercise the discretion under Section 279(2) of the Act in conformity with the instructions issued by the Board from time to time.”

iii.Guidelines for Compounding of Offences under Direct Tax Laws, 2014

53.The Guidelines for Compounding of Offences under Direct Tax Laws, 2014 were issued by the Central Board of Direct Taxes, Department of Revenue, Government of India in supersession of the previous guidelines which were issued on 16.05.2008. These guidelines were one in line of many guidelines which were issued by the Central Board of Direct Taxes from time to time to provide guiding principles for the exercise of the power conferred by section 279(2) of the Act which allows compounding of offences by the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General either before or after the institution of proceedings.

54.Paragraph 2 of the 2014 guidelines specifies the date from which the guidelines would come into force and also the applications which would be governed by it. Paragraph 3 stipulates the authorities who are authorised to compound the offences in exercise of the power conferred under Section 279(2).

55.Paragraph 4 of the 2014 guidelines provides that compounding of offences is not a matter of right of the assessee. However, the offences may be compounded by the competent authority upon satisfaction that the eligibility conditions prescribed in the 2014 guidelines are being fulfilled and keeping in view factors like the conduct of the assessee, nature and magnitude of the offence, and of course the facts and circumstances of each case. Thus, what can be discerned from Paragraph 4 is that while it stipulates that the eligibility conditions prescribed in the guidelines are to be satisfied necessarily, the ultimate discretion to compound the offence(s) or not has to be guided by factors which include the conduct of assessee, nature and magnitude of the offence and the unique facts of each case.

56.Paragraph 5 of the 2014 guidelines provides that the guidelines would not be applicable for the compounding of any prosecution initiated under the Indian Penal Code, 1860 and the same can only be withdrawn under Section 321 of the Code of Criminal Procedure, 1973.

57.Paragraph 6 of the guidelines provides two categories of offences which can be compounded - category A and category B offences. Category A offences include the offences defined under Sections 276, 276B 276BB, 276DD, 276E, 277 and 278 of the Act respectively. Whereas Category B offences include the offences defined under Sections 275A, 275B, 276, 276A, 276AA, 276AB, 276C(1), 276C(2), 276CC, 276CCC, 276D, 277, 277A, 278 of the Act respectively. Thus, the offence involved in the case at hand being one under Section 276CC of the Act would be governed by the rules applicable to the compounding of Category B offences.

58.Paragraph 7 of the 2014 guidelines prescribes certain eligibility conditions which have to be satisfied by the applicant before his application for compounding can be accepted by the competent authority. The conditions, as prescribed under the guidelines, are reproduced hereinbelow:

“7. Eligibility Conditions for compounding:

The following conditions should be satisfied for considering compounding of an offence :-

i. The person makes an application to the CCIT/DGIT having jurisdiction over the case for compounding of the offence(s) in the prescribed format (Annexure-1)

ii. The person has paid the outstanding tax, interest, penalty and any other sum due, relating to the offence for which compounding has been sought.

iii. The person undertakes to pay the compounding charges including the compounding fee, the prosecution establishment expenses and the litigation expenses including counsel’s fee, if any, determined and communicated by the CCIT/DGIT concerned.

iv. The person undertakes to withdraw appeal filed by him, if any, in case the same has a bearing on the offence sought to be compounded. In case such appeal has mixed grounds, some of which may not be related to the offence under consideration, the undertaking may be taken for appropriate modification in grounds of such appeal.”

59.Paragraph 8 of the guidelines prescribes offences which are generally not to be compounded under the compounding guidelines. It provides that a Category A offence which is sought to be compounded by an applicant in whose case compounding was allowed in the past in an offence under the same section for which the present compounding application has been made on three occasions or more shall not be compounded. Secondly, it prescribes that category B offences will not be generally compounded other than the first offence as defined in the guidelines. A “first offence” has been defined by Paragraph 8 as follows:

“First offence means offence under any of the Direct Tax Laws committed prior to (a) the date of issue of any show-cause notice for prosecution or (b) any intimation relating to prosecution by the Department to the person concerned or (c) launching of any prosecution, whichever is earlier;

OR

Offence not detected by the department but voluntarily disclosed by a person prior to the filing of application for compounding of offence in the case under any Direct Tax Acts. For this purpose, offence is relevant if it is committed by the same entity. The first offence is to be determined separately with reference to each section of the Act under which it is committed.”

60.A perusal of the reproduced portion of Paragraph 8 shows that the expression “first offence” has been defined under the compounding guidelines as any offence committed:

a.Prior to the date of issuance of any show cause notice for prosecution in relation to the said offence; or

b.Prior to any intimation relating to prosecution by the department to the person concerned or prior to the launching of any prosecution, whichever is earlier.

61.Further, the expression “first offence” is also defined to include any offence which has not been detected by the Department, but has been voluntarily disclosed by a person prior to the filing of an application for compounding of offence in the case under any direct tax Acts. Clause 8 further clarifies that the first offence would be determined separately with reference to each section of the Act under which it is committed and it would be relevant only if it is committed by the same entity.

62.Paragraph 8 further prescribes certain additional categories of offences which are generally not to be considered for compounding. They are reproduced hereinbelow:

“iii. Offences committed by a person who, as a result of investigation conducted by any Central or State agency and as per information available with the CCIT/DGIT concerned, has been found involved, in any manner, in anti-national/terrorist activity.

iv. Offences committed by a person who, was convicted by a court of law for an offence under any law, other than the Direct Taxes laws, for which the prescribed punishment was imprisonment for two years or more, with or without fine, and which has a bearing on the offence sought to be compounded.

v. Offences committed by a person which, as per information available with the CCIT/DGIT concerned, have a bearing on a case under investigation (at any stage including enquiry, filing of FIR/complaint) by Enforcement Directorate, CBI, Lokpal, Lokayukta or any other Central or State agency.

vi. Offences committed by a person for which he was convicted by a court of law under Direct Taxes laws.

vii. Offences committed by a person for which complaint was filed with the competent court 12 months prior to receipt of the application for compounding.

viii. Offences committed by a person whose application for ‘plea-bargaining’ under Chapter XXI-A of ‘Code of Criminal Procedure’ is pending in a Court or a Court has recorded that a ‘mutually satisfactory disposition of such an application is not worked out’.

ix. Any other offence, which the CCIT/DGIT concerned considers not fit for compounding in view of its nature and magnitude.”

63.Paragraph 9 of the 2014 guidelines empowers the Minister of Finance to relax the restrictions stipulated in Paragraph 8 of the guidelines for the purposes of compounding in a deserving case upon the consideration of a report from the Board on a petition made by an applicant.

64.Paragraph 10 of the 2014 guidelines prescribes the competent authority for the purpose of compounding an offence under the guidelines. Paragraph 11 provides for the compounding procedure.

65.Paragraph 12 provides for the compounding fee which would be applicable to the compounding of offences committed under specific provisions of the Act. Paragraph 12.4 prescribes the compounding fee applicable to offences committed under Section 276CC and is reproduced hereinbelow:

“12.4 Section 276CC- Failure to furnish returns of income.

12.4.1 2% per month or part of a month of the tax and interest determined on assessment or reassessment, in relation to return of income that was required to be furnished under section 139(1) or section 142(1) or section 148 or section 153A/153C as the case may be, existing on the date of conveyance of compounding charges to the applicant, determined after rectification u/s 154 of the Act, if any and as reduced by the tax deducted at source and advance tax, if any, paid during the financial year immediately preceding the assessment year, reckoned from the date immediately following the date on which the return of income was due to be furnished to the date of furnishing of the return or where no return was furnished, to the date of completion of the assessment.

12.4.2 Where, before the date of furnishing of the return or where no return was furnished before the date of completion of assessment, any tax is paid by the person u/s 140A, compounding fee shall be calculated in the manner prescribed above up-to the date on which the tax is so paid; and thereafter, the fee shall be calculated at the aforesaid rate on the amount of tax and interest determined on the assessment or re-assessment as the case may be, determined after rectification u/s 154 of the Act, if any, as reduced by the TDS, TCS, advance tax and tax paid u/s 140A before filing of the return of income or where no return was furnished from the date of completion of assessment or reassessment.”

(Emphasis supplied)

66.A perusal of Paragraph 12.4 of the 2014 guidelines as reproduced hereinabove shows that the compounding fee to be levied in the case of an offence under Section 276CC is to be reckoned from the date immediately following the date on which return was due. This is in consonance with Section 139(8) of the Act and further fortifies the argument of the appellant that it is not the date of actual filing of belated return, but the date immediately following the due date for filing of return which is to be considered as the date of commission of the offence.

67.Paragraph 8 of the 2014 guidelines provides that a category B offence will generally not be compounded except when it is the first offence committed by the applicant. As discussed aforesaid, the offence committed by the applicant would be covered by the expression “first offence” if it is committed prior to:

a.Issuance of any show-cause notice for prosecution; or

b.Intimation relating to any prosecution by the Department to the applicant; or

c.Launch of any prosecution, whichever is earlier.

68.In the case at hand, the show cause notice for the initiation of prosecution for the AY 2011-12 was the earliest in time and hence what falls for our determination is whether the offence under Section 276CC for the AY 2013-14 could be said to have been committed before the show cause notice for initiation of prosecution for the AY 2011-12 was issued by the Department.

69.As discussed above, the show cause notice for the AY 2011-12 was issued to the appellant on 27.10.2014. However, the offence under Section 276CC of the Act could be said to have been committed on the dates immediately following the due date for furnishing the return of income for both these assessment years respectively. Thus, the offence for the AY 2011-12 could be said to have been committed on 01.10.2011 and the offence for the AY 2013-14 could be said to have been committed on 01.11.2013.

70.Therefore, it can be said without a cavil of doubt that both the offences under Section 276CC of the Act were committed prior to the date of issue of any show cause notice for prosecution.

71.It was submitted by the respondents that even if the offences committed by the appellant for AY 2011-12 and AY 2013-14 could be said to have been committed before the issuance of the show cause notice dated 27.10.2014, the appellant would still be covered by the subsequent part of the definition of “first offence” as the appellant had voluntarily disclosed the commission of the offences for the AY 2011-12 and 2013-14 respectively by filing belated return of income for the said assessment years. In other words, the respondents contended that the very act of filing belated return of income by the appellant amounts to voluntary disclosure of commission of offence for the purpose of Paragraph 8 of the 2014 guidelines which defines the expression “first offence”. The latter part of the definition of the expression “first offence” reads as follows:

“Offence not detected by the department but voluntarily disclosed by a person prior to the filing of application for compounding of offence in the case under any Direct Tax Acts. For this purpose, offence is relevant if it is committed by the same entity. The first offence is to be determined separately with reference to each section of the Act under which it is committed.”

72.We find it difficult to agree with the contention advanced by the respondents that even if the appellant is not covered by the first part of the definition of the expression “first offence”, he will still be covered by the latter half which is reproduced in the preceding paragraph. Paragraph 8 of the 2014 guidelines has defined a “first offence” in two different manners:

a.First, all those offences which are committed by the assessee prior to a formal intimation of his liability for being prosecuted by the Department are to be treated as “first offence” and it shall be open to the assessee to pray for the compounding of such offences subject to other requirements being fulfilled.

b.Second, any offence which is voluntarily disclosed by the assessee before its detection by the Department would also be treated as a “first offence”.

73.The scheme that permeates Paragraph 8 of the 2014 guidelines allows only those offences to be treated as the “first offence” which are committed by the assessee either prior to a notice that he is liable to prosecution under the Act for the commission of such offences or those offences which are voluntarily disclosed by the assessee to the Department before they come to be detected. The latter part of the definition of the expression “first offence” is not to curtail the scope of the first half but to expand its ambit by including those cases where the assessee comes forward on his own initiative and discloses the commission of the offence. The meaning as sought to be given by the respondents to Paragraph 8 of the 2014 guidelines would turn the very purpose of having a two-fold definition of “first offence” on its head and thus cannot be accepted for it would take away the incentive of coming forward and voluntarily disclosing the commission of offences from erring-assessees.

74.Voluntary disclosure for the purpose of Paragraph 8 of the 2014 guidelines has to be construed in a manner which ensures that such disclosure on part of the assessee saves the Department from the trials and tribulations of having to detect the commission of offence by the assessee by setting into motion its own machinery of detection of offences. Neither the filing of belated return of income by the assessee nor the making of an application for compounding of offence after a show cause notice has already been issued to the assessee fulfills this underlying idea of saving the Department from the inconvenience of detecting the offence. Even after a belated return of income is filed, the Department is still required to process the return, identify the cases wherein offences have been committed, issue show cause notices to the defaulting assessees and thereafter prosecute the offenders to recover the dues and punish the offenders. A voluntary disclosure by the assessee before the stage of detection by the Department besides being economically viable also saves time and efforts on part of the Department and also ensures that the dues are recovered promptly.

75.The primary purpose of the prosecution provisions enshrined in Chapter XXII of the Act is to ensure the penalization of offenders adjudged guilty of tax evasion and other tax-related offenses, while simultaneously instilling a deterring effect in the minds of those who might contemplate circumventing the payment of lawful taxes. When an assessee voluntarily discloses the commission of an offence, he cannot be said to have the intention of evading payment of taxes.

76.The appellant submitted that the 2014 guidelines are directory in nature and the respondents could not have solely relied upon the guidelines to reject his application for compounding without taking into account the attendant extraordinary circumstances pointed out by the him as the cause for the commission of the offences. The appellant placed reliance on a decision of the Delhi High Court delivered in the case of Sports Infratech P. Ltd. & Anr. v. Deputy Commissioner of Income-tax reported in 2017 SCC OnLine Del 6543 in support of his submission.

77.In Sports Infratech (supra), the petitioner therein assailed the order rejecting its application for compounding of the offence under Section 276B of the Act. The application was rejected on the ground that the petitioner did not fulfil the criteria for consideration of its application as per the guidelines issued by the CBDT. Allowing the writ petition, the High Court observed that an application for compounding of an offence cannot be rejected without having regard to the specific facts of the case. The Court highlighted that the guidelines do not limit the authorities from exercising their discretion and therefore the authorities, while exercising their power under Section 279, are required to consider the objective facts in the application before it. The relevant observations from the said decision are reproduced hereinbelow:

“6. The learned counsel for the Revenue urges that the binding nature of the Board’s instructions and guidelines is apparent from Explanation to section 279(3) which clarifies that the power to grant or refuse compounding is essentially discretionary and actually administrative. Therefore, the guidelines framed for its exercise under section 279 are binding upon all Revenue authorities including the Chief Commissioner. Learned counsel relied upon the Supreme Court decision in Asst. CIT v. Velliappa Textiles Ltd. (2003) 263 ITR 550 (SC) to highlight that compounding application cannot be concluded to as a matter of right but rather is subject to exercise of discretion. There is no quarrel with the proposition that power to accept a plea for compounding or refusal is essentially discretionary. The exercise, however, in each case is dependent upon the authority who has to apply his or her mind judiciously to the circumstances of each case. The rejection of the petitioner’s application in this case is entirely routed on the Chief Commissioner’s understanding of the conditions of ineligibility of para. 8(v) apply. In this court’s opinion, that view was based upon an erroneous understanding of law. Whilst guidelines no doubt are to be kept in mind specially while exercising jurisdiction, they cannot blind the authority from considering the objective facts before it. In the present case the petitioner’s failure to deposit the amount collected was beyond its control and was on account of seizure of books of account and documents, etc. But for such seizure, the petitioner would quite reasonably be expected to deposit the amount within the time prescribed or at least within the reasonable time. Instead of considering these factors on their merits and examining whether indeed they were true or not, the Chief Commissioner felt compelled by the text of para. 8(v). That condition, no doubt is important and has to be kept in mind, cannot be only determining. In the present case, the material on record in the form of a letter by the Superintendent of CBI also shows that a closure report was in fact filed before the competent court. Having regard to all these facts, this court is of the opinion that the refusal to consider and accept the petitioner’s application under section 279(2) cannot be sustained. The impugned order is hereby set aside.”

78.As we have discussed in the preceding parts of this judgment, Paragraph 4 of the 2014 guidelines specifies that compounding is not a matter of right of the assessee and the competent authority may allow the compounding application upon being satisfied that the applicant fulfills the eligibility conditions and keeping in mind the conduct of the applicant, nature and magnitude of the offence and the facts and circumstances of each case. Further, Paragraph 7 of the guidelines prescribes the eligibility conditions and Paragraph 8 provides those cases which are generally not to be compounded. Paragraph 9 carves out an exception and empowers the Minister of Finance to relax the conditions laid down in Paragraph 8 of the 2014 guidelines and allow compounding in a deserving case.

79.A plain reading of the 2014 guidelines reveals that while it is mandatory that the eligibility conditions prescribed under Paragraph 7 are to be satisfied, the restrictions laid down in Paragraph 8 have to be read along with Paragraph 4 of the Act which provides that the exercise of discretion by the competent authority is to be guided by the facts and circumstances of each case, the conduct of the appellant and nature and magnitude of offence. Seen thus, it becomes clear that the restrictions laid down in Paragraph 8 of the guidelines are although required to be generally followed, the guidelines do not exclude the possibility that in a peculiar case where the facts and circumstances so require, the competent authority cannot make an exception and allow the compounding application.

80.We have also had the benefit of looking at the Guidelines for Compounding of Offences under Direct Tax Laws, 2019 and the Guidelines for Compounding of Offences under Direct Tax Laws, 2022 issued by the CBDT. In both the said Guidelines, the offence under Section 276CC has been made a Category A offence instead of a Category B offence and is compoundable up to three occasions. Although this would not have any direct implication on the case at hand since the same is governed by the 2014 guidelines, yet what this indicates is that there is a clear shift in the policy of the Department when it comes to the compounding of offences under Section 276CC in particular and in making the compounding regime more flexible and liberal in particular.

F.CONCLUSION

81.For all the aforesaid reasons, we have reached the conclusion that the High Court fell in error in rejecting the writ petition filed by the appellant against the order passed by the Chief Commissioner of Income Tax, Vadodara rejecting the application for compounding. The offence as alleged to have been committed by the appellant under Section 276CC of the Act for the AY 2013-14 is, without a doubt, covered by the expression “first offence” as defined under the 2014 guidelines and thus the compounding application preferred by the appellant could not have been rejected by Respondent no. 1 on this ground alone.

82.The impugned order passed by the High Court as well as the order passed by the Chief Commissioner of Income Tax, Vadodara dated 14.02.2017 rejecting the compounding application of the appellant are hereby set aside.

83.The appellant shall prefer a fresh application for compounding before the competent authority within two weeks from the date of this judgment and the same shall be adjudicated by the competent authority having regard to the conduct of the appellant, the nature of the offence and the facts and circumstances of the case within a period of four weeks from the date on which the application is filed by the appellant.

84.The proceedings pending before the Trial Court shall remain stayed pending the decision of the competent authority on the compounding application of the appellant.

85.In the event the fresh compounding application of the appellant is accepted by the competent authority, the proceedings pending before the Trial Court shall stand abated. If the compounding application is rejected by the competent authority, then the trial shall continue and be brought to its logical conclusion.

86.The appeal is disposed of in the aforesaid terms.

87.Pending application(s), if any, shall stand disposed of.

Result of the case: Appeal disposed of.

Evidence – Circumstantial evidence – Extra-judicial confession – When cannot be relied upon – Appellant convicted for the murder of his live-in partner (‘M’), on the basis of extra-judicial confession allegedly made by him before PW-1 (landlord) and PW-3 (brother of the deceased) endorsed by PW-4 (wife of PW-3) and PW-6: Held: Where a case rests squarely on circumstantial evidence, inference of guilt can be justified only when all the incriminating facts and circumstances are found to be incompatible with the innocence of the accused or the guilt of any other person – The circumstances would not only have to be proved beyond reasonable doubt, but also have to be shown to be closely connected with the principal fact sought to be inferred from those circumstances – All these circumstances should be complete and there should be no gap left in the chain of evidence – The proved circumstances must be consistent only with the hypothesis of the guilt of the accused and totally inconsistent with his innocence – Conviction can be based solely on circumstantial evidence but, great care must be taken in evaluating it – If the evidence relied upon is reasonably capable of two inferences, the one in favour of the accused must be accepted – Conduct of the appellant was quite strange – Instead of confessing his guilt before the police/any other authority, he first went to PW-1 and told him about the death of deceased; he further told him that he was on his way to the residence of the PW-3 to inform him about the development – He then went to the residence of PW-3 alongwith his son in a rickshaw and told PW-3 about the death of deceased following assault on her by him – This he stated to PW-3 before PW-4 and PW-6 (person sitting on the steps of the house of PW-3) – Extrajudicial confession of the appellant lacked credibility as PW-3 clearly stated that the appellant was in a confused state of mind when he confessed before him – Accused was thus, not in a fit state of mind when he made the extra-judicial confession before PW-3 – Further, the testimonies of PW-3 and PW-6 also suffered from material omission – Testimony of prosecution witnesses lacks credibility and also hit by contradictions – No corroborating circumstances were brought on record by the prosecution – Though, there is a strong suspicion against the appellant but suspicion howsoever strong cannot take the place of hard evidence – Extra-judicial confession made before the witnesses lacks credibility and hence, cannot be relied upon – Appellant given benefit of doubt – Conviction and sentence of the appellant passed by the Sessions Judge as affirmed by the High Court, set aside and quashed – Code of Criminal Procedure, 1973 – s.161. [Paras 16, 20, 22, 23-25]

 

[2025] 2 S.C.R. 388 : 2025 INSC 147

Ramu Appa Mahapatar v. The State of Maharashtra

(Criminal Appeal No. 608 of 2013)

04 February 2025

[Abhay S. Oka and Ujjal Bhuyan,* JJ.]

Issue for Consideration

Whether on the strength of the evidence of the four witnesses, the appellant-accused can be linked with the offence; whether it can be said that the charge against the accused of committing murder of the deceased stood conclusively proved beyond all reasonable doubt.

Headnotes

Evidence – Circumstantial evidence – Extra-judicial confession – When cannot be relied upon – Appellant convicted for the murder of his live-in partner (‘M’), on the basis of extra-judicial confession allegedly made by him before PW-1 (landlord) and PW-3 (brother of the deceased) endorsed by PW-4 (wife of PW-3) and PW-6:

Held: Where a case rests squarely on circumstantial evidence, inference of guilt can be justified only when all the incriminating facts and circumstances are found to be incompatible with the innocence of the accused or the guilt of any other person – The circumstances would not only have to be proved beyond reasonable doubt, but also have to be shown to be closely connected with the principal fact sought to be inferred from those circumstances – All these circumstances should be complete and there should be no gap left in the chain of evidence – The proved circumstances must be consistent only with the hypothesis of the guilt of the accused and totally inconsistent with his innocence – Conviction can be based solely on circumstantial evidence but, great care must be taken in evaluating it – If the evidence relied upon is reasonably capable of two inferences, the one in favour of the accused must be accepted – Conduct of the appellant was quite strange – Instead of confessing his guilt before the police/any other authority, he first went to PW-1 and told him about the death of deceased; he further told him that he was on his way to the residence of the PW-3 to inform him about the development – He then went to the residence of PW-3 alongwith his son in a rickshaw and told PW-3 about the death of deceased following assault on her by him – This he stated to PW-3 before PW-4 and PW-6 (person sitting on the steps of the house of PW-3) – Extrajudicial confession of the appellant lacked credibility as PW-3 clearly stated that the appellant was in a confused state of mind when he confessed before him – Accused was thus, not in a fit state of mind when he made the extra-judicial confession before PW-3 – Further, the testimonies of PW-3 and PW-6 also suffered from material omission – Testimony of prosecution witnesses lacks credibility and also hit by contradictions – No corroborating circumstances were brought on record by the prosecution – Though, there is a strong suspicion against the appellant but suspicion howsoever strong cannot take the place of hard evidence – Extra-judicial confession made before the witnesses lacks credibility and hence, cannot be relied upon – Appellant given benefit of doubt – Conviction and sentence of the appellant passed by the Sessions Judge as affirmed by the High Court, set aside and quashed – Code of Criminal Procedure, 1973 – s.161. [Paras 16, 20, 22, 23-25]

Circumstantial evidence – Extra-judicial confession – Evidentiary value of – Discussed. [Paras 16-19.2]

Case Law Cited

State of Rajasthan v. Raja Ram [2003] Supp. 2 SCR 445 : (2003) 8 SCC 180; Sansar Chand v. State of Rajasthan [2010] 12 SCR 583 : (2010) 10 SCC 604; Sahadevan v. State of Tamil Nadu [2012] 4 SCR 366 : (2012) 6 SCC 403; Alauddin v. State of Assam [2024] 6 SCR 20 : (2024) SCC Online SC 760 – referred to.

List of Acts

Penal Code, 1860; Code of Criminal Procedure, 1973; Evidence Act, 1872

List of Keywords

Circumstantial evidence; Extra-judicial confession; Murder; Live-in relationship; Chain of evidence; Inference of guilt; Incriminating facts and circumstances; Incompatible with the innocence of the accused; Guilt of any other person; Hypothesis of the guilt of the accused; Confused state of mind; Fit state of mind; Material omission; Testimony lacks credibility; Contradictions; No corroborating circumstances; Strong suspicion; Benefit of doubt; Not proved beyond reasonable doubt.

Case Arising From

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 608 of 2013

From the Judgment and Order dated 02.12.2010 of the High Court of Bombay in CRLA No. 252 of 2005

Appearances for Parties

Dr. Nirmal Chopra, Adv. for the Appellant.

Sanjay Kharde, Sr. Adv., Siddharth Dharmadhikari, Aaditya Aniruddha Pande, Advs. for the Respondent.

Judgment / Order of the Supreme Court

Judgment

Ujjal Bhuyan, J.

This appeal by special leave is directed against the judgment and order dated 02.12.2010 passed by the High Court of Bombay at Bombay (High Court) in Criminal Appeal No. 252 of 2005 (Ramu Appa Mahapatar Vs. State of Maharashtra) whereby the High Court dismissed Criminal Appeal No. 252 of 2005 filed by the appellant.

2.Be it stated that the aforesaid criminal appeal was preferred against the judgment and order dated 15.10.2004 passed by the First Ad-hoc Additional District and Sessions Judge, Thane (Sessions Judge) in Sessions Case No. 52 of 2004 whereby and whereunder appellant was convicted under Section 302 of the Indian Penal Code, 1861 (IPC) and sentenced to suffer rigorous imprisonment (RI) for life and to pay fine of Rs. 1,000/-, in default to suffer RI for 3 months.

3.Prosecution case in brief is that appellant lived with deceased Manda; it was a live-in relationship. Both of them were living in a chawl of PW-1 Ravinder Gopal Jadhav, who was the landlord. Appellant informed PW-1 that his wife had expired and that he was going to her parents’ house at Dipchale village to inform them. Thereafter, appellant alongwith his son went to Dipchale village where appellant met the brother of the deceased, Bhagwan i.e. PW-3. Appellant told PW-3 in the presence of Shankar PW-6, Pandhari PW-5 and Chanda Bai PW-4 that there was a quarrel between him and Manda following which he had assaulted Manda who succumbed to the injuries.

3.1.Before the appellant could come back to his village Kudus alongwith the relatives of the deceased, PW-1 had already opened the door of the house which was bolted from outside. On opening of the door PW-1 noticed that Manda was lying dead with multiple bleeding injuries. Her mangalsutra and glass bangles were broken; some of the household articles were strewn around on the ground. When appellant reached the place of incident alongwith the relatives of the deceased Manda, PW-1 enquired from him about the incident. At that stage, appellant told PW-1 that deceased Manda had suspected that he (appellant) was having illicit relation with some other woman. This resulted in a quarrel in the course of which appellant had assaulted Manda with the help of a grinding stone and a stick.

3.2.PW-1 then lodged First Information Report (FIR) before the police station whereafter offence under Section 302 IPC was registered against the appellant.

3.3.Investigating officer carried out the investigation in the course of which he drew inquest panchanama, spot panchanama and made seizure of various articles from the place of incident. Appellant was arrested. The weapon of assault was seized. On completion of investigation, chargesheet was filed against the appellant charging him for committing an offence punishable under Section 302 IPC.

4.Learned Sessions Judge read over and explained the charge to the appellant to which he pleaded not guilty and claimed to be tried. To prove its case, prosecution examined 10 witnesses. It was a case of circumstantial evidence. Prosecution relied upon the extra-judicial confession of the appellant made before PW-1 Ravindra, PW-3 Bhagwan, PW-4 Chandabai and PW-6 Shankar. After considering the evidence on record, learned Sessions Judge vide the judgment and order dated 15.10.2004 convicted the appellant under Section 302 IPC and sentenced him to undergo RI for life and also to pay fine of Rs. 1,000/-, in default to suffer RI for another 3 months.

5.Aggrieved by the aforesaid conviction and sentence, appellant preferred appeal before the High Court being Criminal Appeal No. 252 of 2005. By the judgment and order dated 02.12.2010 (impugned judgment), High Court dismissed the appeal of the appellant. Consequently, conviction and sentence of the appellant have been affirmed.

6.This Court by order dated 21.09.2012 had issued notice in the related petition for special leave to appeal (criminal). Leave was granted vide the order dated 15.04.2013. Hence, the present appeal.

7.Learned counsel for the appellant has taken us to the evidence of PW-1, PW-3, PW-4 and PW-6 and submits that the extra-judicial confession allegedly made by the appellant before the above witnesses could not be accepted as a valid piece of evidence. Extra-judicial confession itself is a weak piece of circumstantial evidence. From the testimony of the above witnesses, it is clearly evident that no credence could be given to the theory of extra-judicial confession. Such confession does not inspire any confidence. Beyond the extra-judicial confession, there was no material on record to link the appellant with the death of the deceased. Learned trial court as well as the High Court had erred in placing reliance on the so-called extra-judicial confessions and basing the conviction of the appellant on such evidence. He, therefore, submits that conviction of the appellant is wholly unsustainable and liable to be set aside. Resultantly, the appeal should be allowed.

8.Per contra, learned counsel for the respondent supports the impugned judgment of the High Court. According to him, there is no reason to disbelieve the evidence of PWs 1, 3, 4 and 6. Therefore, the trial court was justified in convicting the appellant on the basis of confessional statement made by the appellant before the above witnesses. High Court had rightly affirmed such conviction and sentence of the learned Sessions Judge. He submits that there is no case for interference with the concurrent findings. Therefore, the criminal appeal is liable to be dismissed.

9.Submissions made by learned counsel for the parties have received the due consideration of the Court.

10.PW-1 is the informant Ravindra; he is the owner of the chawl in which accused used to stay as the tenant alongwith his ‘wife’ and son. On 21.03.2003 at about 06:15 AM, accused came to the residence of PW-1 alongwith his son and informed PW-1 that his wife had expired. Thereafter, the accused went to the house of the parents of his wife to call her relatives. PW-1 stated that he had gone to the house of the accused alongwith his brother and found that it was bolted from outside. Alongwith his brother Shyam Rao Gopal Jadhav, PW-1 opened the door and saw that wife of the accused was lying dead on the floor in a pool of blood.

10.1.Accused brought the brother of the deceased and 4/5 persons. They also saw the dead body. At that stage, PW-1 and his brother enquired with the accused who told them that he had assaulted the deceased with a grinding stone.

10.2.According to PW-1, he went to the police station and lodged the first information which he proved in the court alongwith its contents.

10.3.In cross-examination, he stated that the accused had only told him that his wife had expired. He had talked with the accused for about five minutes. Accused told him that he was going to call her relatives.

10.4.PW-1 denied the suggestion that accused was in a confused state of mind. He stated that he did not feel it necessary to inform the police immediately. He lodged the information between 12 noon to 12:15 PM. He also denied the suggestion that the accused had told him that some people had come in the night and had assaulted him and his wife whereafter they ran away. He further denied the suggestion that accused had told him that somebody had killed his wife and had also assaulted him.

11.PW-3 is Bhagwan. He is the brother of the deceased Manda. On 21.09.2003 at 07:30 AM, he was sitting alongwith Maruti, Pandu Ram Thorat and Shankar Rama Bhoye in front of his house. At that time, accused came alongwith his son Kiran. He told them that there was a quarrel between him and deceased Manda because of which he had assaulted Manda. As a result of the injuries sustained, she died. Hearing this, PW-3 alongwith Maruti, Pandu Ram Thorat and Shankar Rama Bhoye went with the accused to his village.

11.1.When they reached the house of the accused, they found that the landlord (PW-1) was present there. They saw Manda lying dead in a pool of blood. She had injuries on her head, forehead and face. Her saree was soaked in blood and food was strewn around. Accused told them that he had assaulted the deceased with a grinding stone and a wooden stick. Thereafter, they alongwith the landlord (PW-1) went to the police station.

11.2.In his cross-examination, he stated that the accused and the deceased were not married but were staying together. The deceased used to complain to him that accused was beating her.

11.3.Accused told PW-3 and the others that Manda had expired whereupon he was asked as to how she had expired. Though Manda was the younger sister of PW-3, he did not ask the accused whether any complaint was lodged with the police. Maruti Thorat and Pandu Ram Thorat, who are the maternal uncles of PW-3, were present when PW-3 made enquiries with the accused. He had told his maternal uncles Maruti and Pandu Ram to handover the accused to the police.

11.4.PW-3 denied the suggestion that he was not sure as to whether the accused was speaking lies. Since he was to verify as to whether Manda had died, therefore they did not handover the accused to the police. PW-3 clearly stated that when the accused came, he was in a confused state of mind and he did not take tea. His clothes were not torn or blood stained. Accused had brought one mini door rickshaw and in that, PW-3 and the others went to his house. According to PW-3, he had stated before the police that accused had told him that he had assaulted Manda with a grinding stone and had killed her but did not know why it was not written.

11.5.PW-3 stated that they reached the house of the accused around 10:00 AM and thereafter they alongwith the landlord went to the police station to lodge complaint. He denied the suggestion that the accused had never told him about his quarrel with his wife and that he had assaulted her because of which she died. He also denied the suggestion that accused had told him that in the night, some thieves had come and that they had assaulted him and Manda.

12.Chandabai is PW-4. She is the wife of PW-3. According to her, on 21.09.2003 in the morning, her husband was chatting with Shankar, Maruti and Pandu Ram. Meanwhile, the accused came there alongwith his son Kiran and told them that he had quarrelled with Manda because of which he had assaulted her and she died. Leaving behind his son Kiran with PW-4, accused alongwith husband of PW-4 i.e. PW-3 and others went to Kudus i.e. the village of the accused.

12.1.In her cross-examination, she stated that she was residing alongwith her husband PW-3, their three children and now with Kiran, son of the accused. On the day of the incident, her husband PW-3 was sitting outside their home after his breakfast. She stated that she did not directly talk with the accused but came to know about the incident. She denied the suggestion that she only came to know about the incident when her husband PW-3 told her that Manda was assaulted. She denied the suggestion that accused had told her that on that fateful night, 3/4 persons entered their house and had assaulted Manda when the accused ran away alongwith his son from the house. She further denied the suggestion that in the morning, accused had come and found that Manda had died and therefore he informed the landlord and thereafter to PW-4 and others.

12.2.She denied the suggestion that the accused also had injuries and that his clothes were torn.

13.PW-6 Shankar was sitting on the steps of the house of Bhagwan i.e. PW-3 in the morning of 21.09.2003 alongwith Bhagwan, Maruti and Pandu Ram. Accused came there at about 07:30 AM. He had come in a rickshaw alongwith his son. Accused told Bhagwan that he had quarrelled with Manda during which he had assaulted her and that she had died.

13.1.PW-6 stated that son of the accused was kept with the wife of Bhagwan whereafter they all went to the residence of the accused at Kudus. In the house of the accused, they saw that Manda had already expired. She had injuries on her forehead, head and back. They also saw that bangles and mangal sutra were broken and that there was splattering of blood.

13.2.In his cross-examination, he stated that accused was with them for about half an hour to 45 minutes. He did not know the accused prior to that date. He denied the suggestion that the clothes of the accused were torn and that the accused was in a confused state of mind.

13.3.PW-6 further deposed that he had told the police that accused had told Bhagwan in their presence that he had a quarrel with Manda in the night but he did not know why it was not written that accused had told so to Bhagwan in his statement by the police.

13.4.PW-6 denied the suggestion that the accused had told them that in the night, 3/4 drunk persons had entered their house whereafter they had assaulted him and when they were about to assault his son, he ran away with his son.

14.The above four are the witnesses who had deposed that the accused had stated before the informant (PW-1) and PW-3 that he had a quarrel with Manda because of which he assaulted her with a grinding stone and a stick following which she died. There is no dispute about the multiple injuries seen on the body of the deceased or the homicidal nature of the death of the deceased. Question for consideration is whether on the strength of the evidence of the above four witnesses, the accused can be linked with the offence and as to whether it can be said that the charge against the accused of committing murder of the deceased stood conclusively proved beyond all reasonable doubt?

15.Before we analyse the evidence of the above witnesses, it is necessary to briefly examine the law relating to extra-judicial confession as the present is a case of extra-judicial confession allegedly made by the accused before PW-1 and PW-3 which were endorsed by PW-4 and PW-6.

16.Extra-judicial confession of an offence made by the accused before a witness is one of the several instances of circumstantial evidence; there are other circumstances, such as, the theory of last seen together; conduct of the accused before or immediately after the incident; human blood being found on the clothes or person of the accused which matches with that of the accused; leading to discovery, recovery of weapon etc. As we know, circumstantial evidence is not direct to the point in issue but consists of evidence of various other facts which are so closely associated with the fact in issue that taken together, they form a chain of circumstances from which the existence of the principal fact can be legally inferred or presumed. The chain must be complete and each fact forming part of the chain must be proved. It has been consistently laid down by this Court that where a case rests squarely on circumstantial evidence, inference of guilt can be justified only when all the incriminating facts and circumstances are found to be incompatible with the innocence of the accused or the guilt of any other person. The circumstances would not only have to be proved beyond reasonable doubt, those would also have to be shown to be closely connected with the principal fact sought to be inferred from those circumstances. All these circumstances should be complete and there should be no gap left in the chain of evidence. The proved circumstances must be consistent only with the hypothesis of the guilt of the accused and totally inconsistent with his innocence. The circumstances taken cumulatively must be so complete that there is no escape from the conclusion that within all human probability the crime was committed by the accused and none else. While there is no doubt that conviction can be based solely on circumstantial evidence but great care must be taken in evaluating circumstantial evidence. If the evidence relied upon is reasonably capable of two inferences, the one in favour of the accused must be accepted.

17.In State of Rajasthan Vs. Raja Ram,1 this Court explained the concept of extra-judicial confession. Confession may be divided into two classes i.e. judicial and extra-judicial. Judicial confessions are those which are made before a magistrate or a court in the course of judicial proceedings. Extra-judicial confessions are those which are made by the party elsewhere than before a magistrate or a court. Extra-judicial confessions are generally those that are made by a party before a private individual who may be a judicial officer also in his private capacity. As to extra-judicial confessions, two questions arise: firstly, whether they are made voluntarily and secondly, are they true? If the court is of the opinion that the confession was not made voluntarily but was a result of an inducement, threat or promise, it would not be acted upon. It follows that a confession would be voluntary if it is made by the accused in a fit state of mind and if it is not caused by any inducement, threat or promise having reference to the charge against him proceeding from a person in authority. Whether or not the confession was voluntary would depend upon the facts and circumstances of each case judged in the light of Section 24 of the Indian Evidence Act, 1872 (briefly ‘the Evidence Act’ hereinafter). The law is clear that a confession cannot be used against an accused person unless the court is satisfied that it was voluntary. At that stage, the question whether it is true or false does not arise. If the facts and circumstances surrounding the making of a confession appear to cast a doubt on the veracity and voluntariness of the confession, the court may refuse to act upon the confession even if it is admissible in evidence. The question whether a confession is voluntary or not is always a question of fact. A free and voluntary confession is deserving of the highest credit because it is presumed to flow from the highest sense of guilt.

17.1.An extra-judicial confession, if voluntary and true and made in a fit state of mind, can be relied upon by the court. The confession will have to be proved like any other fact. The value of the evidence as to confession like any other evidence depends upon the reliability of the witness to whom it is made and who gives the evidence. Extra-judicial confession can be relied upon and conviction can be based thereon if the evidence about the confession comes from a witness who appear to be unbiased, not even remotely inimical to the accused, and in respect of whom nothing is brought out which may tend to indicate that he may have a motive of attributing an untruthful statement to the accused. The words spoken by the witness should be clear, unambiguous and unmistakenly convey that the accused is the perpetrator of the crime and that nothing is omitted by the witness which may militate against it. After subjecting the evidence of the witness to a rigorous test on the touchstone of credibility, the extra-judicial confession can be accepted and can be the basis of a conviction if it passes the test of credibility.

17.2.If the evidence relating to extra-judicial confession is found credible after being tested on the touchstone of credibility and acceptability, it can solely form the basis of conviction. The requirement of corroboration is a matter of prudence and not an invariable rule of law.

18.In Sansar Chand Vs. State of Rajasthan,2 this Court accepted the admissibility of extra-judicial confession and held that there is no absolute rule that an extra-judicial confession can never be the basis of a conviction although ordinarily an extra-judicial confession should be corroborated by some other material.

19.Evidentiary value of an extra-judicial confession was again examined in detail by this Court in Sahadevan Vs. State of Tamil Nadu.3 That was also a case where conviction was based on extra-judicial confession. This Court held that in a case based on circumstantial evidence, the onus lies upon the prosecution to prove the complete chain of events which shall undoubtedly point towards the guilt of the accused. That apart, in a case of circumstantial evidence where the prosecution relies upon an extra-judicial confession, the court has to examine the same with a greater degree of care and caution. An extra-judicial confession, if voluntary and true and made in a fit state of mind can be relied upon by the court. However, the confession will have to be proved like any other fact. The value of the evidence as to confession like any other evidence depends upon the veracity of the witness to whom it has been made.

19.1.This Court acknowledged that extra-judicial confession is a weak piece of evidence. Wherever the court intends to base a conviction on an extra-judicial confession, it must ensure that the same inspires confidence and is corroborated by other prosecution evidence. If the extra-judicial confession suffers from material discrepancies or inherent improbabilities and does not appear to be cogent, such evidence should not be considered. This Court held as follows:-

14. It is a settled principle of criminal jurisprudence that extra-judicial confession is a weak piece of evidence. Wherever the court, upon due appreciation of the entire prosecution evidence, intends to base a conviction on an extra-judicial confession, it must ensure that the same inspires confidence and is corroborated by other prosecution evidence. If, however, the extra-judicial confession suffers from material discrepancies or inherent improbabilities and does not appear to be cogent as per the prosecution version, it may be difficult for the court to base a conviction on such a confession. In such circumstances, the court would be fully justified in ruling such evidence out of consideration.

19.2.Upon an indepth analysis of judicial precedents, this Court in Sahadevan (supra) summed up the principles which would make an extra-judicial confession an admissible piece of evidence capable of forming the basis of conviction of an accused:

(i)The extra-judicial confession is a weak evidence by itself. It has to be examined by the court with greater care and caution.

(ii)It should be made voluntarily and should be truthful.

(iii)It should inspire confidence.

(iv)An extra-judicial confession attains greater credibility and evidentiary value if it is supported by a chain of cogent circumstances and is further corroborated by other prosecution evidence.

(v)For an extra-judicial confession to be the basis of conviction, it should not suffer from any material discrepancies and inherent improbabilities.

(vi)Such statement essentially has to be proved like any other fact and in accordance with law.

20.Having surveyed the principles governing the acceptability and evidentiary value of an extra-judicial confession, we may now advert to such confession made by the accused before PW-1, PW-3, PW-4 and PW-6. It is on record that PW-3 in his cross-examination was quite categorical in deposing that he found the accused to be in a confused state of mind. This factum has also come on record in the testimony of the other witnesses before whom such confession was made. In other words, the accused was not in a fit state of mind when he made the extra-judicial confession before PW-3. That apart, there were no blood stains on the clothes worn by the accused; not to speak of any such blood samples matching with the blood of the deceased. While various articles were seized from the place of occurrence, there was no recovery of any blood-stained clothes. There is no evidence on record that the grinding stone was recovered or that there were any blood stains on the recovered stick, not to speak of such blood stains matching the blood of the deceased. Moreover, we find the conduct of the accused to be quite strange; instead of confessing his guilt before the police or any other authority, he first goes to PW-1, the landlord, and tells him about the death of Manda; further telling him that he was on his way to the residence of the brother of Manda (PW-3) to inform him about the development. He goes to the residence of PW-3 alongwith his son in a rickshaw and tells PW-3 about the death of Manda following assault on her by him. This he stated to PW-3 before PW-4 and PW-6. What is more strange is the reaction or non-reaction of PW-3 when the accused confessed before him that he had killed his sister Manda. This is not at all a normal behaviour of a brother. He would have certainly reacted strongly when he heard the accused saying that he had killed his sister. Instead of any such reaction, as per the prosecution case, PW-3 accompanied the accused back to his residence. Further, PW-4 stated in her cross-examination that she did not talk with the accused directly but came to know about the incident. This clearly puts her testimony under a cloud.

21.There is one more aspect which we would like to flag off. From the evidence on record, we find that there is a clear material omission in the cross-examination of PW-3. According to the testimony of PW-3, he had stated before the police that the accused had told him that he had assaulted Manda with a grinding stone and had killed her but the same was not recorded by the police in his statement under Section 161 of the Code of Criminal Procedure, 1973 (Cr.P.C.). Similarly, PW-6 in his deposition stated that he had told the police that the accused had told Bhagwan (PW-3) in his presence that he had a quarrel with Manda in the night but the police did not record in his statement under Section 161 Cr.P.C.

22.From the above, it is evident that not only the extra-judicial confession of the accused lacks credibility as PW-3 is clearly on record stating that the accused was in a confused state of mind when he confessed before him, the testimonies of PW-3 and PW-6 suffer from material omission. Their statements made under Section 161 Cr.P.C. are at variance with their evidence in court regarding the confession made by the accused before PW-3. This Court in Alauddin Vs. State of Assam4 explained the context in which an omission occurs and when such an omission amounts to a contradiction. In the light of the Explanation to Section 162 of the Cr.P.C., this Court held as follows:

7. When the two statements cannot stand together, they become contradictory statements. When a witness makes a statement in his evidence before the court which is inconsistent with what he has stated in his statement recorded by the police, there is a contradiction. When a prosecution witness whose statement under Section 161(1) or Section 164 of CrPC has been recorded states factual aspects before the court which he has not stated in his prior statement recorded under Section 161(1) or Section 164 of CrPC, it is said that there is an omission. There will be an omission if the witness has omitted to state a fact in his statement recorded by the police, which he states before the court in his evidence. The Explanation to Section 162 CrPC indicates that an omission may amount to a contradiction when it is significant and relevant. Thus, every omission is not a contradiction. It becomes a contradiction provided it satisfies the test laid down in the Explanation under Section 162. Therefore, when an omission becomes a contradiction, the procedure provided in the proviso to sub-Section (1) of Section 162 must be followed for contradicting witnesses in the cross-examination.

23.As observed above, the testimony of the prosecution witnesses suffers from serious lack of credibility and also hit by contradictions which strike at the very root of the prosecution case. No corroborating circumstances have been brought on record by the prosecution.

24.No doubt there is a strong suspicion against the appellant and the needle of suspicion qua the death of Manda points towards him but as is the settled jurisprudence of this country, suspicion howsoever strong cannot take the place of hard evidence. The evidence on the basis of which the prosecution seeks conviction of the accused i.e. extra-judicial confession made before the above witnesses lack credibility and hence cannot be relied upon. Besides, the evidence suffers from material contradiction. Therefore, it would be wholly unsafe to sustain the conviction of the appellant based on such weak circumstantial evidence which on the top of it lack credibility.

25.For the aforesaid reasons, we are of the view that the appellant must get the benefit of doubt. In view of the above, the conviction and sentence of the appellant vide the judgment and order dated 15.10.2004 passed by the Sessions Judge in Sessions Case No. 52 of 2004 as affirmed by the High Court vide the judgment and order dated 02.12.2010 passed in Criminal Appeal No. 252 of 2005, are hereby set aside and quashed. Since the appellant is in detention, he shall be released from custody forthwith if not required in any other case.

26.Criminal appeal is accordingly allowed.

Result of the case: Appeal allowed.

1 (2003) 8 SCC 180

2 (2010) 10 SCC 604

3 (2012) 6 SCC 403

4 (2024) SCC Online SC 760

Code of Criminal Procedure, 1973 – s.482 – Quashing – Penal Code, 1860 – ss.498A, 506 – Dowry Prohibition Act, 1961 – ss.3, 4 – Complainant made specific allegations against her husband and her mother-in-law for demand of dowry and harassment – However, as regards the appellants (complainant’s mother-in-law’s younger sister and her son), the allegation was that they pressurized her to act according to her husband and her mother-in-law’s wishes – High Court declined to quash criminal proceedings against the appellants – Challenge to: Held: Impugned judgements set aside – Charges against the accused including the appellants were sought to be substantiated based on the statements of the complainant, her parents and two panchayat elders – Complainant in her complaints did not assign any specific role to the appellants concerning cruelty, the demands of dowry or her physical and mental harassment except for making a sweeping allegation without specific details – Nothing on record to show that the parents or the two witnesses witnessed any of the incidents of physical harassment of the complainant at the instance of the appellants – Statements of the Panchayat elder is based on the information provided by the complainant’s father and is hearsay evidence – No prima facie case made out against the appellants for continuing the criminal proceedings against them in the trial – Pending criminal proceedings quashed qua the two appellants – Constitution of India – Article 142. [Paras 37, 23, 40]

 

[2025] 3 S.C.R. 1 : 2025 INSC 160

Geddam Jhansi & Anr. v. The State of Telangana & Ors.

(Criminal Appeal No. 609 of 2025)

07 February 2025

[B.V. Nagarathna and Nongmeikapam Kotiswar Singh,* JJ.]

Issue for Consideration

Whether the criminal proceedings against the appellant(s) under Sections 498A, 506, Penal Code, 1860 and Sections 3 and 4, Dowry Prohibition Act, 1961; Protection of Women from Domestic Violence Act, 2005 ought to be quashed.

Headnotes

Code of Criminal Procedure, 1973 – s.482 – Quashing – Penal Code, 1860 – ss.498A, 506 – Dowry Prohibition Act, 1961 – ss.3, 4 – Complainant made specific allegations against her husband and her mother-in-law for demand of dowry and harassment – However, as regards the appellants (complainant’s mother-in-law’s younger sister and her son), the allegation was that they pressurized her to act according to her husband and her mother-in-law’s wishes – High Court declined to quash criminal proceedings against the appellants – Challenge to:

Held: Impugned judgements set aside – Charges against the accused including the appellants were sought to be substantiated based on the statements of the complainant, her parents and two panchayat elders – Complainant in her complaints did not assign any specific role to the appellants concerning cruelty, the demands of dowry or her physical and mental harassment except for making a sweeping allegation without specific details – Nothing on record to show that the parents or the two witnesses witnessed any of the incidents of physical harassment of the complainant at the instance of the appellants – Statements of the Panchayat elder is based on the information provided by the complainant’s father and is hearsay evidence – No prima facie case made out against the appellants for continuing the criminal proceedings against them in the trial – Pending criminal proceedings quashed qua the two appellants – Constitution of India – Article 142. [Paras 37, 23, 40]

Matrimonial/domestic disputes – Criminalisation of domestic disputes, effect on the institution of family – Tendency to implicate family members/relatives – Duty of Court, discussed – In criminal cases of domestic violence, complaints and charges to be specific. [Paras 31-35]

Case Law Cited

State of Haryana and Ors. v. Bhajan Lal and Ors. [1992] Supp. 3 SCR 735 : (1992) 1 Supp. SCC 335; Anand Kumar Mohatta v. State (NCT of Delhi) [2018] 13 SCR 1028 : (2019) 11 SCC 706 – referred to.

List of Acts

Code of Criminal Procedure, 1973; Penal Code, 1860; Dowry Prohibition Act, 1961; Protection of Women from Domestic Violence Act, 2005.

List of Keywords

Quashing; Cruelty; Demand for dowry; Physical and mental Harassment; Domestic violence; Harassment; Criminal intimidation; Panchayat witnesses; Identical statements of the witnesses; Generalised allegations; Matrimonial/domestic disputes; Criminal cases relating to domestic violence; Tendency to implicate family members/relatives; Institution of family; Abuse of the process of the law; Charge-sheet; Hearsay evidence.

Case Arising From

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 609 of 2025

From the Judgment and Order dated 04.04.2022 of the High Court for the State of Telangana at Hyderabad in CRLP No. 3105 of 2022

With

Criminal Appeal No. 610 of 2025

Appearances for Parties

Nitin Tambwekar, Seshatalpa Sai Bandaru, Shaik Mohammad Haneef, Abdul Mannan, Irshad Ahmad, Advs. for the Appellants.

Ms. Devina Sehgal, Vineet George, Beno Bencigar, Parijat Kishore, Advs. for the Respondents.

Judgment / Order of the Supreme Court

Judgment

Nongmeikapam Kotiswar Singh, J.

1.Leave granted in both the SLPs.

2.This common order disposes of both the Criminal Appeals arising out of Special Leave Petition (Criminal) No. 9556 of 2022 and Special Leave Petition (Criminal) No. 428 of 2024 as both these appeals relate to similar and connected incidents.

3.Special Leave Petition (Criminal) No. 9556 of 2022 was filed against the judgement and order dated 04.04.2022 passed by the Ld. Single Bench of the High Court for the State of Telangana in Criminal Petition No. 3105 of 2022 whereunder the High Court declined to quash the criminal proceedings in C.C. No. 46 of 2022 under Section 498A, 506 Indian Penal Code (for short “IPC”) and Sections 3 and 4 of the Dowry Prohibition Act, 1961 (for short “Dowry Act”) pending before the Court of the Judicial Magistrate, First Class, Bhongir under Section 482 of the Code of Criminal Procedure, 1973 (for short “CrPC”) by holding that, prima facie, there are certain allegations against both the appellants, Geddam Jhansi and Geddam Sathyakama Jabali, and that these are triable issues for which the appellants have to face trial and prove their innocence.

4.Special Leave Petition (Criminal) No. 428 of 2024 has been preferred against the judgement and order dated 03.02.2022 passed by the Ld. Single Bench of the High Court for the State of Telangana in Criminal Petition No. 1002 of 2022 whereunder the High Court declined to quash the criminal proceedings under the Protection of Women from Domestic Violence Act, 2005 (for short “DV Act”) in DVC No. 25 of 2021 pending before the Court of the Additional Judicial Magistrate, First Class, Bhongir under Section 482 of CrPC on similar ground by holding that, prima facie, there are specific allegations against the sole appellant, Geddam Jhansi, and the same have to be decided only after enquiry.

5.Being aggrieved by the refusal of the High Court to quash the aforesaid criminal proceedings pending before the concerned Magistrates, the present appeals have been preferred.

6.The gravamen of the plea of the appellants in both the appeals is that the allegations against them are vague and are of a generalised nature without any specific overt act attributed to them, thus, incapable of being fastened with criminal liability, which unfortunately, the High Court had failed to appreciate.

7.The relevant facts in brief as may be culled from the pleadings is that a written complaint was filed before the Mahila Police Station Bhuvanagiri on 17.09.2021 by one Premlata (hereinafter referred to as “complainant”) in which it was mentioned that she was married to one Samuel Suresh, a doctor by profession and a resident of Chennai on 17.08.2016 and at the time of marriage her mother-in-law, Pathagadda, had demanded a sum of Rs.30 Lakhs and accordingly, the complainant’s mother had given Rs.10 Lakhs by way of cash and 15 tolas of gold as dowry to her mother-in-law. It was stated that for about five months after the marriage, the complainant’s husband had treated her well and took care of her properly. Unfortunately, later, her husband suspecting her character started harassing her mentally and physically to get additional dowry of Rs.10 Lakhs, for which her mother-in-law, the younger sister of her mother-in-law, namely, Geddam Jhansi (Appellant No.1), her brother-in-law, Sudheer, and the son of Geddam Jhansi, namely, Geddam Sathyakama Jabali (Appellant No.2) pressurized her to act according to her husband’s and mother in law’s wishes and also threatened to kill her if the demand for dowry was not met. It was also alleged that because of their behaviour, the complainant’s mother organised panchayat several times before the elders and other family members. It was alleged that in front of the elders, her husband had agreed to take care of her properly but as usual after sometime he started harassing her because of which she ultimately approached the police for counselling but there was no change in their behaviour leaving her no alternative but to file the aforesaid complaint.

8.On the basis of the aforesaid complaint, FIR No. 54 of 2021 was registered at Bhongir Women PS, Rahakonda District, under Sections 498A, 506 IPC and Sections 3 and 4 of the Dowry Act against the complainant’s husband, complainant’s mother-in-law, complainant’s brother in law and the present two appellants. On completion of the investigation, Charge Sheet No. 46 of 2021 was filed before the Court of the Judicial Magistrate, First Class, Bhongir under Sections 498A, 506 IPC and Sections 3 and 4 of the Dowry Act against the aforesaid accused including the present two appellants, which is now pending before the aforesaid court in C.C. No. 46 of 2022.

9.Apart from the aforesaid complaint filed before the Mahila Police Station, another complaint was filed by the complainant on 20.09.2021 before the Protection Officer, Bhuvanagari alleging cruelty and criminal intimidation under the DV Act, 2005 making similar allegations with the additional allegations that on one occasion, her husband asked her not to touch his clothes and to go away from the kitchen and that he tried to burn his socks because the complainant had washed them. It was also alleged that her husband had influenced his friends to talk ill of her, who in turn used to call the complainant and ask her to leave her husband, further telling her that her husband has a girlfriend who had taken divorce to marry him. It was also alleged that on 17.10.2020 at around 10:00 p.m, the complainant was beaten and pushed out of the matrimonial house by her husband.

10.The complainant accordingly, approached the Judicial Magistrate First Class, Bhongir where a case under DV Act, being DVC No. 25 of 2021 was registered and is now pending.

11.At this stage it may be apposite to mention herein that the allegations are not one way and the husband had made counter allegations against the complainant. Before the aforesaid complaints were filed by the complainant, the husband of the complainant instituted a divorce proceeding before the Court of the Principal District Judge at Kanchipuram, which was registered as I.D.O.P. No. 44 of 2021 under Section 10 of the Indian Divorce Act, 1869 alleging neglect, insensitivity to the needs of the husband, incompatibility, concealment of facts, showing hostile attitude towards the husband, refusal to consummate the marriage, causing mental and physical harassment and desertion since 10 April 2018.

12.As we proceed to examine the issues involved, we may briefly allude to the law relating to quashing of FIRs/criminal proceedings, which is well-settled and summarised by this Court in the State of Haryana and Ors. vs. Bhajan Lal and Ors., 1992 Supp (1) SCC 335 in which this Court held as below:

“102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.

(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.

(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.

(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party

(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.”

13.In the present case, the charge-sheet has been filed before the Court of the Magistrate in C.C. No. 46 of 2022 after investigation was completed by the police on the basis of the complaint/FIR lodged by the complainant and another proceeding is also pending under the DV Act before the Court of the Additional Judicial Magistrate. However, this will not preclude this Court from interfering with the criminal proceedings, if upon perusal of the complaints, the materials gathered during the investigation and in the charge-sheet, it is found that no prima facie case has been made out against the appellants and the criminal proceedings amount to abuse of the process of law. As mentioned above, the common plea of the appellants in both the proceedings is that allegations against them are of a generalized nature devoid of specific offending acts to constitute offences punishable under law.

14.In this regard, we may recall what this Court has held in Anand Kumar Mohatta v. State (NCT of Delhi), (2019) 11 SCC 706 as regards permissibility of quashing of proceeding once charge-sheet is filed as follows:

“14. First, we would like to deal with the submission of the learned Senior Counsel for Respondent 2 that once the charge-sheet is filed, petition for quashing of FIR is untenable. We do not see any merit in this submission, keeping in mind the position of this Court in Joseph Salvaraj A. v. State of Gujarat [Joseph Salvaraj A. v. State of Gujarat, (2011) 7 SCC 59 : (2011) 3 SCC (Cri) 23] . In Joseph Salvaraj A. [Joseph Salvaraj A. v. State of Gujarat, (2011) 7 SCC 59 : (2011) 3 SCC (Cri) 23] , this Court while deciding the question whether the High Court could entertain the Section 482 petition for quashing of FIR, when the charge-sheet was filed by the police during the pendency of the Section 482 petition, observed : (SCC p. 63, para 16)

“16. Thus, from the general conspectus of the various sections under which the appellant is being charged and is to be prosecuted would show that the same are not made out even prima facie from the complainant’s FIR. Even if the charge-sheet had been filed, the learned Single Judge [Joesph Saivaraj A. v. State of Gujarat, 2007 SCC OnLine Guj 365] could have still examined whether the offences alleged to have been committed by the appellant were prima facie made out from the complainant’s FIR, charge-sheet, documents, etc. or not.”

15. Even otherwise also, it must be remembered that the provision invoked by the accused before the High Court is Section 482 of the CrPC and that this Court is hearing an appeal from an order under Section 482 of the CrPC. Section 482 of the CrPC reads as follows:

“482. Saving of inherent powers of the High Court.—Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any court or otherwise to secure the ends of justice.”

16. There is nothing in the words of this section which restricts the exercise of inherent powers by the Court to prevent the abuse of process of court or miscarriage of justice only up to the stage of the FIR. It is settled principle of law that the High Court can exercise jurisdiction under Section 482 of CrPC even when the discharge application is pending with the trial court [G. Sagar Suri v. State of U.P., (2000) 2 SCC 636, para 7, Umesh Kumar v. State of A.P., (2013) 10 SCC 591, para 20]. Indeed, it would be a travesty to hold that proceedings initiated against a person can be interfered with at the stage of FIR but not if it has advanced and the allegations have materialised into a charge-sheet. On the contrary it could be said that the abuse of process caused by the registration of the FIR stands aggravated if the FIR has taken the form of a charge-sheet after investigation. The power is undoubtedly conferred to prevent abuse of process of any court.

15.Keeping the aforesaid legal position in mind, we will examine whether the facts/materials obtaining in the present case would warrant interference of this Court under Section 482 of the CrPC for quashing the said criminal proceedings pending before the concerned courts.

16.As far as the first complaint is concerned, out of which the criminal proceeding in “C.C. No.46 of 2022” has arisen, which is pending before the Court of the Judicial Magistrate, First Class, Bhongir, where the charge-sheet has been filed, the relevant portions of the said complaint read as follows: -

“xxxxxx

On 17.08.2016, I was married to Samuel Suresh. S/o. Late Janardhan Rao, aged 38 years, Caste: SC (Madiga). Occupation: Doctor, R/o Pondicherry in Chennai. At the time of marriage, my mother-in-law demanded Rs. 30,00,000/- and accordingly my mother has given Rs. 10.00.000/- by way of cash and 15 tulas gold as dowry to my mother-in-law. After the marriage for a period of 5 months or so, my husband has taken care of me properly. Thereafter my husband started suspecting my character and harassed mentally and physically to get additional dowry of Rs.10,00,000/-. I submit that my mother-in-law Pathagadda Bharathi and younger sister of my Mother-in-Law namely Geddam Jhansi, my brother-in-law Sudheer and son of younger sister of my Mother-in-law namely Geddam Satya Rama Jabili all the persons referred above used to pressurize to act according to my husband’s and Mother-in-law’s wish, otherwise they threatened to kill me. In this regard my mother organized Panchayathi several times, before the elders and family members. In front of the elders, my husband agreed to take care of me properly but as usual, after sometime, he started harassing me. Thereafter. I have approached Bhongiri Mahila Police Station and have given a complaint. Thereafter, Police personnel called them for counselling, but there was no change in the behaviour. In view of the above I request to take legal action, on all persons mentioned above.”

(emphasis added)

17.Charge-sheet is filed only on culmination of the investigation during which time the investigating agency collects all the relevant evidence in support of the complaint on the basis of which a clear prima facie case indicating commission of the offence must be made out against the accused warranting trial. The investigation may uncover/throw up more detailed and additional facts and evidence that would support the complaint/FIR. Accordingly, this Court will examine the charge-sheet filed and examine the evidence which has been gathered in the present case relating to “C.C. No. 46 of 2022” to see if any new facts or evidence had been disclosed.

18.In this regard we may refer to the charge-sheet filed in connection with the aforesaid case, relevant portions of which are reproduced hereinbelow: -

“As per the evidence collected, during the course of the investigation and as per detailed and discreet enquiries, prima-facie care is made out against the A-1 to A-5 for the offence punishable U/s 498-(A). 406, 506 IPC & Sec 3 & 4 Dowry Prohibition Act-1961.

During the further course of the Investigation, since the prima-facie offence is proved against the accused A-1. A-2 & A-4 on 23.09.2021 the LW-07 has Register post under sub-section (1) of Section 41 A of Criminal Procedure Code to them, but A-1, A-2 & A-4 was Rejected the Post, after that A-1 received anticipatory bail Hon’ble court of 5 additional district and sessions judge at Bhongir Cri.M.P.No.410/2021 on 27-11-2021 A-3 & A-5 on 02.11.2021 the LW-07 has served the notices them under sub-section (1) of Section 41.A of Criminal Procedure Code with directions to appear before me. Accordingly, on 03.12.2021, the accused A-3 & A-5 have complied with the instructions of LW-07 by appearing before her. As such, as per the directions of the Hon’ble Apex Court and since the offence is having the punishment of less than seven years Imprisonment, the LW. 07 has served notices under sub-section (3) of section 41 A of Criminal Procedure to the accused A-3 & A-5 directing them to appear before the Hon’ble trial court as when they received the summons.

Investigation done so far in this case it well established that LW-1 Panthagadda Premalatha is the complainant & victim legally wedded of the A-1 is resident of H No 1-11-14. Near By Meg Market. Jangaon (V&M&D), Present at Yadagirigutta (V&M). Yadadri-Bhongir (Dist), the LW-2 S Potta Chandralah, the Lw-3. Smt Potta Bharathamma are parents respectively of victim and circumstant witness to the incident, the LW.4, Sri Eppialapally Narendar, the LW-5 Sri Bollepally Janardhan are panchayath elders & circumstantial witness to the incident. Whereas the accused A-1 Panthagadda Shymul Suresh is the son of A-2, the A-2. Panthagadda Bharathi, are resident of Thiruvikanagar. Madhaliya Pet. Pondicherry, the A-3 /Geddam Jhand. Small Mother-in-law of A-1, the A-4 Panthagadda Sudheer, the AS Geddam Sathyakama Jabal @Amancherla Jabali are Brothers of A-1 are resident of Jawaharagar, Hyderabad.

The LW-1 marriage was performed on 17.08.2016 with the A-1 as per customs prevailing in their community and the presence of their relatives. At the time of LW-1 marriage. her in-laws.

Demand Rs. 30,00,000/-Cash for dowry, in which, LW-2 & 3 have gave Rs. 10,00,000/- cash, 15 Thule’s Gold to them as dowry, After marriage the couple had lead happy conjugal life of 5 Months. thereafter A-1 suspecting the Lw-1 character and also used to harassed mentally and physically to bring Additional Rs.10.00.000/- dowry from her parent’s house otherwise A-1 do the 2 marriage with other women, A-2 to A-5 are supported to A-1 Due to such harassment, the LWs 26 3 was placed the matter before the elders LW1-4 & 5 who are circumstantial witness & Panchayath elders. On request of the LWs 2 & 3, the elders held a panchayath 2018 May month 2 times at Chennai, 2018 July month one time at Hyderabad A-3 House, 2019 February Month one time. 2019 August Month one time convinced them, A-1 to A-5 says in front of panchayath elders take good care of Lw-1. but A-1 to A 5) are again harassed her. Later 2 years ago A1 to A-5 beaten the Lw-1 and necked out in the house to bring additional Rs. 10,00,000/ dowry if not bring the amount they would kill the LW-1. Later Lw-1 filed a complaint against them in Woman PS Bhongir. Police are given counselling them, but A1 to A 5 did not change their · attitude. Thus the A1 to A5 noted in Col. No 12 of this charge sheet committed an offence punishable U/s 498-A. 406, 506 IPC & Sec 3 & 4 DP Act.”

19.Perusal of the charge-sheet would show that the investigating agency had relied on the statements of the complainant, her parents and two other witnesses who are Panchayat elders to substantiate the allegations. As far as the statement of the complainant is concerned, it is in the form of the complaint which has been already reproduced hereinabove. We will now examine whether any new or fresh evidence has been revealed in the course of the investigation from the examination of other witnesses, namely, the complainant’s parents and the two panchayat witnesses.

20.The statements of the parents are carbon copy of each other and as such we may refer to the statement of the father only, relevant portions of which read as follows: -

“I am resident of Yadadri Bhuvangiri district, Bibinagar, Brahmanapalli road. We married our daughter Premalatha in 2016 to Panthagadda SamuelSuresh, s/o Janardhan Rao, resident of Pondicherry. Our son-in-law works as a Doctor. At the time of marriage, the Mother-in-law of my daughter demanded Rs.30,00,000 cash as dowry and we gave Rs. 10,00,000/ cash and 15 sovereigns of gold as per her wish. Five months after marriage, my daughter came to our house and told me: that her husband-was suspecting her with every person she spoke further he told her that he doesn’t like her as she did not get the dowry as demanded by them and asked her to get additional dowry of Rs. 10,00,000/ for his needs or else asked her to leave him so that, he can marry again. He was harassing my daughter mentally and physically. My daughter’s Mother-in-law Bharathi, my daughter’s mother-in-law’s younger sister Geddam Jhansi and her son Geddam Sathyacama, my daughter’s husband’s brother Sudhir, Jabali, all of them supported my daughter’s husband and told that as she brought less dowry they warned her to listen to her husband or else they will kill her. They used to say insulting words and used to abuse her and beat her. In this regard we held panchayat with elders. When the elders convinced them, they used to say they will look after her well and taken her with them, but used to harass her again. These type of panchayats took place 4 times in Chennai and 5 times in Hyderabad. Approximately about 2 years ago my daughter came to our house and told me that when she questioned why they were doing like this, they said, how dare you to raise your voice against us and all of them together abused her and beat her and pushed her out of house. They threatened her saying that, if she comes home without getting money of Rs.10,00,000/- they will kill her. After that, my daughter has given a complaint against them in Bhuvanagiri Mahila Police Station and the police called them and counselled them, but there was no change in them is what he stated.”

(emphasis added)

21.The other evidence is in the form of the statements of the two panchayat witnesses, namely, Sri Eppala Pally Narendar and Sri Bollepally Janardhan. It is also noticed that their statements too are reproduction of the other and as such examination of only one of the statements will suffice, for which we may examine the statement of Sri Eppala Pally Narendar, relevant portions of which read as follows: -

“I am a resident of Yadadri-Bhuvanagiri district…….After 5 months of their marriage Chandraiah came to me and told me that his daughter came home and told him that her husband is suspecting her with every person she spoke Further he told he doesn’t like her, as she did not get the dowry that they asked for he asked her to get additional dowry of Rs 10,00,000 for his needs or else asked her to leave him so that he can marry again. He used to harass mentally and physically. Premalatha’s Mother-in-law Bharathi, her Mother-in-law’s younger sister Geddam Jhansi and her son Geddam Sathyacama, Jabali, her husband’s brother Subir, all of them together supported her husband and told her that she brought less dowry and warned her to listen to her husband or else they will kill her. They used to say insulting words and used abuse her and beat her Premalatha’s father told me that in this regard, they were holding a panchayat with elders and asked me to come an panchayat elder. Then I along with a few other elders went to the panchayat. We told them to be good and they said we will look after Premalatha well and has taken her with them, but again harassed her in the same way. In May 2018, one time in July 2018, one time in February 2019, one time in 2019 August, in panchayats were held in Chennai and Hyderabad (Jhansi’s house). In the panchayat all the above persons, collectively told that, if they give the dowry they asked for only, they will take Premalatha or else we will get their boy married again. 1 came to know that at about 2 years ago all of them together abused and beat Premalatha and pushed her out of house and threatened her to get Rs.5,00,000 and then only they will allow her enter the house or else they will kill her-is the statement given by him”

22.When we minutely examine the statements of the father and the mother of the complainant, what can be seen is that as far as the demand for dowry of Rs. 30 Lakhs and giving of Rs. 10 lakhs and 15 sovereigns of gold at the time of marriage of the complainant is concerned, it can be said that it was within their direct knowledge. Being the father and mother, the complainant daughter would naturally convey to them what had transpired with her in relation to her husband and family. Thus, as regards other allegations of harassment, the same were informed to them by their daughter but they were not witness to the same.

It may also be noted that as regards the alleged act of beating of the complainant by her husband and other relatives mentioned by the parents, the complainant herself does not mention so in her complaints. Therefore, this allegation of beating of the complainant is something which has been added by the father and the mother of the complainant though they did not themselves witness the same.

23.As regards the statement of Sri Eppala Pally Narender, the Panchayat elder, regarding the incidents of harassment which are the subject matter of the complaint, the same has been stated by him after he was informed by the father of the complainant. Thus, his evidence is nothing but hearsay evidence. As far as the statement regarding holding of panchayat at Hyderabad and Chennai is concerned, where the family members of the husband had allegedly stated that if the dowry is not given as demanded, the complainant would not be taken back and they would get the husband married again, the said statement is of a very generalised nature and vague in the sense that it does not mention exactly when and in which Panchayat the aforesaid incident took place and what roles the appellants played. Further, it is noticed that this witness as well as the other Panchayat witness are residents of Bhongir which is in Telangana. It is not stated how they were also present in the Panchayat meetings held in Chennai.

The aforesaid Panchayat witness mentioned about the alleged demand of dowry and threat meted out to the complainant of being killed if the demand for dowry of Rs. 5 lakhs was not met, and about the threat of the complainant being thrown out of the matrimonial house, but the said statement is based on the information provided to him by the father of the complainant and is not based on personal knowledge of the witness.

24.When the aforesaid statements are examined, it is evident that there certainly are specific allegations made against the husband of the complainant, his mother (mother-in-law of the complainant) about demand of dowry and harassment meted out to the complainant. However, as regards the present appellants, the allegation against them is that they along with the other accused family members used to pressurize the complainant to act according to her husband and her mother-in-law’s wishes. Apart from this generalised allegation, there are no specific or overt acts attributed to the appellants which would tantamount to acts of cruelty or physical or mental harassment or being active participants in the demands for dowry.

25.From the above what is clearly evident is that the statements of the witnesses though support the case of the complainant, do not disclose any new fact or provide better particulars beyond what had already been stated by the complainant. As far as the present appellants are concerned, these witnesses including the complainant merely make generalised allegations without any specific evidence against them.

26.Thus, if the evidence of the complainant as well as the witnesses are taken at their face value, what can be said to have been made out against the appellants is that the appellants and other members of the family used to pressurize the complainant to act according to the wishes of her husband and mother-in-law which is a very generalised allegation devoid of specific particulars.

27.As mentioned above, the statements of the mother and the father of the complainant as annexed in the charge-sheet are carbon copies. Similarly, the same is in respect of the statements of the other two independent witnesses, Epalla Pally Narender and Bollepally Janardhan. Under these circumstances, discussed above, we have no hesitation to say that the identical statements of the witnesses do not inspire confidence of this Court for continuation of the criminal proceedings with regard to the present appellants.

28.Coming to the other case relating to domestic violence pending before the Court of Additional Judicial Magistrate, First Class, Bhongir in DVC No. 25 of 2021, the same is based on the second complaint dated 20.09.2021 filed by the complainant, relevant portions of which read as follows:-

“xxxxxx

On 17.08.2016, I was married to Samuel Suresh….

After the, marriage for a period of 5 months or so, my husband has taken care of me properly. Thereafter 1. My husband Samuel Suresh, 2. My mother-in-law Bharati Janardhan. 3. Younger sister of my mother-in law Jhansi Geddam 4. My brother-in-law Pathagadda Sudheer 5. Son of my mother-in-law’s sister Geddam Sathyakama Jabill, all the above referred persons, with a plan, started harassing me physically and mentally and demanded to get additional dowry of Rs. 10,00,000/-. When I informed the same thing to my parents, my parents organized a panchayat before my family members and elders. My husband agreed to take care of me properly, before the elders, but as usual after some days he started harassing me along with his family members. They made me to pay the house rent. At times my husband stayed away from the house during nights. My husband used to tell each and everything to my mother-in-law and he used to act as per her directions. Further my mother-in-law used to pressurize me to purchase a new house and a car. They also tried to get a false report from the psychiatrist, by taking an appointment with the doctor. Thereafter they forced me to address a letter stating that, I was responsible for all the mistakes happened in our marital life. They have taken money from me and have spent for their personal uses.

I submit that when meeting was held at the residence of younger sister of my mother-in-law, my husband promised before my parents that he will take care of me properly. After that when I holded his hand, he pushed me down and used to scold me for every small issue. Further he asked not to touch his clothes and go away from the kitchen. Once he tried to burn his socks. because I washed them. My husband has not supported me, even when requested him, that there is a problem in my job and finally lost the job. My parents have invited my husband for my brother’s marriage, but he refused to attend the marriage and used to pressurize me to sign the letter. He used to tell bad about me to his friends and they used to call me and asked me to leave my husband. One day, a girl called me and said that my husband is having a girlfriend earlier and now she has taken divorce from her husband and therefore he is planning to marry her. They have tortured me in many ways, but I patiently tolerated their ill-treatment for a smooth marriage, but he has not understood me. He tortured me mentally by scolding me and he used to go out with his friends and used to come at 3 or 4 in the early morning. On 17.10.20 at around 10:00 pm he necked me out of the house, therefore I request you to take legal action on my husband Samuel Suresh and other family members for torturing me physically and mentally. Further I request you to take action as per Domestic Violence and see that protection order and residence order is provided in my favor. Further, see that every month Rs.30,000/- is given to me, for my maintenance.”

(emphasis added)

The said second complaint is more or less the reiteration of the allegations made in her first complaint with some additional incidents. Perusal of the second complaint shows that no specific allegations about harassment have been made against the appellants.

29.As far as the allegation of the complainant of being thrown out of her matrimonial house on 17.10.2020 is concerned, she made the specific allegation only against her husband and she did not attribute any role of the appellants except for making a general allegation of harassing her physically and mentally without specifying the actual role of the appellants.

30.It may be also noted that in the second complaint, the complainant had specifically stated that when a meeting was held at the residence of the younger sister of her mother-in-law (Appellant No.1), her husband promised before her parents that he would take care of her properly. This statement shows that the Appellant No. 1 was trying to mediate and broker peace between the complainant, her husband and her mother-in-law, which is inconsistent with the allegation that the appellants were pressurising the complainant in support of the mother-in-law and the husband.

31.Invoking criminal process is a serious matter with penal consequences involving coercive measures, which can be permitted only when specific act(s) which constitute offences punishable under the penal code or any other penal statute are alleged or attributed to the accused and a prima facie case is made out. It applies with equal force when criminal laws are invoked in domestic disputes. Criminalising domestic disputes without specific allegations and credible materials to support the same may have disastrous consequences for the institution of family, which is built on the premise of love, affection, cordiality and mutual trust. Institution of family constitutes the core of human society. Domestic relationships, such as those between family members, are guided by deeply ingrained social values and cultural expectations. These relationships are often viewed as sacred, demanding a higher level of respect, commitment, and emotional investment compared to other social or professional associations. For the aforesaid reason, preservation of family relationship has always been emphasised upon. Thus, when family relationships are sought to be brought within the ambit of criminal proceedings rupturing the family bond, courts should be circumspect and judicious, and should allow invocation of criminal process only when there are specific allegations with supporting materials which clearly constitute criminal offences.

32.We have to keep in mind that in the context of matrimonial disputes, emotions run high, and as such in the complaints filed alleging harassment or domestic violence, there may be a tendency to implicate other members of the family who do not come to the rescue of the complainant or remain mute spectators to any alleged incident of harassment, which in our view cannot by itself constitute a criminal act without there being specific acts attributed to them. Further, when tempers run high and relationships turn bitter, there is also a propensity to exaggerate the allegations, which does not necessarily mean that such domestic disputes should be given the colour of criminality.

33.It goes without saying that genuine cases of cruelty and violence in domestic sphere, which do happen, ought to be handled with utmost sensitivity. Domestic violence typically happens within the four walls of the house and not in the public gaze. Therefore, such violence is not noticed by public at large, except perhaps by the immediate neighbours. Thus, providing visible evidence by the victim of domestic violence may not be easily forthcoming and producing direct evidence may be hard and arduous, which does not necessarily mean that domestic violence does not occur. In fact, to deal with this pernicious phenomenon, stringent statutes like Protection from Domestic Violence Act, 2005, have been enacted with very expansive meaning and scope of what amounts to domestic violence. Since, violence perpetrated within the domestic sphere by close relatives is now criminalised entailing serious consequences on the perpetrators, the courts have to be careful while dealing with such cases by examining whether there are specific allegations with instances against the perpetrators and not generalised allegations. The purpose and mandate of the law to protect the victims of domestic violence is of paramount importance, and as such, a balance has to be struck by ensuring that while perpetrators are brought to book, all the family members or relatives are not indiscriminately brought within the criminal net in a sweeping manner.

34.For a matrimonial relationship which is founded on the basis of cordiality and trust to turn sour to an extent to make a partner to hurl allegations of domestic violence and harassment against the other partner, would normally not happen at the spur of the moment and such acrimonious relationship would develop only in course of time. Accordingly, such a situation would be the culmination of a series of acts which turns, otherwise an amicable relationship, into a fractured one. Thus, in such cases involving allegations of domestic violence or harassment, there would normally be a series of offending acts, which would be required to be spelt out by the complainant against the perpetrators in specific terms to rope such perpetrators in the criminal proceedings sought to be initiated against them. Thus, mere general allegation of harassment without pointing out the specifics against such perpetrators would not suffice, as is the case in respect of the present appellants.

35.We are, thus, of the view that in criminal cases relating to domestic violence, the complaints and charges should be specific, as far as possible, as against each and every member of the family who are accused of such offences and sought to be prosecuted, as otherwise, it may amount to misuse of the stringent criminal process by indiscriminately dragging all the members of the family. There may be situations where some of the family members or relatives may turn a blind eye to the violence or harassment perpetrated to the victim, and may not extend any helping hand to the victim, which does not necessarily mean that they are also perpetrators of domestic violence, unless the circumstances clearly indicate their involvement and instigation. Hence, implicating all such relatives without making specific allegations and attributing offending acts to them and proceeding against them without prima facie evidence that they were complicit and had actively collaborated with the perpetrators of domestic violence, would amount to abuse of the process of law.

36.Our observations, however, should not be generalised to mean that relatives cannot be brought under the purview of the aforesaid penal provisions when they have actively participated in inflicting cruelty on the daughter-in-law/victim. What needs to be assessed is whether such allegations are genuine with specific criminal role assigned to such members of the family or whether it is merely a spill over and side-effect of a matrimonial discord and allegations made by an emotionally disturbed person. Each and every case of domestic violence will thus depend on the peculiar facts obtaining in each case.

37.In the present case, the charges against the accused including the appellants are sought to be substantiated based on the statements of the complainant, her parents and two panchayat elders.

As discussed above, the statements of the two elders are based on the information provided by the father of the complainant. These two witnesses did not witness any of the incidents of physical harassment by the appellants. Though they were present in the panchayat to resolve the dispute between the parties, their account of harassment of the complainant is based on what they had learnt from the father of the complainant. As regards their knowledge of demand of dowry by the appellants, the same is quite vague and without specific details.

Similarly, the statements of the parents of the complainant are based on the information provided by the complainant/daughter. There is also nothing on record to show that the parents witnessed any of the incidents of physical harassment of the complainant at the instance of the appellants.

Thus, the evidence against the appellants in these proceedings boils down to the evidence of the complainant. The complainant in her complaints as mentioned above, did not assign any specific role to the appellants concerning the demands of dowry and physical and mental harassment of the complainant, except for making a sweeping allegation without specific details. The evidence of the complainant is the foundation for the criminal proceedings against the appellants. As discussed above, the evidence of the other witnesses do not disclose anything new as far as the appellants are concerned.

In our considered view, the aforesaid materials do not constitute a prima facie case against the appellants for continuing the criminal proceedings against them in the trial.

38.We have also noted that the appellants do not live with the principal accused. While the marriage took place in Pondicherry and the complainant lived with her husband and mother-in-law in Chennai, the appellants are residents of Hyderabad. As the appellants do not stay together with the complainant and her husband and mother-in-law, to make the appellants as co-accused for alleged offences committed in the matrimonial house of the complainant on the basis of very generalised allegations does not appear to be tenable.

39.Under these circumstances, for the reasons discussed above, we are satisfied that the appellants have been able to make out a case for interference in these proceedings qua the present appellants as in our opinion no prima facie case has been made out against the appellants to continue with the criminal proceedings against them and allowing these to continue would amount to abuse of the process of the law.

40.Accordingly, we allow both the present Criminal Appeals as below:

(i)The impugned judgement and order dated 04.04.2022 passed by the Ld. Single Bench of the High Court for the State of Telangana in Criminal Petition No. 3105 of 2022 is set aside and the criminal proceedings in “C.C. No. 46 of 2022” pending before the Court of the Judicial Magistrate, First Class, Bhongir under Section 482 of the Code of Criminal Procedure, 1973 is quashed qua the two appellants, Geddam Jhansi and Geddam Sathyakama Jabali.

(ii)The impugned judgement and order dated 03.02.2022 passed by the Ld. Single Bench of the High Court for the State of Telangana in Criminal Petition No. 1002 of 2022 is set aside and the criminal proceedings in DVC No. 25 of 2021 pending before the Court of the Additional Judicial Magistrate, First Class, Bhongir is quashed qua the appellant, Geddam Jhansi. This is having regard to the criminal proceeding against her being quashed as above and as identical allegation (paragraph 28 above) are made against her in DVC No. 25 of 2021, and in exercise of our powers under Article 142 of the Constitution of India. This is also by bearing in mind the relationship of the appellant Geddam Jhansi to the complainant, being the latters’s mother-in-law’s sister.

41.However, it is made clear that the observations and findings recorded herein by this Court are in the respect of the allegations made against the present appellants and the same will have no bearing on the criminal proceedings against the other accused persons and the trial courts will not be swayed by the observations and findings recorded herein by this Court and the trial courts are expected to proceed with the criminal proceedings pending against the other accused persons after proper appreciation of evidence and in accordance with law.

Result of the case: Appeals allowed.