05 December 2020

Accused in cheque bounce case cannot take benefit if complainant has not shown the transaction in Income-Tax returns

Now it has been harped upon by the accused that the said transaction has not been accounted for. In other words, complainant has not shown the said transaction in her Income-Tax returns. Learned Advocate for the respondent as well as learned Trial Court have heavily relied on the decision in Sanjay Mishra (supra). However, it appears that the legal position that had developed thereafter was not pointed out to learned Trial Judge. In Bipin Thakkar (supra) entire legal position on this point has been discussed. In fact, Bipin Thakkar (supra) reiterates the law discussed on the point in Krishna P. Morajkar vs. Joe Ferrao and another [2013 ALL MR (Cri) 4129 : (2013) 5 AIR Bom R 294]. It is necessary to reproduce those observations from Krishna's case, which reads thus :-
"Further, it has been observed that there is no provision in Income-Tax Act, which makes an amount not shown in the income- tax returns unrecoverable. If some amounts are not accounted for, the person would be visited with the penalty or at times even prosecution under Income-Tax Act, but it does not mean that the borrower can refuse to pay the amount which he has borrowed simply, because there is some infraction of the provisions of the Income-Tax Act."[Para No.12]

    Thus, when in a subsequent pronouncements this Court has clarified the legal position that too, after taking note of subsequent pronouncement by Hon'ble Supreme Court,
Accused in cheque bounce case cannot take benefit if complainant has not shown the transaction in Income-Tax returns
then the later decision would prevail. It has been then observed in Bipin Thakkars' case that, "It is true that merely because amount advanced is not shown in Income-Tax return, in every case, one cannot jump to the conclusion that the presumption under Section 139 of said Act stands rebutted". We can consider the decision in the case of Assistant Director of Inspection vs. A. B. Shanthi, (2002) 6 SCC 259, wherein it has been held :-
"The object of introducing S. 269 is to ensure that a tax payer is not allowed to give false explanation for his unaccounted money, or if he has given some false entries in his accounts, he shall not escape by giving false explanation for the same. During search and seizure unaccounted money is unearthed and the tax payer would usually give the explanation that he had borrowed or received deposits from his relatives or friends sand it is easy for the so-called lender also to manipulate his records later to suit the plea of the tax-payer. The main object of S. 269-SS was to curb this menace."[Para No.13]


    Therefore, in this case also, accused cannot take benefit of such infraction by complainant to show the transaction in Income-Tax returns. Complainant in this case had the capacity to advance the said amount to accused. Thus, from the complaint and the deposition of the complainant/ appellant the factum of giving of loan stands established. Complainant had proved beyond reasonable doubt that the disputed cheque Exhibit-37 was issued by the accused towards the "legally enforceable debt or liability". Presumption under Section 139 of N.I. Act was in favour of complainant. Though accused has adduced evidence in rebuttal, however, she has failed to discharge the said presumption.[Para No.19]

Bombay High Court

Pushpa Sanchalal Kothari
Aarti Uttam Chavan

Decided on 25/11/2020

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