Facts of the Case

  • The respondent (Income Tax Department) filed a complaint under Sections 276C(1) and 277 of the Income Tax Act regarding undisclosed foreign bank accounts of the petitioner.
  • During trial proceedings, the Department moved applications:
    • To examine the present Assessing Officer as an additional witness
    • To place additional documents on record
  • The trial court allowed both applications, noting that such documents were not earlier available and were necessary for adjudication.
  • The revisional court upheld this order.
  • The petitioner approached the Delhi High Court challenging both orders.

Issues Involved

  1. Whether the prosecution can introduce additional documents at the pre-charge stage.
  2. Whether permitting additional evidence after filing the complaint causes prejudice to the accused.
  3. Whether delay in producing documents (from later years) invalidates their admissibility.

Petitioner’s Arguments

  • The documents sought to be introduced pertain to years 2009 and 2015, whereas the assessment year involved is 2002–03.
  • No sufficient explanation was provided for failure to produce these documents earlier.
  • Allowing additional evidence at this stage would:
    • Cause prejudice to the accused
    • Delay proceedings
  • Reliance was placed on Sayeeda Farhana Shamim vs State of Bihar (2008) 8 SCC 218, emphasizing cautious use of additional evidence.
  • The documents were allegedly photocopies without originals and lacked relevance.

Respondent’s Arguments

  • The additional evidence is essential for proper adjudication of the complaint.
  • Information regarding undisclosed foreign accounts surfaced later (in 2009 and 2015).
  • No prejudice would be caused since:
    • The petitioner retains the right to cross-examine the additional witness
  • The applications were bona fide and necessary to substantiate allegations.

Court Findings / Order

  • The Delhi High Court upheld the orders of the trial and revisional courts.
  • It held that:
    • The reasoning of the trial court was sound and free from illegality.
    • The additional evidence was sought for bona fide purposes.
    • No prejudice would be caused to the petitioner as full opportunity of cross-examination was available.
    • There was no indication of dilatory tactics or harassment by the prosecution.
  • Accordingly, the petition was dismissed without commenting on merits of the case.

Important Clarification

  • Courts may permit additional evidence even at a later stage if:
    • It is necessary for proper adjudication
    • It is not intended to harass the accused
  • The right of cross-examination safeguards the accused from prejudice.
  • Delay in obtaining evidence, especially in cases involving foreign assets, can be justified due to procedural complexities.

Sections Involved

  • Section 276C(1), Income Tax Act, 1961 – Wilful attempt to evade tax
  • Section 277, Income Tax Act, 1961 – False statement in verification

Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2019:DHC:1313/SUG26022019CRLMM28592017.pdf

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