Income Tax Law – Hybrid System of Accounting – Methodology Adopted by the Company – Principal Commissioner of Income Tax, Shillong challenged the company’s use of the hybrid system of accounting, arguing it was in contravention of Section 145 of the Income Tax Act, 1961 – Tribunal had quashed the revisionary proceedings under Section 263, considering them erroneous and prejudicial to the interest of the revenue – Tribunal’s decision upheld – Appeal dismissed [Paras 1-13].

Revision of Orders – Section 263 of the Income Tax Act – Powers of Principal Commissioner – Principal Commissioner set aside the original assessment and ordered reassessment – Tribunal found that conditions for invoking Section 263 were not satisfied as the original order was neither erroneous nor prejudicial to revenue [Para 10].

Real vs. Hypothetical Income – Application of Judicial Pronouncements – Company’s adoption of cash basis for interest on debtors upheld by the Tribunal – Supported by precedent from the Punjab and Haryana High Court and the Supreme Court, emphasizing that hypothetical income should not be taxed [Paras 6-7].

Consistency in Accounting Practice – Tribunal’s Rationale – Tribunal noted consistent judicial approval of the company’s method in previous assessment years – Judicial precedents highlighted the necessity of adhering to consistent practices in the absence of material changes [Paras 7-12].

Decision: Appeal dismissed – Tribunal’s order upheld – No costs [Para 13].

Criminal Law – Quashing of Proceedings – Petition to quash criminal proceedings against the petitioner who was accused of quid pro quo investments and receiving undue benefits from government projects – The High Court dismissed the petition, emphasizing the limited scope of Section 482 CrPC and the need for trial to determine the factual disputes and criminal liability [Paras 1-60].

Criminal Conspiracy and Corruption – Allegations of bribery through investments in companies linked to a political figure – The petitioner allegedly invested Rs. 854.50 crores in companies owned by Y.S. Jagan Mohan Reddy, resulting in allotment of the Vanpic Project – Allegations also include fraudulent acquisition of lands and control over the Special Purpose Vehicle (SPV) created for the project [Paras 12-36].

Judicial Findings – The High Court reiterated the principles for exercising inherent powers under Section 482 CrPC, stressing that the power should be used sparingly and in exceptional cases – The Court found a prima facie case against the petitioner warranting a trial – Contentions regarding the bona fides of investments, procedural errors in cognizance, and allegations of mala fide prosecution were rejected [Paras 44-57].

Decision – Petition Dismissed – The Court dismissed the petition to quash the proceedings, allowing the trial to proceed – Petitioner granted liberty to file a discharge petition before the trial court [Paras 59-60].

Anticipatory Bail – Economic Offences – Petitioners seeking pre-arrest bail in case of alleged cheating of Rs. 33,80,000/- on promise of arranging a loan – Petitioners accused of failing to arrange loan or return amount – Petitioners contending innocence and civil nature of transaction – Court considered seriousness and gravity of economic offence – Custodial interrogation and recovery needed – Applications for pre-arrest bail dismissed [Paras 1-14].

Economic Offences – Judicial Discretion in Granting Bail – Courts to be cautious in granting anticipatory bail in economic offences involving conspiracy to cheat and defraud – Application of judicial discretion necessary – Pre-arrest bail granted only in exceptional cases [Paras 9-12].

Decision:

Bail Applications Dismissed.

Criminal Law – Conviction for Attempt to Murder – Appeal – Conviction under Section 307 IPC for attempting to murder the informant by assaulting and throwing her out of a moving car – Trial court’s judgment re-evaluated – Prosecution’s evidence primarily from the informant’s testimony – Reliability of the victim’s testimony upheld despite minor inconsistencies – Injury classified as simple by medical evidence – Conviction under Section 307 IPC set aside; conviction modified to Section 323 IPC for voluntary causing hurt – Sentence reduced accordingly [Paras 1-21].

Victim's Testimony – Credibility – Informant’s detailed account of assault in the car, corroborated by medical evidence and testimony of the truck driver who provided assistance – Prosecution’s evidence considered sufficient to support conviction for causing simple injuries voluntarily – No substantial evidence supporting intent to kill [Paras 7-21].

Modification of Sentence – Given the nature of injuries as simple, conviction altered from Section 307 IPC to Section 323 IPC – Sentence reduced to six months' simple imprisonment and fine – Relief of set-off for time already served granted [Paras 20-21].

Decision: Appeal partly allowed – Conviction under Section 307 IPC set aside – Appellant convicted under Section 323 IPC – Sentenced to six months' simple imprisonment and a fine of Rs. 1000, with a default sentence of one month – Trial court to ensure execution of the modified sentence [Paras 20-21].

Criminal Law – Quashing of Proceedings – Petitioners sought quashing of proceedings alleging trespass and property damage – Court quashed proceedings under Section 188 IPC due to lack of a complaint from a public servant as mandated by Section 195 Cr.P.C. – For offences under Sections 447 and 427 IPC, Court found no evidence of an injunction order violation by the petitioners – No trespass or mischief proven – Proceedings quashed [Paras 1-6].

Procedure under Section 195 Cr.P.C. – Requirement for a complaint from a public servant for cognizance of offences under Section 188 IPC – Court held cognizance by the Magistrate illegal due to absence of such a complaint – Emphasized statutory requirement for complaint to be from a public servant concerned [Para 4].

Evidence and Documentation – Court’s review of final report and related documents showed no proof of the injunction order being violated – Prosecution failed to produce evidence of injunction, rendering charges under Sections 447 and 427 IPC untenable [Para 5].

Decision – Criminal Miscellaneous Case Allowed – Held – All further proceedings against petitioners in CC No. 114/2013 arising from Crime No. 721/2012 quashed – Emphasized requirement of proper evidence to sustain charges of trespass and mischief [Para 6].

Negotiable Instruments Act – Section 138 – Conviction and sentence for dishonoured cheque – Petitioner issued cheque for Rs. 3,00,000/- which was dishonoured – Trial Court convicted petitioner, sentenced to three months’ imprisonment, and ordered compensation of Rs. 4,05,000/- – Conviction upheld by Additional Sessions Judge – Petitioner deposited compensation amount, sought compounding of offence – Respondent-complainant agreed to compounding [Paras 1-6]. 

Compounding of Offence – Section 147 of the Negotiable Instruments Act – Entire compensation paid – No objection from respondent for compounding – Court compounded offence as per Section 147 and Supreme Court guidelines in Damodar S. Prabhu – Conviction and sentence set aside – Petitioner directed to pay litigation cost of Rs. 10,000/- and 5% of cheque amount as compounding fee [Paras 7-8]. 

Decision – Revision Petition Allowed – Held – Conviction and sentence set aside – Offence compounded – Petitioner acquitted – Litigation cost and compounding fee imposed – Amount deposited to be released to complainant – Compliance within four weeks mandated to avoid penal consequences [Para 8]. 

Eviction Proceedings – Non-Maintenance and Ill-Treatment – Petitioner challenged eviction from mother's property – Allegation of harassment and non-compliance with procedural rules – High Court found procedural defects in issuance of show cause notice and lack of verification of title by District Collector – Impugned order set aside, remanded for fresh consideration [Paras 1-26].

Maintenance and Welfare of Parents and Senior Citizens – Procedural Compliance – Rule 21(3) stipulates summary proceedings for eviction based on non-maintenance/ill-treatment – Collector's failure to follow prescribed steps including verification of property title and specific grounds in show cause notice – Emphasized need for strict adherence to procedure to prevent misuse and ensure fairness [Paras 10-22].

Decision – Writ Petition Allowed – Impugned eviction order dated 07.03.2024 set aside – Case remanded to District Collector for reconsideration with directions to follow proper procedure – Respondent No. 2 to complete process within 60 days [Paras 23-26].
 

Criminal Law – Murder Conviction – Appellant convicted for the murder of Girija Devi – Eyewitness account from the informant (mother-in-law of the deceased) contradicted by her own statements and other witnesses declared hostile – Conviction based on unreliable sole testimony – No motive or recovery of the weapon – Appellant acquitted due to lack of evidence [Paras 1-30].

Eyewitness Testimony – Reliability – Sole eyewitness, the mother-in-law of the deceased, found unreliable due to contradictions in her testimony and statements of other witnesses who turned hostile – Court emphasizes necessity for credible and consistent witness testimony for conviction [Paras 9-11, 23].

Hostile Witnesses – Impact on Prosecution – Majority of witnesses, including Punam Kumari @ Sonam Kumari (PW-2), Sangita Devi (PW-7), and Saroti Kumari (PW-8), declared hostile – Prosecution’s inability to establish case beyond reasonable doubt due to lack of corroborative evidence from witnesses [Paras 7, 10-14].

Evidence – Weapon Recovery and Motive – No recovery of weapon used in the alleged crime – Lack of clear motive and any incriminating material found at the place of occurrence (P.O.) – Prosecution’s failure to provide substantive evidence linking the appellant to the crime [Paras 20-25].

Decision – Appeal Allowed – Conviction and sentence set aside – Appellant acquitted due to insufficient evidence – Directed to be released forthwith if not required in any other case [Paras 26-32].
 

Freedom of Press – Sting Operation – Legal Boundaries – Petitioners, media persons, conducted a sting operation inside a jail to record an accused’s statement. The Court emphasized the critical role of the press in a democracy but highlighted the necessity of adhering to legal boundaries. It underscored that while the media has significant freedom, this does not exempt it from legal consequences if actions contravene established laws. The prosecution alleged violations under Sections 86 and 87 of the Kerala Prisons and Correctional Services (Management) Act, 2010, which prohibit unauthorized communication and possession of recording devices inside a jail. [Paras 1-16]

Sting Operation – Public Interest vs. Legal Restrictions – The Court referred to Supreme Court judgments noting that sting operations, while sometimes serving public interest, must still adhere to legal standards. It distinguished between lawful investigative journalism and unlawful acts, stressing that intent and adherence to laws are pivotal. The Court cited the necessity for media operations to balance investigative zeal with legal constraints, ensuring actions do not infringe on individual rights or statutory provisions. [Paras 10-15]

Quashing of Proceedings – Lack of Malafide Intent – The petitioners’ actions, aimed at news gathering without malafide intent, were acknowledged. Considering the lack of actual recording and the preventive action by jail authorities, the Court ruled continuation of prosecution unnecessary. The Court allowed the petition and quashed the proceedings, recognizing the petitioners’ over-enthusiastic but non-malafide attempt to gather news, thus underscoring the balance between press freedom and legal adherence. [Paras 16-17]

Decision: Criminal Miscellaneous Case allowed. Proceedings against petitioners in ST.No.2065/2014 before Judicial First Class Magistrate Court-I, Pathanamthitta arising from Crime No.1123/2013 of Pathanamthitta Police Station quashed.