Mere Filing of Income Tax Returns Does Not Exonerate the Accused: Madras High Court Refuses Discharge to Wife of Public Servant in ₹2 Crore DA Case

"Ownership of Properties by Itself Is Not Innocuous – Source of Funds Needs Judicial Scrutiny at Trial Stage", In a significant ruling that strengthens the prosecution's hand in disproportionate assets (DA) cases, the Madras High Court refused to discharge the wife of a public servant facing trial for abetment under the Prevention of Corruption Act. The case titled Harshitha Annapragada v. State rep. by The Superintendent of Police CBI ACB Chennai, decided by Justice M. Nirmal Kumar, reaffirms that explanations related to income sources, tax returns, and ownership of assets require proper evidentiary scrutiny during trial—not at the threshold discharge stage.

The petitioner, Harshitha Annapragada (A2), sought revision of the order passed by the IX Additional Special Judge for CBI Cases, Chennai, which rejected her discharge application filed under Sections 438 and 442 of the Bharatiya Nagarik Suraksha Sanhita, 2023. She stood charged for abetment under Section 13(2) read with Sections 13(1)(e) and 13(1)(b) of the Prevention of Corruption Act, 1988, for allegedly aiding her husband, an Assistant Manager at BEL, in acquiring and concealing disproportionate assets.

Court Emphasises Prima Facie Satisfaction at Discharge Stage

Dismissing the revision, the Court held: "At the stage of discharge, the Court is required only to look into whether prima facie materials are available to proceed against the petitioner. The explanations now given are disputed and can only be adjudicated during trial."

The Court underscored that the discharge stage is not meant for a “roving enquiry” into the veracity of evidence. Rather, the only requirement is to assess whether the prosecution has laid out a prima facie case that warrants the petitioner facing trial.

Justice Nirmal Kumar relied on a consistent line of Supreme Court authority, particularly citing Kanti Bhadra Shah v. State of West Bengal and State of Tamil Nadu v. N. Suresh Rajan, to reiterate that detailed evaluation of facts or innocence claims based on documents like income tax returns is premature at this stage.

Disputed Income, Unexplained Transactions, and Property Ownership Raise Serious Legal Inference

The core allegation against the petitioner and her husband, Dhara Prasad, is that during the check period from 01.04.2017 to 04.02.2020, they were found in possession of assets worth ₹2,40,46,951 against a known income of ₹52,93,120—an excess of ₹2,02,09,500 or 381.80%.

While the petitioner claimed she was independently earning income through part-time jobs, tuitions, and real estate commissions, and that she regularly filed income tax returns, the Court noted:

“The petitioner though claims to have filed income tax returns, no such documents were produced either before the Trial Court or before this Court. If produced, it needs to be verified and considered during trial.”

Properties—some acquired in her sole name and others jointly with her husband—were found during investigation to involve suspicious bank transfers and unexplained sources. According to the CBI, her role was not passive. It was alleged that she actively helped in acquisition and concealment of ill-gotten assets.

“Admittedly the petitioner is not a public servant, but there are properties listed in Statement-B standing in her name and jointly with her husband. She has to necessarily give explanation. Mere filing of income tax returns would not absolve her.”

The Court observed that multiple high-value immovable assets—including plots and houses in Hyderabad—were acquired in the petitioner’s name or jointly with her husband, using unexplained or cash transactions. A Ford Ecosport car was also purchased in her name and later sold with suspicious adjustments made towards construction expenses.

Abetment Must Be Tried, Not Discharged on Pre-Trial Claims

The petitioner’s legal team relied heavily on Supreme Court judgments, including P. Nallammal v. State and P. Shanthi Pugazhenthi v. State, to argue that unless there was clear evidence of instigation or concealment by the wife, she could not be charged with abetment. They asserted that she had no knowledge of her husband’s financial irregularities and had only held properties in her name independently.

However, the High Court rejected this contention, distinguishing those precedents and holding that:

“Though ownership of property by the spouse of a public servant may not per se establish abetment, the facts here—multiple transactions, unexplained cash flows, and the petitioner’s failure to provide credible documentation—create a prima facie inference of abetment that warrants trial.”

Trial Court to Proceed Uninfluenced, But Discharge Denied

Clarifying the limits of its observations, the High Court said:

“The observations made herein are only for the purpose of disposing of the above petition. The Trial Court, uninfluenced by the above, shall decide the case on its own merits.”

Thus, the order of the IX Additional Special Judge for CBI Cases, dated 10.07.2025, rejecting the discharge petition, was upheld.

The revision was found to lack merit, and the miscellaneous petitions were also closed.

Date of Decision: 24 November 2025