Amareshwar Sahay, J.
1. Heard the parties.
2. In this application, the petitioner has prayed for quashing of the order dated 07.08.2004 taking cognizance of the offence under Section 277 of the Income Tax Act, 1961 which has been taken against the petitioner by the Special Judge (Economic Offences), Dhanbad.
3. The facts in short are that C.O. Case No. 24/04 was filed before the Special Judge, Economic Offences, Dhanbad by one Vijay Bhaskar, Income Tax Officer, Ward No. - II(1), Dhanbad allegint therein that the accused/petitioner Smt. Namita Roy is an assessee having PAN No. ACGPR 3752G and she was an LIC Agent. It is alleged that she derived income in the shape of commission from LIC. She filed her Income Tax Return for the Assessment Year 2001 - 02 duly signed by her on 27.09.2001, with the Income Tax Department, disclosing that the total income from all sources was Rs. 45,651/- and she claimed a refund of Rs. 21,672/- on the basis of TDS Certificate of Form 16A purported to have been issued by LIC, Chirkunda Branch. In the said TDS Certificate, the amount of Rs. 21,672/- was shown as deducted at source from LIC Commission during the Financial Year 2000 - 01. Accordingly, a refund order of Rs. 24,590/- was Issued to the assessee for the Assessment Year 2001 - 02. It is also alleged that on verification and inquiry from the L.I.C. office, it was found that no such TDS Certificate which was submitted by the accused/petitioner along with her Income Tax return, for the Assessment Year 2001 - 02, was issued from L.I.C. Thereafter, the assessee/accused Smt. Namita Roy was noticed to show cause as to why prosecution under Section 277 of the Income Tax Act be not launched against her. In reply to the said notice, the assessee/petitioner stated that on the abatement of one Amal Kumar Chatterjee, she did so and admitted her signature and verification in her return. It is further alleged that the assessee/accused Smt. Namita Roy furnished inadequate particulars of her income in her Income Tax Return and she falsely claimed refund of Rs. 21,672/- on the strength of forged TDS Certificate which she knew to be false and therefore, she was liable to be prosecuted for commission of offence under Section 277 of the Income Tax Act. Accordingly, sanction for prosecution was accorded on 09.07.2004 by the Commissioner of Income Tax, Dhanbad and then the complain was filed in the Court of Special Judge (Economic Offences).
4. On the basis of the allegations made in the Complaint petition, the Special Judge, Economic Offences, Dhanbad, by order dated 07.08.2004, took cognizance of the offence under Sections 277 of the Income Tax Act against the petitioner which is under challenge in this application.
5. Mr. Binod Poddar, learned Senior Counsel appearing for the petitioner submitted that 'mensrea' is an essential ingredient for launching prosecution against a person for commission of the offence under Section 277 of the Income tax Act. If it is shown that there was no mensrea on the part of the accused/assessee then he or she cannot be prosecuted for commission of the offence under Section 277 of the Income Tax Act.
6. Mr. Poddar further submitted that it is the specific case of the petitioner, which is not disputed by the Income Tax Department, that no sooner the petitioner received notice to show-cause by the Income Tax Department, as to why the prosecution should not be launched against her, she in all fairness and realising her mistake, if any, deposited the entire amount with interest with Income Tax Department, which has also accepted, and therefore, it is apparent that the petitioner had no 'mensrea' at all for commission of any offence as alleged.
7. Mr. Poddar further submitted that the petitioner filed her show-cause before the Income Tax Officer as contained in Annexure-2 to this application stating therein that she had been implicated in this case due to mischief committed by A.K. Chatterjee who used to file her return on her behalf. It is not disputed that the amount of refund which was claimed by the petitioner, was returned or paid back to the Department on 20th October, 2003 itself i.e. soon after the notice to show-cause was received by the petitioner.
8. Now let us examine the provision of Section 277 of the Income Tax Act which reads as under:
Section 277. False statement in verification, etc. -
If a person makes a statement in any verification under this Act or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable, -
(i) in a case where the amount of tax, which would have been evaded if the statement or account had been accepted as true, exceeds one 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 rigorous imprisonment for a terms which shall not be less than three months but which may extend to three years and with fine.
9. From bare perusal of the aforementioned provisions, it appears that Section 277 of the Income Tax Act contains some crucial words in regard to mensrea of the assessee such as that he either knows or believes to be false, or does not believe to be true. The intention of the Legislature incorporating these words is quite obvious that the prosecution under this Section will not follow in every case where a wrong statement is made. It has to be judged as to whether assessee had the required mensrea for commission of the offence or not. It shows that existence of 'mensrea' is sine-qua-non for prosecution of the commission of offence under Section 277 of the Income Tax Act.
10. In the present case, it is not disputed that prior to sanction for prosecution, a notice to show-cause was given to the petitioner by the Income Tax Department asking her to reply as to why prosecution be not launched against her and in reply to which, the petitioner very fairly stated that she was made victim of mischief by one A.K. Chatterjee, who filed her return through her signature and wrongly claimed refund and she immediately thereafter deposited the whole amount of refund along with interest with the Income Tax Department.
11. From these facts, it can very well be said that the petitioner had no required mensrea for commission of the offence alleged by the Department.
12. In view of my discussions and findings above, I hold that the order taking cognizance as well as continuance of criminal prosecution against the petitioner is clearly an abuse of the process of the Court and law.
13. Accordingly, this application is allowed and the order dated 07.08.2004 taking cognizance of the offence under Section 277 of the Income Tax Act, 1961 in C.O. Case No. 24/04 against the petitioner by the Special Judge (Economic Offences), Dhanbad as well as the entire criminal prosecution against the petitioner is hereby quashed.