Prevention of Corruption Act, 1988 – exoneration of the accused in the income tax case cannot absolve under PC Act – Important Judgment of the Supreme Court.
In 1995, FIR / Charge sheet was filed against the appellant R.C.Sabharwal, Additional Chief Architect of New Delhi Municipal Corporation and his son Puneet. Charge against the appellant Puneet was under Section 109 of IPC read with Sections 13(1)(c) and 13(2) of the Prevention of Corruption Act, 1988, while the charge against appellant R.C.Sabharwal was under Sections 13(1)(c) and 13(2) of the PC Act,1988, on the allegations that RC Sabharwal owned assets disproportionate to known income and his son Puneet had abetted him in the said offence.
On 21.2.2006, the Special Judge passed the Order on charge. Charges were framed on 28.2.2006. Thereafter, the appellant R.C.Sabharwal was exonerated by the Income Tax Appellate Tribunal.
This was challenged in the High Court of Delhi. However, the writ petitions were dismissed on 1.12.2020.
In appeals before the Supreme Court, one of the contentions was since the appellant was exonerated in the income tax proceedings, the criminal prosecution on the same set of facts and circumstances cannot be allowed to continue. The re-assessment was done on the complaint of CBI. It was stated that the ITAT held that the income arising from properties of various entities were wrongly added to the income of the appellant. The appellant was not the owner of those entities and as a result, the properties of those entities could not be held to be under the ownership of R.C.Sabharwal. In view of this, it was said that no prosecution for disproportionate assets is made out. Order of the Income Tax Appellate Tribunal should result per se in quashing the criminal proceedings and discharge of the accused.
HELD that the income tax assessment orders are qua income tax liability and do not necessarily attest to the lawfulness of the source of income. There is no basis to nip the criminal prosecution in the bud on the ground of exoneration of the appellant in income tax reassessment proceedings.
The probative value of the Orders of IT authorities including Tribunal and subsequent assessment orders are not conclusive proof to rely on for discharge of accused persons. The scope of adjudication in both the proceedings are markedly different and therefore, the findings in civil adjudication cannot be a ground for discharge of accused. The proceedings under IT Act and its evidentiary value are a matter of trial and cannot be conclusive proof for discharge of accused.
Judgment dated 19.3.2024 in Criminal Appeal NO.1682 of 2024 (SLP (Criminal No.2044 of 2021) of Puneet Sabharwal Vs. CBI with connected appeal.
