Section 420 IPC – can fake assessment order of tax lead to cheating?

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This topic contains 1 reply, has 2 voices, and was last updated by Dr. Ashok Dhamija Dr. Ashok Dhamija 4 months, 1 week ago.

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  • #4910

    Anonymous
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    In a case of my friend, it is alleged that by producing a fake assessment order of Income Tax officer, he avoided payment of proper income tax and thus he cheated the department. In this case, my friend has not made the tax department to deliver any property under Section 420 IPC. Then how can it be called cheating? Can you please clarify the legal point involved in this?

  • #4911

    There is a judgment of the Supreme Court which directly covers the question raised by you. So, let me refer to this judgment and reproduce relevant text from it.

    In the case of Ishwarlal Girdharilal Parekh v. State of Maharashtra, 1969 Cri LJ 271 : AIR 1969 SC 40, the Supreme Court held that under the scheme of the Income Tax Act, it is clear that the assessment order determines the total income of the assessee, and the tax payable, on the basis of such assessment. The assessment order has to be served, on the assessee. The tax is demanded by the issue of a notice, under the Act; but the tax demanded is on the basis of the assessment order communicated to an assessee. It was held that the communicated order of assessment, received by an assessee is 'property', since it is of great importance, to an assessee, as containing a computation, of his total assessable income and as a determination of his tax liability. The Supreme Court held that:

    “…the word “property”, occurring in Section 420 IPC, does not necessarily mean that the thing, of which a delivery is dishonestly desired by the person who cheats, must have a money value or a market value, in the hand of the person cheated. Even if the thing has no money value, in the hand of the person cheated, but becomes a thing of value, in the hand of the person, who may get possession of it, as a result of the cheating practised by him, it would still fall within the connotation of the term ‘property’, in Section 420 IPC.”

    The Supreme Court further held that:

    “Communication, or service of an assessment order, is part of the procedure of the assessment itself. But it can be held that, if the necessary allegations are established, the accused have dishonestly induced the Income Tax Officer, to deliver the particular property viz. the assessment order, as passed by him, in and by which a considerably low amount has been determined, as the total income of the assessee, on the basis of which the amount of tax, has been fixed. Nor are we impressed with the contention, that the deception, if at all, is practised, not when the assessment order is delivered, but at the stage, when the computation, of the total income, is made, by the Income Tax Officer. The process of “cheating”, employed by an assessee, if successful, would have the result of dishonestly inducing the Income Tax Officer to make a wrong assessment order and communicate the same to an assessee.”

    It was held that the case was fit for framing of a charge under Section 420 IPC.

    Similarly, it can be said that if a fake assessment order has been obtained or produced (may be with connivance of the staff of the Income tax department, though you have not mentioned necessary details of the case), it deprives the department of the tax that is due or it benefits the assessee by avoiding payment of proper amount of tax. So, it can be said to be delivery of a property or of a valuable security. Thus, in appropriate circumstances, if other ingredients of the offence under Section 420 IPC are fulfilled, such an offence may have been committed. The actual answer will depend on the detailed facts of the case, and you may consult some lawyer by showing him all relevant documents.

         


    Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.

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