TARIQ MEHMOOD JAHANGIRI, J. Through the instant appeal filed under Section 203-A of Income Tax Ordinance, 2001 read with all relevant provisions of Cr.PC., the appellant has challenged order dated 19.01.2018, passed by D&SJ/Special Judge (Customs, Taxation & Anti-Smuggling) Court, Rawalpindi / I.C.T.
02. Brief facts of the case are that the appellant / Director I&I (IR) FBR-Islamabad filed a complaint No.70 of 2017 against respondents / accused under section 203 of the Income Tax Ordinance, 2001 for summoning and prosecution under section 192/192-A of the Ordinance alleging therein that during the course of investigation/inquiry of tax affairs of M/S NIMR (Pvt) Ltd (NTN-3362564) and its directors (respondents No.1 to 5) which was carried out on the basis of intelligence information that Directors of M/S NIMR (Pvt) Ltd (Ramada Hotel, Islamabad) having their assets in their names found beyond their declared (source of income) undervalued which further revealed during the preliminary analysis of tax returns of Directors and company found not commensurate with their assets being declared by all its Directors for the tax years 2014, 2015 and 2016 thus by way of mis- declaration or undervalued / suppression of business sales/concealment in true income, they committed an offence punishable under section 192/192-A of the Ordinance.
03. On the receipt of the complaint, after going its contents all the respondents No.1 to 5 were summoned who put their appearance and filed their bonds of appearance. Necessary copies were handed over to the respondents and the matter was fixed for framing of charge for 12.01.2018, but in the meanwhile the respondents filed a petition u/s 265-K Cr.P.C. over which notice to complainant as well as SPP were issued by the learned trial Court and after hearing both the parties, acquitted respondents No.1 to 5 u/s 265-K Cr.P.C. read with section 265-D Cr.P.C. and dismissed the complaint filed by the appellant.
04. Learned counsel for the appellant, inter alia, contends that sufficient evidence was available against the respondents; learned trial Court has passed the order of acquittal in a hasty and haphazard manner without framing the charge and recording evidence. It is even apparent from bare reading of the impugned order that the learned trial Court passed the same even without going through the overwhelming incriminating material available on record; impugned order is result of misreading and non-reading of evidence collected by prosecution, which is part of record; learned trial Court has altogether ignored the available data on record and extended undue and extraordinary favor to respondents No.1 to 5 / accused; impugned order of acquittal is not sustainable in the eyes of law, hence liable to be set aside.
5. Conversely, learned counsel for respondents states that impugned order has been passed by learned trial Court strictly in accordance with law; there was no chance of conviction of respondents in the light of evidence produced by the appellant; the appellant has failed to produce any legal and cogent / incriminating evidence against respondents / accused, hence impugned order of acquittal was rightly passed by learned trial Court and has prayed for dismissal of instant appeal.
6. I have heard the learned counsel for the appellant, learned counsel for respondents and have perused the record with their able assistance.
07. Case of respondents was thoroughly investigated by the appellant; after the completion of investigation it revealed that Directors of M/S NIMR (Pvt) Ltd (Ramada Hotel, Islamabad) made assets in their names which were beyond their declared source of income. Preliminary analysis of tax returns of the Directors and the Company revealed that the Company did not file its Income Tax Return for Tax Year 2013 and claimed a loss of Rs.24.4 million in audited financial statements for Tax Year 2013; analysis further revealed that declarations made by the company did not commensurate with the assets made by its directors; evidence was collected regarding suppression of business sales/concealment of income, undervalued properties of Directors, unexplained credit entries in the personal accounts of the Directors and construction of NIMR Building at Plot No. 01, Club Road Islamabad. It further revealed that the company, in order to conceal its true income, maintained several baenami bank accounts in the names of its employees and several undeclared bank accounts in the names of directors. The appellant annexed sufficient evidence with complaint but the learned trial Court without recording evidence has acquitted the respondents and dismissed the complaint, even charge against the respondents was not framed.
8. Main reason for acquittal of the respondents mentioned in the impugned order dated 19.01.2018, is that notice u/s 176 of Income Tax Ordinance has been issued by unauthorized person / Assistant Director and not by the Director, whereas as per Column No.2, Sr.No.23 of the Table of S.R.O 115(1)/2015, Deputy / Assistant Director is competent to issue notice u/s 176 of the Ordinance, hence notice was rightly issued by competent authority; another point for acquittal of respondents mentioned in impugned order is that special audit has not been conducted, whereas as per sections 192 & 192-A of the Ordinance, no such requirement of audit is stipulated before filing of the complaint.
9. Further there is no such requirement for issuing notices u/s 176 of the Ordinance to respondents for prosecuting them u/s 192 & 192-A of the Ordinance. Main purpose of a notice under section 176 of the Ordinance is to seek information from any person to collect evidence, if so required.
10. Section 68 of the Ordinance deals with fair market value of any property i.e. what a property can ordinarily fetch or which is determined by FBR or District Officer (Revenue). As per investigation report, actual sale value of the properties was concealed by the respondents by undervaluing the same through sale deeds/agreements to sell. The evidence to that effect was in possession of the prosecution in the form of agreements to sell, sale deeds and affidavits of the sellers etc but the same was not recorded by the learned trial Court and without conducting trial respondents were acquitted.
11. It is held by Hon'ble Supreme Court of Pakistan in a case titled as "Model Customs Collectorate, Islamabad vs. Aamir Mumtaz Qureshi" (2022 SCMR 1861) that: "There is no cavil to the proposition that by enacting sections 249-A and 265-K, Cr.P.C., the Legislature provided power to acquit an accused at any stage of the case if, after hearing the prosecutor and the accused and for reasons to be recorded, it considers that the charge is groundless or that there is no probability of the accused being convicted of any offence. But acquittal, under the said sections, could be made only if there was no probability of conviction of the accused. However, each case must be judged on its own special facts and circumstances and the reasons are to be recorded in support of conclusion that charge is groundless or that there is no probability of accused being convicted. If there is remote probability of conviction then of course courts are not empowered to invoke the said provisions i.e. 249-A and 265-K Cr.P.C.
Reliance in this regard may be placed on the case of The State through Advocate-General, Sindh High Court of Karachi v. Raja Abdul Rehman (2005 SCMR 1544) wherein it was held that though there is no bar for an accused person to file application under section 249-A, Cr.P.C. at any stage of the proceedings of the case yet the facts and circumstances of the prosecution case will have to be kept in mind and considered in deciding the viability or feasibility of filing an application at any particular stage. The special or peculiar facts and circumstances of a prosecution case may not warrant filing of an application at a stage."
12. The august Supreme Court of Pakistan in another case titled as "Bashir Ahmad v. Zafar ul Islam" (PLD 2004 SC 298) did not approve decision of criminal cases on an application under section 249-A, Cr.P.C. or such allied or similar provisions of law, namely, section 265-K or section 561-A, Cr.P.C. and observed that usually a criminal case should be allowed to be disposed of on merits after recording of the prosecution evidence, statement of the accused under section 342, Cr.P.C., recording of statement of accused under section 340(2), Cr.P.C. if so desired by the accused persons and hearing the arguments of the counsel of the parties and that the provisions of section 249-A, section 265-K and section 561 A of the Cr.P.C. should not normally be pressed into action for decision of fate of a criminal case especially when apparently there is probability of conviction after recording evidence. In the present case, trial court disrupted the normal course of law against the mandate of supra judgment i.e. Bashir Ahmad v. Zafar-ul-Islam and others (PLD 2004 SC 298). In the case of The State through Collector Customs and Excise, Quetta v. Azam Malik and others (PLD 2005 SC 686) it is held as under:- "22. This brings us to the third question i.e. whether the prosecution had sufficient material/evidence to warrant the prosecution of the respondents or there was no probability of accused being convicted of any offence. We have gone through the FIR registered against the respondents and the absconding co-accused as also the evidence led before the Court. There were serious allegations that there was tampering/overwriting/cutting of the relevant register of bills of entry, the matter was inquired into at the departmental level and the allegations were found to be correct. Ex facie there was documentary, oral and circumstantial evidence to prove the charges. In the face of this material the Trial Court could not have invoked section 265-K, Cr.P.C. and acquit the respondents."
Reliance may also be placed on the cases of "Muhammad Sharif v. The State" (PLD 1999 SC 1063), "Ghulam Farooq Tarar v. Rizwan Ahmad and others" (2008 SCMR 383).
13. It is further held by the Hon'ble Supreme Court of Pakistan in the supra judgment of "Model Customs Collectorate, Islamabad vs. Aamir Mumtaz Qureshi" that: "in appellate or revisional proceedings, the same sanctity cannot be accorded to acquittals at intermediary stages such as under, section 249-A or 265-K Cr.P.C., as available for those recorded and based on full-fledged trial after recording of evidence. In appeal or revision proceedings, the order of acquittal of the accused under section 249-A or section 265-K of the Cr.P.C. would not have the same sanctity as orders of acquittal on merits. Consequently, the principles which are to be observed and applied in setting aside concurrent findings of acquittal or the principle relating to the presumption of double innocence when an accused is acquitted after a full-fledged inquiry and trial, would not be applicable to the acquittals under section 249-A, Cr.P.C. or section 265-K, Cr.P.C."
14. In the instant case, if the allegations leveled in the complaint supported by the preliminary evidence are admitted to be true, it could not be said at that stage by the trial Court that there was no probability of conviction of the respondent-accused. In order to ascertain the genuineness of the allegations, the trial Court ought to have allowed the prosecution to lead evidence. In the circumstances, I am of the view that the learned trial Court acted in haste in passing the order of acquittal which is, therefore, not sustainable.
15. In view of above prospective, instant appeal is allowed and the impugned order dated 19.01.2018, passed by D&SJ/Special Judge (Customs, Taxation & Anti-Smuggling) Court, Rawalpindi / I.C.T. is set aside. Learned trial Court is directed to frame charge, record the evidence and conclude the trial in all respects within a period of six (06) months, as the matter pertains to the year 2018. If the appellant tries to linger on the proceedings or does not produce the evidence as per directions issued by the Court, learned trial Court may proceed in accordance with law, by invoking penal provisions.
16. Respondents / accused are also at liberty to file afresh petition under section 265-K Cr.P.C., if so advised, during the course of trial and learned trial Court shall decide the same strictly in accordance with law and purely on merits but shall conclude the trial within a period of six (06) months by submitting compliance report to the Additional Registrar (Judicial) of this Court.
17. Parties are directed to appear before the learned trial Court on 28.11.2022.