The Madhya Pradesh High Court has observed that mere non-filing of Income Tax Return would not automatically dislodge the source of income of the complainant in a cheque bounce case under Section 138 of the Negotiable Instruments Act.
The case of the complainant was that the accused had obtained a loan of Rs.10, 00,000 from him and assured that she would refund the said amount within a period of six months. In lieu of the said amount, she issued a cheque which got dishonoured. The accused was convicted by the Trial court, which was later upheld by the District Court.
The contention taken by the accused was that the complainant had failed to prove his source of income. It was contended that since the complainant never disclosed his source of income in the Income Tax Return and never filed his Income Tax Return, it should be presumed that he did not have any source of income.
In the revision petition filed by the accused, Justice G.S.Ahluwalia observed:
“Non-payment of Income Tax is a matter between the revenue and the assessee. If the assessee has not disclosed his income in the Income Tax Return, then the Income Tax Department is well within its rights to reopen the assessment of income of the assessee and to take action as per the provisions of Income Tax Act. However, non-filing of Income Tax Return by itself would not mean that the complainant had no source of income and thus, no adverse inference can be drawn in this regard only because of absence of Income Tax Return.”
The bench observed that the courts below were right in holding that the cheque was issued by the accused in discharge of legal liability which was returned by the Bank on her instructions. Where the accused has failed to satisfactorily explain the circumstances under which the cheque was issued by the accused or misused by the complainant, then it can be safely inferred/ presumed that the cheque was issued in discharge of legally recoverable dept/liability, the court added.