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Karnataka High Court Grants Tax Exemption for Voluntary Donations to Educational Institutions

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Karnataka High Court

Pr Commissioner Of Income-1 Tax (Exemptions) V. M/S Rashtreeya Sikshana Samithi Trust 

Income Tax Appeal No. 554 Of 2018

Bench-   HON’BLE MR JUSTICE P.S.DINESH KUMAR AND THE HON’BLE MR JUSTICE T.G. SHIVASHANKARE GOWDA

Decided On 05-06-2023

Facts of the case-

The respondent assessee in this case is a charitable trust registered under Section 12A of the Income Tax Act, 1961. The trust has also obtained approval under Sections 11 and 12. In the assessment year 2012-13, the assessee initially filed returns of income declaring a nil income. However, the case was selected for scrutiny, and notices under Sections 142(1) and 143(2) of the Income Tax Act were issued. In response, the assessee filed revised returns, claiming the difference between the original and revised returns as corpus donations. The assessee stated that the trust was exempt in the original returns and had disclosed the income under the heading ‘other income’ in the revised returns.

The Additional Commissioner of Income Tax, Exemptions, reviewed the case for scrutiny and assessment. The Assessing Officer (AO) passed an assessment order, considering the income from other sources as income for the trust. The Commissioner of Income Tax (Appeals) [CIT (A)] upheld the AO’s order. However, the Income Tax Appellate Tribunal (ITAT) reversed the AO’s order and held that the assessee was entitled to exemption.

Subsequently, the department challenged the ITAT’s order. The department argued that the assessee had collected a sum of Rs. 27,23,55,000 as a donation in violation of the Karnataka Educational Institutions (Prohibition of Capitation Fee) Act, 1984. According to the department, this violation of the KEI Act rendered the assessee ineligible for exemption, as it would also constitute a violation of Sections 11 and 12 of the Income Tax Act.

In response, the assessee contended that the absence of any action initiated under the KEI Act does not automatically imply that there was no violation. The assessee argued that the income tax authorities have the authority to consider violations of any statute while framing assessments.

Judgement

The honorable bench consisting of Justice P.S. Dinesh Kumar and Justice T.G. Shivashankare Gowda has granted a tax exemption on voluntary donations received by educational institutions. The court’s observation highlighted several crucial factors:

Firstly, the educational institution in question was found to be engaged in charitable education activities as defined by Section 2(15) of the relevant legislation.

Secondly, it was determined that the institution had appropriately applied or accumulated funds in accordance with the requirements outlined in Section 11(1)(a), including the explanation provided therein, as well as Section 11(2).

Furthermore, the institution had obtained proper registration under Section 12A, demonstrating compliance with the relevant provisions.

Importantly, the institution had not violated Section 13, which ensures that there is no private gain and that all funds are solely directed towards educational purposes. This reaffirmed that the accumulation and application of funds adhered to the provisions of Section 11.

Consequently, the court concluded that the assessing officer’s assertion, based on mere assumption and conjecture, that the institution had violated the KEI (Prohibition of Capitation Fee) Act, was unwarranted. The Income Tax Appellate Tribunal (ITAT) appropriately overturned this incorrect assumption.

In light of these findings, the court ordered the grant of exemption under sections 11 and 12 to the assessee, affirming that the institution met all the necessary criteria for tax benefits.

JUDGEMENT REVIEWED BY ABHAY SHUKLA

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Karnataka High Court Reverses Life Sentence in Murder Case: Demands Corroborating Evidence for Eyewitness Testimony

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Karnataka High Court

K P Pushpesh & Others V. State of Karnataka

CRIMINAL APPEAL NO. 879 OF 2016 C/W CRIMINAL APPEAL NO. 2118 OF 2016

Bench-  HON’BLE MR JUSTICE K.SOMASHEKAR AND HON’BLE MR JUSTICE RAJESH RAI K

Decided On 21-06-2023

Facts of the case-

In the case presented by the prosecution, it was alleged that on April 17, 2014, there existed ill-will between the deceased individual named Nousheer and accused individuals numbered 1 to 3. The prosecution claimed that the accused parties, acting in concert with a common intention to commit murder, drove in a car to the vicinity of CW.6-Raman’s house where the deceased Nousheer was heading.

Accused Nos. 1 and 2 allegedly restrained Nousheer near CW.6-Raman’s house and proceeded to assault him with a sickle, inflicting grievous injuries on his head, face, neck, shoulder, and both hands, resulting in his death. It was further alleged that accused No. 3 facilitated the murder by providing information to accused Nos. 1 and 2 regarding the movements of the deceased.

The prosecution’s case primarily relied on the testimony of two neighbors who were purported eyewitnesses to the incident.

However, the defense counsels argued that the trial court placed undue reliance on the evidence provided by PW.22 and PW.24, the alleged eyewitnesses, without adequately scrutinizing or appreciating their testimony, which was deemed highly inconsistent.

The defense pointed out that the eyewitnesses did not make any effort to intervene or raise an alarm during the incident, nor did they promptly inform the police. Furthermore, they failed to identify the weapons that were supposedly used in the commission of the crime.

Judgement

The court has acquitted three youths who were previously convicted and sentenced to life imprisonment for charges of murder. The court found that there were material contradictions in the evidence provided by eyewitnesses to the incident, and the prosecution failed to corroborate their testimony with any other material.

The court began by referring to the evidence of the complainant, who was declared hostile by the prosecution. It noted that the complainant admitted that the complaint was written by his advocate, Sunil, and he did not review the contents of the complaint. Furthermore, the complainant was unaware of the reason behind the commission of the incident.

Upon reviewing the complaint, the court observed a discrepancy between the names mentioned in the complaint and the names mentioned in the First Information Report (FIR) registered by the police. The prosecution failed to explain this inconsistency during the investigation or before the trial court. Additionally, the police dropped one of the accused persons mentioned in the FIR and implicated another accused person not mentioned in the original complaint. The court deemed this discrepancy and subsequent actions by the prosecution as unexplained. Consequently, the evidence provided by the complainant, who turned hostile, was deemed unhelpful to the prosecution’s case.

The court then assessed the evidence provided by the eyewitnesses and concluded that their testimony could not be relied upon to prove the guilt of the accused to the fullest extent. It noted that the prosecution failed to comply with Section 100(4) of the Criminal Procedure Code (CrPC) regarding the proper recovery of weapons used in the offence. The investigation officer did not secure the presence of neighbors in the vicinity during the recovery of the weapons, despite the presence of several houses nearby. This non-compliance with the provisions of Section 100(4) of the CrPC raised doubts in the court’s mind regarding the recovery process.

The court emphasized that compliance with the aforementioned provisions is generally sought in the given circumstances of a case. It further stated that when the evidence of eyewitnesses is untrustworthy and shaky, the recovery of material objects plays a vital role. However, in this case, the prosecution failed to prove such vital circumstances by providing proper evidence.

Consequently, the court held that although the prosecution had proven the homicidal death of the deceased beyond reasonable doubt, it had failed to establish a connection between the accused and the deceased’s death based on the evidence provided by the eyewitnesses and other circumstantial evidence.

The court criticized the Sessions Judge for ignoring reasonable doubts that arose from the prosecution’s evidence and its conduct in suppressing a material witness. The inconsistencies in lodging the complaint against four persons, subsequently registering the case against three persons, and finally dropping one accused and implicating another created doubt in the prosecution’s case from the beginning. The court concluded that the benefit of doubt must be given to the accused persons, and therefore, the prosecution failed to prove the charges against them beyond reasonable doubt.

Additionally, the court dismissed the appeal filed by the State government challenging the trial court’s order of acquitting the accused for offences punishable under the Arms Act.

JUDGEMENT REVIEWED BY ABHAY SHUKLA

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Landmark Ruling: Karnataka High Court Downgrades Conviction, Sentences Man for Grievous Hurt Instead of Attempted Murder, in Testicle Squeezing Case

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Karnataka High Court

Parameshwarappa V. The State

CRIMINAL APPEAL NO. 242 OF 2012

Bench-   HON’BLE MR JUSTICE K.NATARAJAN

Decided On 01-06-2023

Facts of the case-

The prosecution’s case revolves around the complaint lodged by PW.1, Omkarappa, whose statement was recorded by the police in the hospital on 16.03.2010. According to the complaint (Ex.P.1), on the evening of 15.03.2010 at around 6:00 p.m., the complainant was driving his tractor when the accused suddenly appeared in front of his motorcycle and stared at him. Later that night, at approximately 10:00 p.m., during a village fair procession for Narasimhaswamy, while the complainant and others were dancing, the accused allegedly approached him with the intention to commit murder. The accused instigated a quarrel, verbally abused the complainant using derogatory language, and physically assaulted him by squeezing his testicles, causing internal injuries to a vital part of his body.

Several eyewitnesses, namely Ananda, Rama, Murthy, and Kumara, intervened and pacified the quarrel. They then helped the injured PW.1 and took him to the hospital. At the hospital, a Medico-Legal Case (MLC) was prepared and forwarded to the police. Subsequently, the police recorded the complainant’s statement and registered the FIR in Crime No.26/2010. The accused was apprehended, placed in judicial custody, and later released on bail. The investigation was completed, and a charge-sheet was filed against the accused. During the trial, the accused pleaded not guilty to the charges, opting for a trial. The prosecution presented ten witnesses (PWs.1 to 10) and nine documents (Exs.P.1 to P.9) as evidence. After the conclusion of the prosecution’s evidence, the statement of the accused was recorded under Section 313 of the Criminal Procedure Code (Cr.P.C.). The accused, however, chose to deny all allegations and did not present any evidence in his defense. Following the arguments, the trial court found the accused guilty, convicted him, and imposed the aforementioned prison sentence. Dissatisfied with the verdict, the appellant has appealed to the Court.

Judgement

the court made modifications to the conviction of an accused individual who was initially charged with attempted murder. The court instead convicted the accused of a lesser offense of grievous hurt under Section 325 of the Indian Penal Code (IPC). The basis for this decision was the act of squeezing the testicles of the complainant during a fight.

The court examined the circumstances of the case and stated that there was a quarrel between the accused and the complainant at the scene. During this quarrel, the accused chose to squeeze the testicles of the complainant. The court reasoned that this act alone did not demonstrate an intention or premeditation to commit murder. If the accused had indeed intended to commit murder, the court noted, it would have been expected for the accused to carry deadly weapons.

The court emphasized that the accused had not brought any deadly weapons with him, indicating that there was no premeditated plan to commit murder. However, the court acknowledged that the testicles are a vital part of the body and causing harm to them can be potentially life-threatening. In this particular case, as the complainant had to undergo surgery and have his testicles removed, the court held that the offense committed by the accused fell under the category of grievous hurt.

Consequently, the court concluded that the sentence passed by the trial court, finding the accused guilty under Section 307 of the IPC (attempt to murder), was incorrect. The court determined that the offense committed by the accused clearly fell within the scope of Section 325 of the IPC (grievous hurt). Therefore, the court partly allowed the appeal and modified the conviction accordingly.

JUDGEMENT REVIEWED BY ABHAY SHUKLA

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Karnataka High Court: Sentencing Power Allows Lesser Offense, but Not Higher, Without Altered Charges

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Karnataka High Court

XYZ V.  State of Karnataka

CRIMINAL APPEAL NO. 2097 OF 2018

Bench-  CRIMINAL APPEAL NO. 2097 OF 2018

Decided On 30-05-2023

Facts of the case-

The prosecution’s case revolves around a complaint filed by PW1/Roopamma, the mother of the victim. According to the complaint (Ex.P1), Roopamma’s daughter went to school on November 24, 2016, but later went missing. The police initiated an investigation upon receiving the complaint and eventually located the victim, PW2/victim girl. She was found and taken to Chintamani police station, and later transferred to the jurisdiction of Kolar Police Station.

During the investigation, the victim’s statement was recorded under Section 164 of the Criminal Procedure Code (Cr.P.C). Subsequently, she underwent a medical examination, which revealed that the accused had abducted her on his motorcycle while she was on her way home from school. He took her to a relative’s house, where he sexually assaulted her. After learning about the incident, the victim’s mother filed a complaint. The accused later dropped the victim near Chintamani police station. On November 29, 2016, the accused was arrested.

Following the completion of the investigation, the police filed a charge sheet against the appellant, charging him with offenses punishable under Sections 363, 376 of the Indian Penal Code (IPC), and Section 4 of the Protection of Children from Sexual Offenses (POCSO) Act.

The accused was in judicial custody, and during the trial, he denied the charges but chose not to present a defense. After the charges were framed for the offenses punishable under Sections 363, 376 of the IPC, and Section 4 of the POCSO Act, the prosecution presented its evidence, including the examination of 20 witnesses, the submission of 29 documents, and the introduction of 11 material objects. Subsequently, the accused’s statement was recorded under Section 313 of the Cr.P.C.

The trial court found the appellant guilty of the offenses punishable under Sections 363, 376 of the IPC, and Section 6 of the POCSO Act. As a result, the appellant was sentenced to seven years of imprisonment and a fine of Rs. 2000/- for the offense under Section 363 of the IPC, seven years of imprisonment and a fine of Rs. 5000/- for the offense under Section 376 of the IPC, and ten years of imprisonment and a fine of Rs. 5000/- for the offense under Section 6 of the POCSO Act. In case of default in paying the fines, the appellant would undergo one month of additional imprisonment. Additionally, compensation was awarded to the victim.

Unsatisfied with the conviction and sentence, the appellant has brought the case before the court.

Judgement

The High Court has ruled that while the trial court has the authority to find an accused guilty of a lesser offense even if the charges were framed for more serious offenses, it cannot convict and sentence the accused for a major offense carrying a higher imprisonment term without modifying the charges as per Section 216 of the Criminal Procedure Code (CrPC). The High Court found that the trial court had committed a clear illegality and error by imposing a sentence under Section 376 of the Indian Penal Code (IPC) and Section 6 of the Protection of Children from Sexual Offenses (POCSO) Act. The bench referred to Section 42 of the Act, stating that it empowers the court to impose alternative punishment if the accused is found guilty of offenses punishable under both Section 376 of the IPC and the POCSO Act, with the latter being of greater degree.

The court further explained that the trial court cannot impose double sentences for the same offense that falls under both Section 376 of the IPC and Section 6 of the POCSO Act. While the court can find the accused guilty of both offenses, it must award punishment for only one offense, specifically the one that carries the greater degree of punishment.

In light of the evidence presented, including the testimonies of the victim (PW2), her mother (PW1), the medical officer (PW9), and the investigation officer, the court acquitted the accused of charges of sexual assault. It determined that the prosecution had failed to prove that the victim was sexually assaulted on November 24, 2016, or until November 26, 2016, based on the evidence, including the victim’s statement recorded under Section 164 of the CrPC.

However, the court concluded that the prosecution was able to establish that the accused had abducted the victim girl, taken her to Andhra Pradesh, and detained her, which is punishable under Sections 363 and 342 of the IPC.

Considering that the appellant had already been in custody for over seven years, surpassing the prescribed punishment of seven years under Section 363 of the IPC, and that the offense punishable under Section 342 of the IPC carries a one-year imprisonment term with a fine, the bench took into account the provisions of Section 428 of the CrPC and adjusted the sentences already served by the appellant.

Accordingly, the court partially allowed the appeal, setting aside the conviction and sentence under Section 376 of the IPC and Section 6 of the POCSO Act, while upholding the conviction and sentence for the offenses under Sections 363 and 342 of the IPC. The sentences already undergone by the appellant were adjusted accordingly.

JUDGEMENT REVIEWED BY ABHAY SHUKLA

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Decoding Section 306 IPC: Karnataka High Court Emphasizes the Importance of Positive Act of Instigation in Suicides

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Karnataka High Court

V V Singara Velu & ANR V. State of Karnataka & ANR

CRIMINAL PETITION No.3095 OF 2022

Bench-  HON’BLE MR. JUSTICE M. NAGAPRASANNA

Decided On 16-06-2023

Facts of the case-

Accused No.1, who is the brother of the complainant, and Accused No.2, who is the wife of the complainant’s brother, are involved in a legal dispute regarding their father’s property. Accused No.1 has filed a partition suit (O.S.No.25938 of 2018) that is currently pending adjudication.

In relation to the property matter, Petitioner No.1 (Accused No.1) and his wife have lodged complaints against the complainant, his wife (Smt. Revathi), and their son, G. Vikram. However, on the night of November 23, 2021, G. Vikram, aged approximately 33, tragically took his own life by hanging himself in a room on the second floor of the residence. He left a death note accusing Petitioners 1 and 2 of confronting and threatening him near the Bruhat Bengaluru Mahanagara Palike Office in Bangalore in October 2021. According to the note, they had threatened to ruin his parents’ lives. This incident is believed to be the reason for G. Vikram’s decision to commit suicide.

Following the son’s death, a complaint was lodged, alleging that the petitioners (Accused No.1 and No.2) were responsible for his demise. The complaint led to the registration of a case (Crime No. 444 of 2021) under Section 306 r/w 34 of the Indian Penal Code, holding the petitioners as accused. Subsequently, the police conducted an investigation and filed a charge sheet, formally implicating the petitioners as accused in the aforementioned crime.

As a result, the petitioners have approached the Court with the present petition, challenging the filing of the charge sheet against them.

Judgement

The court has quashed the prosecution initiated against a couple who were accused of abetting the suicide of their nephew through threats made during a property dispute. The bench emphasized that abetment is the essential element of Section 306 of the Indian Penal Code (IPC). If an individual instigates or compels another person to the extent that they commit suicide, the offense would fall under abetment to suicide and become punishable. The definition of abetment is provided under Section 107 of the IPC. Therefore, the presence of the ingredients outlined in Section 107 of the IPC is necessary for an offense under Section 306 of the IPC, the court held.

In reaching this conclusion, the court referred to various Supreme Court decisions, highlighting that abetment involves a mental process of instigating or intentionally aiding someone in carrying out a particular action. The court emphasized that there should be a positive act on the part of the accused to instigate or aid in the commission of suicide. Without such a positive act, convictions in such cases cannot be sustained, as there must be clear mens rea (guilty mind) on the part of the accused to drive the deceased to commit such an act.

Furthermore, the court observed that for an offense under Section 306 of the IPC, both mens rea (guilty mind) and actus reus (guilty act) must be present. There must be a positive act of instigation or aid in suicide.

In the present case, the court noted that there was no proximity between the alleged instigations by the petitioners and the act of suicide. Consequently, the court quashed the proceedings against the accused.

JUDGEMENT REVIEWED BY ABHAY SHUKLA

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