Allegation of using Personal Bank account of Employees for Income Tax Benefit: Gujarat HC dismisses petition to quash FIR [Read Order]

In a recent case, the Gujarat High Court dismissed the petition to quash the FIR alleging the use of using personal bank accounts of employees for income tax benefits. The allegation was that the petitioner has siphoned off money from the bank account of companies of the complainant by forging signatures, it is submitted that none of the cheques were returned with an endorsement of ‘signature mis-match’.

The petition under Articles 226 and 227 of the Constitution of India read with Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (“BNSS”), Jaldip Jitendrakumar Dave the petitioner has prayed to quash and set aside the FIR being C.R. No.11191042250198 of 2025 registered with Satellite Police Station, Ahmedabad City for the offences punishable under Sections 316(2), 316(4), 318(4), 336(2), 338, 339 and 61(2) of the Bharatiya Nyaya Sanhita, 2023 (“BNS”) and all the consequential proceedings arising therefrom.

The petitioner submitted that the petitioner has nothing to do with the offence and he is falsely implicated in the offense. It is submitted that the complainant is engaged in the business of consultancy and supply and purchase of several goods and services and engages in cash transaction or uses the personal bank account of its employees to gain some benefits in income taxre turns pursuant to which petitioner was ready to accept certain of money into his bank account on instructions of the complainant and his parents, who are the employer of present petitioner however, thereafter the petitioner has transferred the amount back into company’s account, which shows bonafides and intention of the petitioner.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

As regards the allegation of the complainant that the petitioner has siphoned off money from the bank account of the companies of the complainant by forging signatures, it is submitted that none of the cheques were returned with an endorsement of ‘signature mis-match’.

The APP has vehemently opposed the petition and argued that the petitioner has committed serious offence and investigation is at nascent stage and yet charge-sheet is not filed and therefore, this petition be dismissed.

The petitioner has created forged cheque book of without the knowledge of complainant and/or his parents and by forging signatures of parents of complainant, the petitioner has siphoned away total amount of Rs.1,64,00,481/- which he transferred in different bank accounts of his relatives and also through cash withdrawal and in this complaint is filed.

The petitioner has submitted that the petitioner has received money as per the instructions of Directors and the owner of the company and for tax planning purpose, same was withdrawn and subsequently re-deposited in the account of the company. Hence, there is no any offence or mal-practice adopted by the present petitioner but perusing the complaint it appears that when alleged incident took place, at that time, amount misappropriated was Rs.1,94,75,481/- by three accused and at that time the accused persons have accepted the misappropriation of said amount and out of the said amount, they had returned Rs.30,75,000/- and said fact is clearly mentioned in the FIR.

The said argument or defence is not acceptable at the stage as the complaint is filed for misappropriation of remaining amount of Rs.1,64,00,481/- and accused persons have during the period of years 2018 to 2025, from the company of parents of complainant as well as Anandjiwala Technical Consultancy LLP as the petitioner was employee, he has committed an offence by receiving the cheque books from the bank and put forged signature and he has received the money.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

Hence, prima facie offence under Sections 316(2), 316(4) and 318(4) of the BNS is made out as being an employee of the company, by winning over the trust and having control over the account of the company, alleged incident took place and thereafter he has forged the documents in connivance and collusion of co-accused. Hence, prima facie offence is made out.

The petitioner has argued that there is specific provision under the Limited Liability Partnership Act, 2008 for audit and nothing has come out during the audit as the company failed to maintain the account properly. Herein, no question of audit arises. The allegation against the petitioner is that by winning over the trust he has committed the offence of cheating by receiving the cheque books from the bank and has forged the signature and siphoned the amount as an employee.

All these arguments are in nature of defence and while deciding the quashing petition, Court has to consider only the allegations levelled in the complaint and as to whether prima facie offence is made out or not. Herein, prima facie offence is made out. Further, the complaint indicates that the offense was registered on 03.07.2025, and an ongoing investigation is in progress and at the initial stage, the petitioner has filed the petition for quashing and setting aside the complaint, which evidently appears filed with a view to stall further proceedings and investigation.

It is also appropriate to refer to the decision of the case of Emperor vs. Khwaja Nazir Ahmed it has been observed that in India, there is a statutory right on the part of the police to investigate the circumstances of an alleged cognizable crime without requiring any authority from the judicial authorities.

It is further observed that it would be an unfortunate result if it should be held possible to interfere with those statutory rights by an exercise of the inherent jurisdiction of the Court. It is further observed that the functions of the judiciary and the police are complementary, not overlapping, and the combination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function.

Considering the aforesaid facts, and settled position of law, the Court of Justice Hasmukh D. Suthar is unable to come to any conclusion that the offence is not made out. The petition stands dismissed at the admission stage.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates