Indian evidence act.

Hi Pratik,

Here are some thoughts:

1. Our judicial system is based on common law. A lot was setup by the british and there are several laws since the Kings & Queens were ruling British Empire and a lot of laws today find their roots in those ancient laws.

2. The evidence act is saying plaintiff or defendants dont have to prove or provide evidence for what is considered public law or information generated or maintained by govt.

PS: I am no advocate. I am sure there are more learned people who can throw better light. Please feel free to correct my mistakes.

Srinivas

Evidence vs common sense

Madras High Court.

One does not have to refer to the provisions of the Evidence Act to prove obvious facts, says T. C. A. Ramanujam,J.

PROCEEDINGS for the levy and collection of tax and penalty are judicial in nature. The assessing officer (AO) has to act independently in a judicial manner. But the term ``judicial proceedings'' has a special connotation, different from what civil courts ascribe. The AO is not fettered or bound by technical rules about evidence contained in the Indian Evidence Act, 1872. He may act on material which may not normally be accepted as evidence in a court of law.

The Supreme Court had, in the well-known Dhakeswari Cotton Mills (26 ITR 775 at 782) case, ruled that the Evidence Act may have no application to tax assessment proceedings. However, the court also clarified later, in Chuharmal vs CIT (172 ITR 250 at 255 SC), that when the taxing authorities are desirous of invoking the principles of the Evidence Act in proceedings before them, they are not prevented from doing so. All that is required is that whatever material they collect will have to be placed before the tax-paying assessee if adverse inference is going to be drawn -- audi alteram partem is a well-known principle of natural justice.

Assessments made on the basis of materials not brought to the notice of the tax-payer will be violative of the principles of natural justice (CIT vs East Coast Commercial Co. Ltd, 63 ITR 449). While exercising quasi-judicial powers, the tax authorities m ust act in a fair -- not partisan -- manner. The scales cannot be weighted against the assessee. In the leading CIT vs Simon Carwes Ltd (105 ITR 212) case, the Supreme Court expressed its inability to subscribe to the view that unless the assessing autho rities exercised the power in a manner most beneficial to the Revenue, and consequently most adverse to the assessee, they should be deemed not to have exercised it in a proper and judicious manner. Even if he collects information from private sources, h e is duty-bound to disclose the substance of the enquiry to the assessee before making the assessment.

Courts have often been confronted with photocopies, tape-recorded evidence and also electronic mail. The Supreme Court had, in Moosa S. Madha and Azam S. Madha vs CIT (89 ITR 65 SC), ruled that photostat copies have very little evidentiary value. But if a foreign document is otherwise relevant and proved according to law, its photocopy can be admitted in evidence provided such copy is duly authenticated in the manner prescribed by the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948 (Vimal Ch andra Gulecha vs ITO, 134 ITR 119 at 130, Rajasthan).

However, a photostat of a document will be admissible in evidence if the original is also produced. Tape-recorded conversation can only be relied upon as corroborative evidence of conversation deposed by the parties to the conversation. In the absence of corroborating evidence, no court can rely on the tape-recorded evidence -- as held in, among others, the N. Srirama Reddy vs V. V. Giri (AIR 1971 SC 1162) case. The Supreme Court had also laid down conditions for the admissibility of speeches recorded i n tapes. These can be `documents' as defined in Section 3 of the Evidence Act. They are like photographs. Before accepting such evidence, the voice of the person must be identified by the maker of the record or by others who can recognise the voice. Evid ence must be let in to rule out possibilities of tampering with the record. Admissibility will also depend on the rules of relevancy found in the Evidence Act.

Once the AO entertains a doubt regarding the correctness of the return, the assessee is duty-bound to prove -- by producing necessary materials -- his return. The power to reject the return and the evidence in support thereof is considered inherent and i mplied in the officer's power to enquire into the total income of the assessee. The officer, however, is not bound to rely on such evidence. Books of account maintained in the regular course of business afford prima facie proof of the entries and correct ness thereof.

Section 34 of the Evidence Act can always be relied on in this regard. But loose-leaf account books are of lesser evidentiary value. There is a presumption as to the regularity of official records contained in Section 114 of the Evidence Act (Omnia Praes umuntur Rite Esse Acta). All acts are presumed to have been rightly and regularly done. The material relied on may not strictly be evidence admissible under the Evidence Act. At this stage, courts often take judicial notice of certain facts which need no t be proved, where administrative and quasi-judicial authorities can take official notice of wider varieties of facts which need not be proved before them.

The field of consideration in income-tax assessments is far wider than the evidence which is strictly relevant and admissible under the Evidence Act. The Act itself refers to different types of presumptions such as rebuttable, irrebuttable and conclusive proof. There can be no presumption of bad faith against an assessee unless there is sufficient material on record. Can the court take judicial notice of notorious facts? Notoriety for smuggling or black market may provide a suspicious background, but su ch suspicion cannot be the basis for assessment.

The Supreme Court, in CIT vs Durga Prasad More (82 ITR 540 at 546), observed thus: ``Science has not yet invented any instrument to test the reliability of the evidence placed before a court or tribunal. Therefore, the courts and tribunals have to judge the evidence before them by applying the test of human probabilities. Human minds may differ as to the reliability of a piece of evidence. But in that sphere the decision of the final fact-finding authority is made conclusive by law.''

CIT vs L. K. S. Ganee

In this case (244 ITR 130), L. K. S. Ganee, a dealer in lottery tickets, completed his assessment on the basis of an estimate of income. The tax authorities were of the view that in this line of business it was not be possible to have proper accounts and verify the expenses or the claims for unsold tickets, as persons in this trade had to deal with a large number of hawkers and petty traders who do not themselves maintain accounts. Verification was not possible and income had necessarily to be estimated . On top of such estimate of income, the Department chose to levy a penalty for concealment under Section 271 (1)(C) of the Income-Tax (I-T) Act, 1961.

The Tribunal, however, cancelled the penalty and referred to a similar case (S. S. Manian & Co -- ITA 2347 M, 1986, dated March 13, 1989). While cancelling the penalty, the Tribunal observed: ``Taking judicial notice of the peculiar features obtaining in this business of lottery sales, the order of the Commissioner of Income Tax (Appeals) is upheld for the reasons that in such a state of affairs estimate was inevitable at each stage of the proceedings and merely because there was variation in the estima te of the income, mens rea cannot be attributed to the assessee.''

The Tribunal also rejected the reference application. The Department took the matter before the Madras High Court. Objection was taken to the fact that the Tribunal was taking judicial notice of the peculiar features obtaining in the business of sale of lottery tickets. Such taking of judicial notice, it was contended, was not permissible under the law. Section 56 of the Evidence Act prescribes that judicially noticeable facts need not be proved. Section 57 provides the necessary and requisite facts of which courts must take judicial notice. The section refers to laws in force in India and the UK, Articles of War for the Indian Army, the course of proceedings of Parliament in the UK and India, seals of courts in India and England, the Accession and Sig n manual of the British sovereign, the existence, title and national flag of every state or sovereign, the divisions of time, the geographic divisions of the world, public festivals, fasts and notified holidays, the names of officers of the court, and so on.

The Madras High Court reproduced the relevant section from the Evidence Act, and observed: ``On the face of the provision contained in Sections 56 and 57 of the Indian Evidence Act, it appears that taking judicial notice of peculiar features obtaining in the business of sale of lottery tickets by the Tribunal is not permissible.'' The High Court directed the Tribunal to state a case and refer the question of law for its opinion.

The High Court has gone by a technicality in Section 57 while construing a reference by the Tribunal to facts which can be judicially taken notice of. Obviously what the Tribunal meant was not the phrase employed in Section 57 but things which normally p revail and strike one's eye in the day-to-day commercial world. These are matters of common sense and do not require elaborate evidence. One does not have to go to the provision of the Evidence Act to prove certain obvious facts.

In quite a number of instances, courts have resorted to taking notice of the widely prevalent practices and customs of the community while deciding important questions of law. Even in cases of interpretation of direct tax statutes, the courts have refer red to the widely prevalent presumption of the existence of black money. In the Special Bearer Bonds case (1981 ASC 2138), the bearer bonds legislation was challenged as violative of Article 14. The majority judgment of the apex court pointed out that un der Article 14, there is a presumption of constitutionality and the burden lies on him who assails an Act to show that Article 14 is violated.

The Supreme Court observed: ``The court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation.'' It was o n the basis of an appreciation of the peculiar circumstances of the need to mop up undisclosed incomes that the courts have refused to interfere when the Voluntary Disclosure of Income Scheme (VDIS) was challenged. There are certain obvious facts in the economy which need no proof before courts of law. These facts need not be laid down in precise terms as done in Section 57 of the Evidence Act. No law is needed to take note of such facts. The Madras High Court has been too technical in giving the meanin g of Section 57 to the term judicial notice.

The Evidence Act itself is an archaic law of 1872. There are 3,000 laws relating to the days of the East India Company and the British Raj, which have to be dumped. It is a pity that even in the new millennium, Section 57 and the like are still being quo ted by courts. The Law Commission had, several years back, suggested redrafting of the penal code and the Evidence Act -- a much-needed reform.