Paragraph numbers below are the court’s original numbering, recovered from the source text.
22. In case of Sahara, in addition we have the adjudication by the Income Tax Settlement Commission. The order has been placed on record along with I.A.No.4.'<fhe Settlement Commission has observed c that the scrutiny of entries.on loose papers, computer prints~hard disk, pen drives etc. have revealed that the transactions noted on documents . were not genuine and have no evidentiary value and that details in these loose papers, computer print outs, hard disk and pen drive etc. do not ., comply with the requirement of the Indian Evidence Act and are not admissible evidence. It further observed that the department has no 1r c evidence to prove that entries in these loose papers and'._electronic data· were kept regularly during the course "f business of the concerned bqsiness house and the fact that these entries were fabriCated,-noll- genuine was proved. It held as well that the PCIT/DR have not been able to show and substantiate the nature and source of receipts as well as nature and reason of payments and have failed to prove evidentiary value of loose papers and electronic documents within the legal P,aranieters. The Commission has also observed that Department•has · not peen able to make out a clear case of taxing such income in the hands of the applicant firm on the basis ofthe~e documents.
23. It is apparent fliat the Commission has record.ed a finding that transactions noted in the documents were not genuine and thus has not attached.any evidentiary value to the pen drive, ha~d disk, computer loose papers, computer printouts.
24. Since.it is not disputed that for entries relied on in these loose papers and electronic data were not regularly kept during course ·of business, such entries were discussed in the order dated 11.l l.2016 passed in Sahara,'s case by the Settlement Commission and the documents have not been relied upon by the Com.mission against assessee, and thus. 5ucJ1 dopuments have no evidentiary value against thin! parties. On th~ basis of the materials which have been placed on record, we are ofthe considered opinion that no case is made out to direct iavestjgation against any of the persons named in the Birla's documents or in the docum~nts A-8, A-9 and A-·l 0 etc. of Stihara.
25. This Court, in the decision ·ofLalita Kumari versus Government • of Uttar Pradesh.and others, 2014(2) SCC 1 has laid down that when there is commission of offence apparent from the complaint and a cognizable offence is made out, inv.estigation should normally be ordere~ and the falsity of the allegations can be ascertained during the course of investigation. In our opinion, the decision ofLalita Kumari (supra) is of no help to the petitioner for seeking direction for an investigation from a Court on the basis of docu[llents which are irrelevant, an<I per se not G . cognizable in law as piece of evidence and inadmissible in evidence-and thus· a· roving in~uiry cannot be ordered on such legally unsustainable material. . . .
26. In the case of State ofHary11na and Others versus Bhajan Lal and others, 1992 Supp (I) SCC 335, this Co,urt has laid down principles· COMMON CAUSE (A REGISTERED SOCIETY) AND OTHERS v. UNION OF INDIA AND OTHERS in regard to quashing the F.I.R. The Court can quash FIR also if situation warrant even before investigation takes place.in certain circumstances. This Court has laid down thus: "102. x·x xx x ( 1) Where the allegations made.in the first information report of the complaint, even if they are taken at .their face value and accepted in their entirety do not prima fac{e constitute any offence or make out a case against the accused .. (2) Where the allegations in the first information report and other . materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2)°ofthe Code. (3) Where the uncontroverted allegations.made in the FIR or . complaint and the evidence collected in support of the same do c not disclose the commission ofany offence and make out a case~ D : against the accused. ( 4) Where tl)e allegations inthe FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code. (5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proc~eding against the accused. (6) Where thet~ is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance· of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. c (2017} 1 S.C.R.
27. Considering the aforBsaid principles· which have been laid dowt1, we. are of the opinion that the materials ·in questiofi ·are not good enough tci constitute offences to <;lirect the registration of F.I.R. and investigati;n therein. The materials. should qualify the test as per the aforesaid decision. The complaint should not be improbable and must show sufficient ground and commission of pffence on the basis of which registration of a case can be ordered. The materials in question are not only irrelevant but are also legally inadmissible under.Section 34 of the Evidence Act, more so with respect to third parties and considering the explanation which have been made by the Birla Group and.Sahara Group, we l!re of the opinion that it would not be legally justified, safe, just and proper to direct investigation, keeping in view principles laid down in the cases ofBhajan Lal and V.C. Shukla (supra). –
28. In view of the materials which have been placed on record and the peculiar facts and circumstances proj~ted in the case, we find that no case is made out to dfrect the investigation as prayed for.
29. Thus, we find no merit in Interlocutory Application No. 3 supported by I.A. No. 4. The applications deserve dismissal and are hereby dismissed. · Nidhi Jain Applications dismissed.