The Supreme Court’s judgment in the late Tamil Nadu Chief Minister J Jayalalithaa’s Disproportionate Assets case has an underlying warning to all public servants who accept gifts in cash and kind and later show it as part of their professional income.
In its judgment passed on Tuesday, the SC said that while doing so may be “legal” for the purposes of Income Tax assessment, the same will amount to an “unlawful source of income” while dealing with a corrupt public servant under the Prevention of Corruption Act, 1988.
During the course of hearing Jayalalithaa’s lawyers had argued in the SC that the former CM received many presents in form of cash, costly articles, gold, silver and foreign remittances, and these were “gifts” under her professional income. A total amount of Rs2.15 crore by way of cash and presents and a sum of Rs77.52 lakh as foreign remittance figured under this head.
The trial court which convicted Jayalalithaa and three others refused to accept this as a “lawful source of income”. The Karnataka High Court accepted gifts to be part of her income, but admitted this figure to the extent of Rs1.5 crore.
Before the SC, Jayalalithaa’s lawyer produced her Income-Tax return assessment of year 1992-93 disclosing the entire amount of over Rs2 crore as gifts. They argued that the celebration of birthday of a Chief Minister was a grand event and it was a norm for her admirers to present gifts by way of cash, demand draft, jewellery, silverware, etc., as a token of their appreciation and esteem she earned as a political personality and a leader.
Since the Income Tax authorities too had accepted this to be part of her professional income, Jayalalithaa’s lawyers failed to understand how the trial court dismissed it as “unlawful”.
The apex Bench of Justices PC Ghose and Amitava Roy upheld the trial court order in toto and said, “The endeavour to strike a distinction between ‘legal’ and ‘unlawful’ as sought to be made to portray gifts to constitute a lawful source of income is wholly misconstrued.”
Explaining further, the Bench said that under the Prevention of Corruption Act, the concept of gift taking by public servants has a different meaning altogether. The Bench said that Section 11 of PC Act, 1988 seeks to forbid a public servant from accepting any present or a valuable thing, as it is “likely” to influence the public servant to show official favour to a person giving such a valuable thing and thus affecting “purity in public life”.
Rejecting Jayalalithaa’s argument, the Bench held, “Disclosure of such gifts in the Income Tax returns of A1 (Jayalalithaa) and the orders of the Income Tax authorities on the basis thereof, do not validate the said receipts to elevate the same to lawful income to repel the charge of criminal misconduct under Section 13(1)(e) of PC Act.”