Mens rea is essential for income tax false statement offences; unwilful omission cannot sustain conviction.

Section 277 of the Income-tax Act, 1961 requires a false statement or account made knowingly, or with belief that it is false, or without belief in its truth; a mere incorrect return or inadvertent omission is insufficient. An unchallenged finding that the omission to disclose notional rental income was not wilful meant the necessary knowledge or belief as to falsity was absent, and that factual finding bound the revisional court. On that basis, mens rea could not be ignored, and the conviction could not be sustained. The assessee was entitled to acquittal.

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Issues: Whether a conviction under section 277 of the Income-tax Act, 1961 could be sustained when the finding that the omission to mention notional rental income was not wilful had attained finality.

Analysis: Section 277 requires that the statement or account be false and that the maker knows or believes it to be false or does not believe it to be true. A mere incorrect statement or inadvertent omission is not enough. The unchallenged finding that the omission in the return was not wilful meant that the assessee did not have the requisite knowledge or belief as to falsity. That factual finding also bound the revisional court, and the conviction could not be supported by treating mens rea as unnecessary.

Conclusion: The conviction under section 277 of the Income-tax Act, 1961 was unsustainable and the assessee was entitled to acquittal.

Ratio Decidendi: For an offence under section 277 of the Income-tax Act, 1961, mens rea is an essential ingredient, and a conviction cannot stand where the statement is not shown to have been made knowingly or believing it to be false.

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