Petitioner's criminal petition dismissed for income tax return non-filing and concealment under Section 276CC

The HC dismissed the petitioner's criminal petition seeking relief from prosecution under Section 276CC of the Income Tax Act. The petitioner failed to file income tax returns for assessment year 2012-2013, and after departmental search and seizure, concealment of income was discovered. Despite the petitioner's claims of delay due to seized documents, advanced age, and health issues, the court held that mens rea was clearly established as the petitioner initially suppressed income in the return filed on 18.04.2013 and only disclosed the concealed income in a subsequent return filed on 20.11.2015 after detection. The court ruled that rebuttal of presumption under Section 278E must be proven during trial, not in the petition.

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Issues Involved:
1. Non-filing of income tax return for the assessment year 2012-2013.
2. Allegations of concealment of income and wilful default.
3. Bar of limitation for initiating prosecution.
4. Validity of criminal prosecution despite the dropping of penalty proceedings.

Summary:

1. Non-filing of Income Tax Return:
The petitioner was accused of not filing his income tax return for the assessment year 2012-2013. A search conducted on 03.09.2013 revealed that the petitioner did not file his return within the stipulated time under Section 139(1) of the Income Tax Act. Despite being served a notice under Section 153A on 29.04.2014 to file the return within 30 days, the petitioner filed it belatedly on 20.11.2015.

2. Allegations of Concealment and Wilful Default:
The petitioner was found to have concealed the purchase of an immovable property and did not disclose the true income in his return. The court noted that non-filing of returns within the due date constitutes an offence under Section 276CC of the Income Tax Act. The subsequent filing of returns does not protect the defaulter from prosecution as established in the judgments of Sasi Enterprises Vs. Assistant Commissioner of Income Tax and Prakash Nath Khanna Vs. CIT.

3. Bar of Limitation:
The petitioner argued that the complaint was barred by limitation as the sanction for prosecution was granted on 27.09.2017, more than three years after the alleged non-filing period ended on 07.06.2014. However, the court held that the criminal prosecution is independent of the penalty proceedings and can be initiated irrespective of the limitation period for penalty.

4. Validity of Criminal Prosecution:
Despite the dropping of penalty proceedings by the Tribunal on the ground of limitation, the court maintained that it does not preclude the initiation of prosecution for the offence under Section 276CC. The Tribunal's decision on penalty does not bind the criminal prosecution, as adjudication proceedings and criminal prosecution are independent of each other. The court relied on the judgment in Radheshyam Kejriwal Vs. State of West Bengal to support this view.

Conclusion:
The court dismissed the petition to quash the prosecution, stating that the grounds raised by the petitioner could be considered only during the trial. The existence of mens rea was presumed, and it was for the petitioner to rebut this presumption during the trial. The criminal original petition was dismissed, and the connected miscellaneous petition was closed.

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