2023 (12) TMI 62 - HC - Income Tax

Section 276CC prosecution quashed for non-filing return when advance tax paid exceeds liability by Rs. 3,000

The Madras HC quashed prosecution under Section 276CC for non-filing of income tax return. The petitioner filed return after receiving notice and had paid ... Offence punishable u/s 276CC - non filing of income tax return - on receipt of notice u/s 276CC petitioner filed his income of return, accordingly, the petitioner had paid Advance Tax, TDS, TCS, Self Assessment Tax - HELD THAT:- Proviso to Section 276CC gives some relief to genuine assessees. The proviso in clause (ii) of b to Section 276CC provides that if the tax payable determined by regular assessment has reduced by advance tax paid and tax deducted at source does not exceed Rs. 3,000/-, such an assessee shall not be prosecuted for not furnishing the return u/s 139(1) of the Income Tax Act. Therefore, this proviso takes care of genuine assessees who either file the returns belatedly but within the end of the assessment year or those who have paid substantial amounts of their tax dues by prepaid taxes from the rigor of the prosecution u/s 276CC of the Income Tax Act. Admittedly, the petitioner had paid taxes under the Heads of Advance Tax, TDS, TCS, Self Assessment Tax to the tune of Rs. 23,75,066/-. According to his returns, the total tax and interest payable by him is Rs. 23,74,610/-. Therefore, he claimed refund of Rs. 460/- and the proviso (ii) b of Section 276CC comes for rescue of the petitioner from the rigor of the prosecution under Section 276CC of the Income Tax Act. Therefore, the initiation of prosecution for the offence punishable u/s 276CC of the Income Tax Act cannot be sustained as against the petitioner and it is liable to be quashed. Decided in favour of assessee. Issues Involved:The judgment involves the quashing of proceedings in EOCC.No.168 of 2016 on the file of the Additional Chief Metropolitan Magistrate, Egmore, Chennai, related to the offence punishable under Section 276CC of the Income Tax Act, 1961.Details of the Judgment:Issue 1: Failure to File Income Tax ReturnThe respondent filed a complaint against the petitioner for not filing the income tax return for the assessment year 2013-2014, as required under Section 139(1) of the Income Tax Act. The petitioner was issued a show cause notice for wilful failure to file the return, which he did not respond to, leading to the initiation of prosecution under Section 276CC.Issue 2: Proviso to Section 276CCThe petitioner argued that the tax payable by him did not exceed Rs. 3,000, and he had claimed a refund, which should exempt him from prosecution under the proviso to Section 276CC. The Special Public Prosecutor contended that the petitioner's failure to file the return justified the prosecution, citing relevant case law supporting the application of Section 276CC.Issue 3: Interpretation of Section 276CCThe court examined the provisions of Section 276CC, emphasizing the mandatory nature of filing income tax returns under Section 139(1) and the consequences of non-compliance under Section 276CC. The court highlighted the importance of timely filing and the implications of the proviso under Section 276CC for genuine assesses.Conclusion:After considering the arguments and provisions of the Income Tax Act, the court found that the petitioner had paid taxes amounting to Rs. 23,75,066 for the assessment year 2013-2014, with a claimed refund of Rs. 460. As per the proviso to Section 276CC, the court concluded that the prosecution against the petitioner could not be sustained and quashed the proceedings in EOCC.No.168 of 2016. The judgment allowed the criminal original petition, leading to the closure of connected miscellaneous petitions.