Wilful intent to evade tax is essential; delayed payment of disclosed self-assessment tax did not justify prosecution.

Prosecution for tax evasion under Section 276C(2) of the Income-tax Act could not be sustained where the assessee had disclosed the income and self-assessed tax liability in the return and later paid the tax with interest before the prosecution notice. The court held that criminal liability requires a wilful attempt to evade tax, and mere belated remittance, without suppression, false entries, or other conduct indicating an intention to defeat recovery, does not amount to evasion. On those admitted facts, the requisite criminal intent was absent, so the complaint and consequential criminal proceedings were liable to be quashed.

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Issues: Whether a prosecution under Section 276C(2) of the Income-tax Act, 1961 could be sustained where the assessee had disclosed the tax liability in the return but paid the self-assessment tax belatedly, and whether such delayed payment amounted to a wilful attempt to evade tax.

Analysis: The return for the relevant assessment year disclosed the income and the self-assessed tax liability. The tax was subsequently paid with interest before the prosecution notice was issued. The governing principle applied was that criminal liability under Section 276C(2) requires a wilful attempt to evade tax, and mere delay in remittance, without suppression, false entry, or other conduct showing an intention to defeat recovery, does not amount to evasion. On the admitted facts, the delay did not establish the requisite criminal intent.

Conclusion: The prosecution was not maintainable on the basis of delayed payment alone, and the complaint and consequential criminal proceedings were liable to be quashed in favour of the petitioners.

Final Conclusion: Belated payment of admitted self-assessment tax, in the absence of any wilful attempt to evade, cannot sustain prosecution under the penal provision invoked.

Ratio Decidendi: Wilful intent to evade tax is an essential ingredient of prosecution for tax evasion, and mere delayed payment of disclosed tax liability, even if interest is payable, does not by itself constitute evasion.

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