Belated return and statutory presumption of culpable mental state did not justify quashing income-tax prosecution at the threshold.

CBDT Circular No. 24 of 2019 was held not to apply retrospectively to a prosecution complaint already filed under section 276-CC of the Income-tax Act, because the circular operated from its issuance and covered only pending cases where complaint had not yet been instituted. A belated return filed under section 139(4) did not cure the statutory default of failing to furnish the return in due time under section 139(1) or the notice period under section 139(2), and payment of tax and interest did not by itself justify quashing. The presumption of culpable mental state under section 278-E was treated as a matter for trial, so the complaint and summoning order were not quashed.

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Issues: (i) Whether CBDT Circular No. 24 of 2019 applied retrospectively to a prosecution complaint already filed under section 276-CC of the Income-tax Act, 1961. (ii) Whether the complaint and summoning order were liable to be quashed on the ground that the return had been filed belatedly with tax and interest paid, and that there was no culpable mental state at the threshold stage.

Issue (i): Whether CBDT Circular No. 24 of 2019 applied retrospectively to a prosecution complaint already filed under section 276-CC of the Income-tax Act, 1961.

Analysis: The circular itself stated that it would operate from the date of issuance and would apply to pending cases where complaint was yet to be filed. Since the complaint in the present matter had already been filed before the circular came into force, the circular could not be invoked to undo or invalidate the prosecution. The cited authorities on beneficial circulars were distinguished on their facts and on the language used in the present circular.

Conclusion: The circular did not help the applicant and was not applicable to the already instituted complaint.

Issue (ii): Whether the complaint and summoning order were liable to be quashed on the ground that the return had been filed belatedly with tax and interest paid, and that there was no culpable mental state at the threshold stage.

Analysis: The expression "in due time" in section 276-CC was held to refer to the time prescribed under section 139(1) or the notice period under section 139(2), and a later return under section 139(4) does not erase the statutory infraction. The Court also held that section 278-E creates a presumption of culpable mental state, and the absence of such mental state is a matter for trial. The applicant's reliance on decisions dealing with other statutes or different factual settings was found to be distinguishable.

Conclusion: The prosecution was not liable to be quashed, and the plea of absence of culpable mental state was left for trial.

Final Conclusion: The application under section 482 CrPC failed, and the prosecution for the income-tax offence was allowed to proceed.

Ratio Decidendi: A belated return filed under section 139(4) does not cure failure to furnish the return "in due time" under section 276-CC, and the rebuttal of the statutory presumption under section 278-E is a matter for trial, not for quashing at the threshold.

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