Wilful tax-payment evasion requires deliberate evasive conduct; financial difficulty and delayed payment alone do not sustain prosecution.

Prosecution for wilful evasion of tax payment under Section 276(C)(2) requires conduct showing a deliberate attempt to avoid payment, not mere delay. Although Section 278E permits a presumption regarding culpable mental state, the stated circumstances disclosed no false entries, omissions, suppression, property alienation, or other evasive conduct. The assessed liability was initially computed incorrectly and later reduced through rectification; payment was delayed because of financial difficulty and made after receipt of a show-cause notice. On these facts, delayed payment alone did not constitute the offence, and the complaint was liable to be quashed.

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Issues: Whether delayed payment of assessed tax, without conduct establishing a wilful attempt to evade payment, attracts prosecution under Section 276(C)(2) of the Income-tax Act, 1961.

Analysis: Section 276(C)(2) of the Income-tax Act, 1961 is a penal provision requiring a wilful attempt to evade payment of tax, penalty or interest. Although Section 278E permits a presumption regarding culpable mental state, prosecution cannot be sustained where the surrounding conduct does not disclose wilfulness. The assessment liability had initially been computed erroneously and was subsequently reduced under Section 154. The record disclosed no false entry, omission, suppression, alienation of property, or other conduct directed towards evasion. The circumstances established only delayed payment, explained by financial difficulty, followed by payment upon receipt of the show-cause notice.

Conclusion: Mere delayed payment of tax, without a wilful attempt to evade payment, does not constitute the offence under Section 276(C)(2) of the Income-tax Act, 1961. The complaint was liable to be quashed.

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