TaxTMI 
TaxTMI 
2010 (2) TMI 107
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....escribed form under section 139(1) of the Income-tax Act (hereinafter referred to as "the Act")within the specified time. On his failure to do so, he was issued with notices under sections 142 and 148 of the Act and even thereafter, he did not comply with the statutory requirement. Subsequently, return was filed belatedly on August 31, 1994, and March 28, 1996, respectively, to P. W.5, who sent the same to P. W. 4 for due assessment. On receipt of the same, the assessment orders were passed by P. W. 4 on March 29, 1996, against which, the accused filed appeals and the same were dismissed on June 10,1996 confirming the order of P.W.4. As the respondent-assessee was not filing returns in due time, after obtaining due permission from the Commissioner of Income-tax, the complaints have been filed by P.W.1 against the accused for the offence under section 276CC of the Act. 4. The trial court, after examining the witnesses, questioned the respondent-accused under section 313 of the Criminal Procedure Code, about the incriminating evidence found against him. The respondent-accused, having denied the same, raised a plea that he filed the return within the extended time. The trial court, a....
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.... in default, the respondent-accused is guilty of the offence under section 276CC of the Act. Hence, he prayed for conviction of the respondent-accused. 6. Per contra, learned counsel for the respondent-accused would contend that it is true that the respondent has not filed the returns in time, but as per section 139(2) of the Act, time has been extended and in pursuance of the same, he submitted his returns. Since interest has been levied and recovered, the respondent-accused is not guilty of the offence under section 276CC of the Act. He further submits that when once tax has been accepted, the appellant-Income-tax Department is barred from taking criminal prosecution. It amounts to double jeopardy. Learned counsel for the respondent-accused relied upon the decisions of the Supreme Court, this court and other High Courts and prayed for dismissal of the criminal appeals. 7. Admittedly, the respondent-assessee ought to have filed his returns for the assessment years 1991-92 (pertaining to Crl. A. No. 692 of 2002) and 1992-93 (pertaining to Crl. A. No. 693 of 2002). The statutory dates for filing of the income-tax returns are August 31, 1991 and August 31, 1992. The trial court in ....
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....: "So, after the amendment, the interest to be paid is absolute, not-withstanding extension of date by the income-tax Officer, under the proviso to section 139(1). Under the unamended provisions, the discretion to extend the time for furnishing the return could not be beyond the 30th day of September of the assessment year, or the 31st day of December of the assessment year, as the case may be, and such extension was in the discretion of the income-tax Officer. After amendment, the discretion of the Income-tax Officer has been retained, but the restricted period up to 30th day of September or 31st day of December of the assessment year has been removed. This change clearly shows that fixing of a limit to the extended period was not thought necessary since, in any event, the assessee was liable to pay interest, irrespective of the extension of lime for furnishing the return. Again, the penal section 276C which came into the statute book with effect from April 1, 1971 underwent a change and now section 276CC is the relevant provision. Under section 276CC, a person who wilfully fails to furnish in due time the return of income which he is required to furnish under sub-section (1) of ....
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....ncome-tax Appellate Tribunal, Hyderabad. Those questions are taken and reproduced below from one case and in the others they are substantially the same. '(1) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that by the levy of interest under section 139 of the Income-tax Act, 1961, the Income-tax Officer must be deemed to have granted time up to the date of filing the return of income? (2) Whether on the facts and in the circumstances of the case the Appellate Tribunal was correct in holding that even if the return was treated as filed under section 139(4) penalty was not liable? (3) Whether on the facts and in the circumstances of the case, the penalty liable within the meaning of section 271(1)(a) shall be with reference to the net tax remaining due and payable at the date of final assessment after deduction of the tax paid under section 140A/141? 2. Learned counsel for the parties are agreed that answer to question No. 1 would be against the Revenue and in favour of the respondent-assessee on the ratio of CIT v. M. Chandda Sekhar [1985] 151 ITR 433 (SC) ; [1985] 1 SCC 283; [1985] Tax LR 497 and thus would not be requi....
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....the instant case, the acquittal of the assessee in a prosecution subsequently launched and in which some of the documents which had constituted the basis for the levy of penalty under section 271 (1) (c) had not been put in evidence, could not be regarded as having the effect of removing the foundation on the basis of which the penalty had been levied under section 271 (1) (c). The Tribunal was correct in upholding the penalty that had been levied under section 271(1)(c)" 13. Learned counsel for the respondent-accused also relied upon the decision of the Supreme Court reported in K. C. Builders v. Asst. CIT [2004] 265 ITR 562, in which, the Supreme Court held that when once the penalties imposed on the assessee under section 271(1)(c) of the Act, are cancelled on the basis of the conclusive finding of the Appellate Tribunal that there is no concealment of income, prosecution of the assessee for an offence under section 276C for wilful evasion of tax cannot be proceeded with thereafter and that the quashing of the prosecution is automatic. 14. At this juncture, learned special public prosecutor appearing for the appellant-Income-tax Department would rely upon the decision of the S....
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....ution; (iii) The non-initiation of penalty proceedings does not lead to a presumption that the default in payment was for good and sufficient reasons or that the assessee was not obliged to establish that there were good and sufficient reasons for the default in payment; (iv) Non-initiation of penalty proceedings in a case cannot be equated with a case where the penalty proceedings were initiated and a finding is recorded by the competent authority that there were good and sufficient reasons for the delay in payment; (v) There is no statutory requirement either under section 279 or under any other provision of the Act to give notice to the assessee before criminal proceedings are initiated against him- In other words, a notice or a right of being heard before launching criminal proceedings under the Income-tax Act for the offences mentioned under Chapter XXII is not mandatory and proceedings cannot be quashed on this ground. However, if such notice is given by the Department, it may check frivolous and unnecessary criminal cases or such cases where the default in payment is technical or committed in good faith. The question of compounding the offence may also be considered by th....
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....ection with notices under sections 139(2) and 148 were omitted from section 271 of the Act, the result would be that after the Income-tax Officer or the Appellate Assistant Commissioner comes to the finding that any person has without reasonable cause failed to furnish a return, he can direct such person to pay the penalty. Even though the customary method of asking an assessee to show cause against the payment of penalty is that of issuing a notice under section 139(2), this cannot be said to be the sole method of issuing notices contemplated by section 271. If the default has once occurred there has to be an express provision of law for relieving a defaulter of the penalty. The condonation of delay and the exemption of the defaulter from payment cannot occur indirectly by the issuance of a notice for some other kind of default made under the provisions of the Act apart from those contained in section 139(1). Moreover, if a contrary view were taken it would put a premium on concealment of income and evasion of tax. If there is any vagueness in a taxing law it has to be interpreted in favour of the taxpayer. There is, however, no authority for the view that the law has to be interp....
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....ic prosecutor appearing for the appellant-Income-tax Department further relied upon the decision of the Supreme Court reported in Prakash Nath Khanna v. CIT [2004] 266 ITR 1 and submitted that one of the significant terms used in section 276CC of the Act for the offence of failure to furnish return of income, is "in due time" and the time within which the return of income is to be furnished is indicated only in sub-section (1) of section 139 and not in sub-section (4) and that even if a return is filed under section 139(4), that would not dilute the infraction in not furnishing the return within the time as prescribed under sub-section (1) of section 139 of the Act. In the said decision, the Supreme Court held as follows (headnote): "One of the significant terms used in section 276CC (offence of failure to furnish return of income) of the Income-tax Act, 1961, is 'in due time'. The time within which the return of income is to be furnished is indicated only in sub-section (1) of section 139 and not in sub-section (4). Even if a return is filed under section 139(4) that would not dilute the infraction in not furnishing the return within the time as prescribed under sub-section (1) o....
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....inal offence. That Act when it meant proceeding to be taken by the Customs authorities themselves, as is the case in most of the items to Schedule to section 167, has empowered those authorities to deal with the offending articles by way of confiscation or with the person infringing those rules by way of imposition of penalties in contra distinction to a sentence of imprisonment or fine or both. When a criminal prosecution and punishment of a criminal, in the sense of the penal law, is intended the section makes a specific reference to a trial by a Magistrate, a conviction by such magistrate and on such conviction to imprisonment or fine or both. The Legislature was therefore aware of the distinction between a proceeding before the Customs authorities by way of enforcing the preventive and penal provisions of the Schedule and a criminal prosecution before a Magistrate with a view to punishing offenders under the provisions of the same section." 23. Learned special public prosecutor appearing for the appellant-Income- tax Department would also rely upon the Constitution Bench decision of the Supreme Court reported in Assistant Collector of Customs v. L. R. Meiwani, AIR 1970 SC 962,....
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....t reads as follows: "276CC. Failure to furnish returns of income.-If a person wilfully fails to furnish in due time the return of income which he is required to furnish under sub-section (1) of section 139 or by notice given under clause (i) of sub-section (1) of section 142 or section 148 or section 153A, he shall be punishable,- (i) in a case where the amount of tax which would have been evaded if the failure had not been discovered, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine; (ii) in any other case, with imprisonment for a term which shall not be less than three months but which may extend to three years and with fine: Provided that a person shall not be proceeded against under this section for failure to furnish in due time the return of income under sub-section (1) of section 139- (i) for any assessment year commencing prior to the 1st day of April, 1975; or (ii) for any assessment year commencing on or after the 1st day of April, 1975, if- (a) the return is furnished by him before the expiry of the assessment year; or (b) the tax payable by h....