TaxTMI 
TaxTMI 
2017 (4) TMI 973
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....of 1996, titled as ACIT Vs. Janeshwar Lal Rajeshwar Lal & others, whereby the learned Chief Judicial Magistrate, Shimla acquitted the respondents for the commission of offence under Sections 276 (CC) read with Section 278 (B) of the Income Tax Act. At the very outset, it is necessary to mention that respondent No. 2 Rajeshwar Lal had expired when the appeal was pending before this Court and vide order dated 30.11.2016, he has been deleted from the array of respondents. Now the appeal is surviving against respondent No. 1, 3, 4 and 5. 2. Briefly stated the facts giving rise to the present appeal are that the complaint under Section 276(CC) read with Section 278(B) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") was main....
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....re then reexamined, under Section 313 Cr. P.C., on 14.9.2006. However, their defence remained similar that due to illness of accused No. 2, Rajeshwar Lal Jain, the return for the period aforesaid could not be filed in time. 4. Learned counsel for the appellant has argued that the learned Court below has committed illegality in acquitting the accused persons, as their act itself shows that they had committed the offence punishable under Section 276 (CC) read with Section 278 B of the Act and were liable to be convicted as per the provisions of the Act. Learned Court below, just on the basis of surmises and conjectures, acquitted the accused. 5. On the other hand, learned defence counsel has argued that the learned Court below has commi....
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....r 1994. He had issued notice, Ex. PW3/A, on 17.1.1994. The said notice was replied by accused No. 2 Rajeshwar Lal that there has been no willful failure on the part of the firm to furnish the return of Income Tax, within stipulated period, allowed under Section 139 of the Income Tax Act, 1961, as he being partner had been looking into the accounts for furnishing the return of Income Tax, but could not do so due to heard trouble. However, this explanation has not been considered at all by the authorities. 10. The accused, in their defence examined Sh. K.B. Sharma, Senior Assistant, H.P. High Court as DW-1, who has proved on record copy of reference, Ex. DW1/A, copy of orders, Ext. DW1/B to Ex. DW1/H, Ext. DW1/J to Ex. DW1/M and copy of le....
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....ng from diabetes and angina and that angina is a heart problem and as per Ex., DW2/B, Rajeshwar Lal Jain was suffering from hypertension disease. According to him, Ex. DW3/C, pertain to his unit, according to which, from 5.11.1990 to 9.11.1990, said Rajeshwar Lal Jain remained admitted in the hospital in the CCU ward for coronary artery heart disease. According to him, patients suffering from such a disease are unable to do hard work. He too has been crossexamined, but without any assistance. It is, therefore, apparent that accused No. 2 was suffering from aforesaid disease and was unable to undertake hard work and since he only was maintaining the accounts of the accused No. 1, firm qua filing the returns, certainly it was not possible for....
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....liability, the intention of the Legislature is that the penalty should serve as a deterrent. The creation of an offence by statute proceeds on the assumption that society suffers injury by the act of omission of the defaulter and that a deterrent sentence must be imposed to discourage the repetition of the offence. In the case of a proceeding under Section 271(1)(a), however, it seems that the intention of the Legislature is to emphasise the fact of loss of revenue and to provide a remedy for such loss, although no doubt an element of coercion is present in the penalty. In this connection, the terms in which the penalty falls to be measured are significant. Unless there is something in the language of the statute indicating the need to esta....
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....and others versus Arun Chandra Sinha, Assistant Commissioner of Income-Tax and others, ITR Vol. 211 (1995) 79 has held as under: "The person accused would be deprived of the benefit or right of compounding the offence before the initiation of proceedings, if the prosecution were launched without any prior notice. In addition, I respectfully adopt the reasoning of the Karnataka High Court in P.V. Pai's case (1993) 200 ITR 717, as well as that of the Rajasthan High Court in Shree Singhvi Bros.' case (1991) 187 ITR 219 to hold that the person accused is entitled to notice before the initiation of proceedings in respect of which a right of compounding has been given under Section 279(2) of the Act." 17. As the accused persons have n....