TaxTMI 
TaxTMI 
2018 (10) TMI 1508
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....g offence under Section 276 CC of Income Tax Act, 1961 (for short "IT Act") read with Section 278 B of IT Act. By the impugned order, the ACMM took cognizance and issued process against the petitioners, they including company M/s MGF Development Ltd. (company accused), petitioner in Crl.M.C.603/2015, its managing director Mr. Arun Mitter, petitioner in Crl.M.C. 607/2015 and two directors namely Shravan Gupta and Rakshit Jain, petitioners in Crl.M.C. Nos. 606/2015 and 602/2015. The petitions are resisted by the respondent (complainant). 2. It is clear from the averments in the criminal complaint and the documents filed therewith that the criminal action has been initiated on the allegations that the petitioners (shown in the array of accused) willfully committed breach of the requirements of Section 139 (1) of IT Act by failing to file return of the income of company in respect of the assessment year (AY) 2011-12 by the stipulated date i.e. 30.09.2011, the default having been also committed vis-a-vis the compliance required with the notice under Section 142 (1) IT Act which was issued later. The return of the income for AY 2011-12 was actually filed on 28.03.2013, concededly beyo....
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....y of criminal prosecution ascertained. It is the submission of the petitioners that since the criminal complaint was filed on sanction for prosecution issued on 14.01.2015 by the CIT, it is a case of the prosecutor being the judge of his own cause. 5. The arguments to the above effect do not appeal to this Court. As is clear from the proviso to Section 279 (1) of IT Act, the prosecution can be initiated at the instance of the authorities superior to the assessing authority, they including officer of the level of CIT or even those above in hierarchy who are permitted to issue instructions or directions for institution of proceedings under Section 279 (1) which provision also governs the process relating to offence under Section 276 CC. There was no impropriety on the part of CIT, in this view, in issuing the show cause notice on 16.07.2014 followed by the grant of sanction for prosecution on 14.01.2015 it resulting in the criminal complaint being filed on 20.01.2015. 6. The submission that the fact that assessment order in the meanwhile had been passed on 30.03.2014 has not been taken note of or, for that matter, the submission that the filing of the income-tax return (ITR) on....
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....ctor for not initiating prosecution proceedings under Section 276-CC of the Act. Section 276-CC contemplates that an offence is committed on the non-filing of the return and it is totally unrelated to the pendency of assessment proceedings except for the second part of the offence for determination of the sentence of the offence, the Department may resort to best judgment assessment or otherwise to past years to determine the extent of the breach. The language of Section 276-CC, in our view, is clear so also the legislative intention...." 8. It is the argument of the petitioners that the assessing authority (DCIT) had not imposed any penalty under Section 271 F which was mandatory in the event of it being concluded that there was a willful failure to furnish return of income. It is argued that, in this view, it has to be inferred that in the opinion of the assessing authority there was no willful default and, thus, the requisite mens rea required for Section 276 CC is amiss. 9. Noticeably, Section 278 E of IT Act permits presumption of culpable mental state to be raised. Prior to the amendment by Finance Act, 2002, there was a mandate in the provision contained in Section 271....
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....he complainant (Revenue) to bring the said allegation home by requisite evidence at the trial. The petitioners will have ample opportunity to discredit the evidence to such effect and bring out facts to the contrary during such proceedings. 13. Aside from the company, the managing director and the two directors of the company are also being prosecuted and for this reference is made by both sides to the provision contained in Section 278 B of IT Act, the subsection (1) whereof reads thus:- "278 (1) Where an offence under this Act has been committed by a company every person who, at the time the offence was committed, was incharge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly." 14. The learned counsel for the petitioners submitted that in this context, the provision contained in Section 140 (C) of IT Act will have to be kept in mind. The said provision, to the extent relevant and relied upon, reads thus:- "140. Return by whom to be verified The return under section 115 WD or section 139 shall be....