AI Drafter 
TaxTMI 
TaxTMI 
2021 (4) TMI 957
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....ts alleging offence under Section 276 C (2) of the Income Tax Act are sought to be quashed on the ground that a mere failure to pay the income tax based on the self assessment would not constitute the offence under that section. Admittedly, at the time of submission of return based on self assessment tax, the tax was not remitted. Subsequently, it was remitted with interest by availing installment facility. Regarding the penalty imposed, an appeal was preferred, which is pending before the appellate authority. 2. The petitioner seeks to quash the complaints and its further proceedings on the reason that there is only a failure to make payment of the tax in time as per the self assessment return and it will not fall under any of the claus....
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....able or imposable under the Act'. Therefore, evidently, what is contemplated is evasion before charging or imposing tax, penalty or interest. That may include wilful suppression in the returns before assessment and completion. But sub-section (2) deals with evading 'the payment of tax, penalty or interest under the Act'. The words 'chargeable' or 'imposable' are not there. What sub-section (2) says is 'without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable.....'. Therefore, evidently, sub-section (2) takes in cases of tax evasion after 'charging' or 'imposition'. Evasion after completion of assessment also comes within the operati....
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....ny other provision of this Act, be punishable,- (i) in a case where the amount sought to be evaded [or tax on under-reported income] exceeds [twenty-five 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 rigorous imprisonment for a term which shall not be less than three months but which may extend to [two years] and with fine. (2) If a person wilfully attempts in any manner whatsoever to evade the payment of any tax, penalty or interest under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable with r....
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....nation would show that the legislature never intended to exclude sub-section (2) from the operation of Explanation. 5. Earlier, an issue regarding difference of opinion as to the estimate and non-payment of tax came up for consideration before the Apex Court in Prem Dass v. Income Tax Officer [AIR 1999 SC 1079 = (1999) 5 SCC 241], and it was held that there should be concealment of income or furnishing of inaccurate particulars of income in order to attract Sections 276 C and 277 of the Income TAx Act . Paragraphs 8 and 9 of the said judgment are extracted below for reference: "8. wilful attempt to evade any tax, penalty or interest chargeable opposable under the Act under Section 276C is a positive act on the part of the accuse....
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.... be convicted of the offence under the said Sections." (emphasis supplied) 6. In view of the legal position settled by the Apex court in Prem Dass's case (supra), it cannot be held that the legal position laid down by this Court in G.Viswanathan's case (supra) is good law. In the instant case, admittedly there is no concealment of any source of income or taxable item, inclusion of a circumstance aimed to evade tax or furnishing of inaccurate particulars regarding any assessment or payment of tax. What is involved is only a failure on the part of the petitioner to pay the tax in time, which was later on paid after availing installment facility with interest. The penalty imposed is now pending consideration before the appellate ....
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.... to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability." (emphasis supplied) 9. A 'culpable mental state' which can be presumed under Section 278E of the Act would come into play only in a prosecution for any offence under the Act, when the said offence requires a 'culpable mental state' on the part of the accused. Section 278 E of the Act is really a Rule of Evidence regarding existence of mens rea by drawing a presumption though rebuttable. That does not mean that the presumption would stand applied even in a case wherein the basic requirements constituting the offence are not disclosed. The presumption can be applied only when the basic ingredient which w....