AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (7) TMI 966
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.... The allegation against the petitioner and the company M/s ASM Traxim Pvt. Ltd. ("Company") was that they had not filed the Income Tax Returns (ITR) for the assessment year 2012-13 by 30th September, 2012 which was the last date to file the ITR. Furthermore, when a notice under Section 142(1) of the Income Tax Act ("IT Act‟ for short) to file the return on or before 2nd August, 2013, the returns were actually filed only on 12th August, 2013. Thus, an offence had been committed under Section 276-CC read with Section 278E. A Show Cause Notice had also been issued on 20th March, 2014, which was replied to by the Company. On 14th July, 2014, sanction was accorded under Section 276-CC read with Section 278-B of the IT Act for prosecution of the accused. On 6th August, 2014 the complaint was filed under Section 276-CC read with 278-B of the IT Act. 3. The Income Tax Department initiated prosecution against the Company and the petitioner by means of the complaint filed on 6th August, 2014 and the learned Magistrate took cognizance thereof. After recording pre charge evidence, the learned ACMM (Spl. Acts), vide the orders dated 25th May, 2017, concluded that sufficient material was ....
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....8. Furthermore, the presumption that the petitioner was the Principal Officer could not be raised, in the absence of the notice, and because he had appended his digital signatures on the returns, that were actually filed subsequent to the notice dated 26th July, 2013. It was submitted that the signatures were appended in view of the provisions under Section 140 of the IT Act which made it mandatory for the Director, even if not dealing with the day-to-day affairs of the Company, to sign the returns. It was submitted that it was fallacious to conclude on the basis of this act that the petitioner was either the Principal Officer or in-charge of the affairs of the Company at the relevant time, i.e., in the year 2012. 9. The next argument advanced by the learned counsel for the petitioner was that sanction under Section 279 of IT Act had not been accorded qua the petitioner and therefore the entire prosecution was faulty and had to be quashed. 10. Reliance has been placed on Dinesh Kumar vs. Airports Authority of India, (2012) 1 SCC 531, Consumer Action Group Vs. Cadbury India Ltd. & Anr., (2000) 9 SCC 56, CBI v. Pramila Virendra Kumar Agarwal, (2020) 17 SCC 664, Pooja Ravinder Devid....
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....a v. Bhajan Lal, 1992 Supp (1) SCC 335, Binod Kumar v. State of Bihar, (2014) 10 SCC 663, M.R. Pratap v. V.M. Muthukrishnan, ITO, (1992) 3 SCC 384, J. Tewari v. Union of India, 1995 SCC OnLine Cal 292 and Madhumilan Syntex Ltd. v. Union of India, (2007) 11 SCC 297. DISCUSSION 14. There can be no doubt that the Income Tax Department would be entitled to file a complaint for prosecution of a person under Section 276CC for willfully failing to furnish in "due time‟ the return of income. Under Section 139(4), if a return has not been furnished within time allowed to a person, such a person may furnish the return for any previous year at any time before three months prior to the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. It has been held by the Supreme Court in Prakash Nath Khanna and Anr. Vs. Comm. of Income Tax and Anr., AIR 2004 SC 4552, which has been referred to by the learned ACMM in his order, that the compliance under Section 139(4) would not bar the prosecution for the non-furnishing of the return under Section 139 (1) of the IT Act as such filing under Section 139(4) would not dilute the infraction. 15. As per....
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....e IT Act. 19. Thus, this argument of the learned counsel for the respondent that being an agent of the company the Director was included in the definition of Principal Officer has only to be rejected. 20. Coming to the sub-clause (b) of sub-Section (35) of section 2, any person connected with the management or administration of a company would no doubt include a director, but then the Assessing Officer would have to serve a notice of his intention of treating him as the Principal Officer. What is significant is the intention of the Assessing Officer, which cannot be presumed on the basis of surrounding facts. The notice of intention must be by a physical act, and the notice must be duly served on the person connected with the management, who was intended to be treated as a Principal Officer. 21. The notice dated 26th July, 2013 was not preceded by any such notice. Merely because, for the purpose of statutory compliance of this notice, as well as Section 140 of the IT Act, the petitioner appended his digital signatures to the ITRs would not suffice to meet the requirements of a notice in terms of Section 2(35) (b) of the IT Act. The act of appending the digital signatures by the ....
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....proceeded against in a court of law. If there is no sanction, no cognizance of the complaint can be taken by the Trial Court and the complaint cannot be proceeded further. 25. In the present case, the sanction which is placed on the record as Annexure P-9 may be seen. It refers to the Company M/s ASM Traxim Pvt. Ltd as the "assessee". It refers to a response to the show cause notice under Section 276 CC dated 20th March, 2014 vide a letter dated 25th March, 2014 by Mr. B.L. Gupta ITP on behalf of the "assessee company", contending that the return had been filed within time allowed under Section 139(4) and that there was no willful default. It refers to the petitioner only in para no.10 in the following words, "AND WHEREAS it is seen that the return of income was verified by Sh Vipul Agarwal director by digital signature", and nothing more. The sanction itself reads as under: "NOW THEREFORE, I, R K Gupta, the Commissioner of Income-tax (Central)-- Ill, New Delhi, in exercise of powers conferred upon me u/s 279(1) of the IT Act, do hereby sanction prosecution of the assessee u/s 275CC read with Section 278E of the Income-tax Act, 1961 "and authorize Sh Subhash Verma, DCIT, CC-22, ....