TaxTMI 
TaxTMI 
2023 (6) TMI 717
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....r A.Y. 2014­2015, but they did not file return of income though every company is liable to file a return of income for an assessment year by the due date. 3. The accused nos. 02 and 03 being directors are responsible for paying tax. Since they have committed default the show cause notice was issued to them on 17.10.2017 to explain as to why the sanction for prosecution should not be given. On 05.12.2017, the director of the company by written submission stated that the profit of company had reduced for A.Y. 2014­2015 and the accused has financial difficulties therefore, the return was not filed. As the accused have failed to file their return within stipulated time, therefore, the present complaint. 4. After appearance of the accused evidence before charge was led. Thereafter, my learned predecessor had framed the charge (Exh. 20) against the accused, it was read over and explained to them in vernacular. They pleaded not guilty and claimed to be tried. 5. The points for determination alongwith my findings thereon are as under : Sr.No. POINTS. FINDINGS. 1. Does the complainant prove that, accused no. 1 willfully failed to furnish returns of income for....
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....TR 157 (Mad.), 8) CIT V/s Khader Khan and son, 25 Taxmann, 413(SC). 9. Heard the learned counsels for both the parties at length. The learned Spl. A.P.P. argued that the complainant has examined two witnesses. Sudhanshu Mohapatra (C.W. 1) is the complainant and R.S.V.S. Pavan Kumar (C.W. 2) is the sanctioning authority. Survey report (Exh. 34) gives the information received from the sister concerned company of the accused. Though the accused were having taxable income they have not filed ITR. The evidence of Kiran Jain (D.W. 1) is identical to other case (C.C. 275/SW/2018). No question is asked to the complainants witnesses in cross-examination on sanction order. Even suggestions are not given. 10. The audit report (Exh. 34) is the crux of the case which is a document of the accused and not denied by them wherein the amount is given. In the balance sheet the profit of Rs. 10,00,00,000/­ and turnover of Rs. 1,19,00,00,000/­ is mentioned. Accused have certain sources to file the return, even though they did not file the same. Defence witness has admitted that the audit report is found in their business premises. Copy of information (Exh. 32) is recovered by the....
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....Saloni Infracom and not on Salony Jewellers. Both companies are different entities. The accused are not habitual offender as the present case is the first instance when they are being prosecuted. It is, therefore submitted that no case is made out against the accused. AS TO POINT NO. 1: 13. Sudhanshu Mohapatra (C.W. 1) deposed that the jurisdiction of the accused company was with him for assessment purpose for A. Y. 2014­2015. The audit report (Exh. 16) of the accused company was submitted by accused to the Income Tax Department in assessment proceedings of another case. It revealed that accused had turnover of Rs. 11,93,05,98,153/­. There was profit before tax of Rs. 10,75,38,482/­ and Rs. 68,34,1265/­ was profit after tax. From profit and loss account, it is seen that the accused company had taxable profit/income and therefore it was liable to file income tax return. But the accused failed to file ITR. Therefore, notices (Exh. 17 colly.) were issued by the department. Thereafter, the sanction order (Exh. 18) was accorded by PCIT­04, Mumbai. During the cross-examination, it is admitted that survey report is not filed on the record. It is also admitted tha....
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....7) and stated that the department did not considered his objections while passing sanction order. He has also filed income tax history. However, it is deposed that he had not filed return only in the year 2014­2015 and the complainant has filed the case for the said reason. He could not file the return due to financial crunches and no document was seized from the office of M/s. Saloni Jewellers. 17. In his cross-examination, it is admitted that he and his brother are partners, in­charge and responsible for Saloni Jewellers. It is also admitted that Saloni Infracon is his company and responsible for its activities. He identified the audit report (Exh. 34). It is further admitted that in the audit report (Exh. 34) the provision of tax liability is mentioned of Rs. 3,91,91,750/­. Further, it is specifically admitted that in the relevant financial year his income was taxable but he did not file the return. Further, he admitted that the entries of statement of ledger (Exh. 33) were made as per his instructions. It is denied that he had prepared and filed afterthought documents on the record. It is denied that the Government sustained loss as he failed to deposit tax. 1....
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....d to cross-examine complainant's witnesses on the correctness of figures or real profit. Any of the witness in not confronted with the audit report (Exh. 16 or Exh. 34), balance-sheet, the copy of information (Exh. 32) etc. on this point. Therefore, the evidence of complainant remained unchallenged. Moreover, Kiran Jain (D.W. 1) in his cross-examination, has specifically admitted correctness of above said figures. As such, the accused have failed to bring the real profit theory either in cross-examination of the complainants witness or during his own evidence. Therefore, in my humble opinion, the ratio of above said authority will not helpful to the accused. Thus, it is clear that the complainant had succeeded to prove the income of accused as per audit reports and balance sheet. 21. So far as non­filing of return for A.Y. 2014­15 is concerned, in this regard, the complainant had produced notices (Exh. 17 colly.) and sanction order (Exh. 18) on the record, wherein the same contentions of non­filing of return are made. The accused have also not disputed the same. However, the defence of the accused is that it was not intentional, willful and caused due to financial lo....
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....s (Exh. 17) and sanction order (Exh. 18). Notices bears initials of R.S.V.S. Pavan Kumar (C.W. 2) and sanction order bears his full signature. He had also confirmed the same in his cross-examination. A public officer in discharge of his duties has to sign to many times in a day. Therefore, it is not possible for him/her to put complete signature everywhere. For that purpose they put initial or even stamp of signature is also used somewhere. Since R.S.V.S. Pavan Kumar (C.W. 2) has identified his signature therefore, no doubt remained on it. So far as authorities field on this point are regarding unsigned document, therefore, it will not be applicable here. Thus, it can safely concluded that the notices (Exh. 17 colly.) are issued with the signature of PCIT­4. 25. From the contents of notices (Exh. 17 colly.) and sanction order (Exh. 18), the complainant established that the accused have failed to file return for A.Y. 2014­2015. Besides, Kiran Jain (D.W. 1) in the cross-examination admitted that in the relevant financial year his income was taxable, but he had not filed the return. Now the burden shift on the accused to show that it was not wilful default but it was due to....
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....However, in this caser no such statement recorded by the income tax officer is not used by the complainant therefore these authorities are not useful to the accused. 28. In view of above said discussion, I come to the conclusion that accused have failed to file return of A.Y. 2014­2015 in time. Accused nos. 02 and 03 are directors of accused no. 1 company. They have not denied their directorship. Therefore, they are responsible for the defaults made by accused no. 1. Hence, it can safely concluded that the complainant has proved the guilt of accused under section 276­CC read with Sec. 278­E of the Act beyond reasonable doubt. In the result, I answer point No. 01 in the affirmative. AS TO POINT NO. 2: 29. As the complainant has succeeded to prove the guilt of the accused. Therefore, it is necessary to hear the accused on the point of sentence. Heard the accused, their advocate and Spl.P.P. on the point of sentence. The learned advocate for accused submitted that the accused have regularly filed income tax return except alleged financial year due to financial crunches. Therefore, prayed to take leniency. On the other hand, the learned Spl.P.P. submitted that accu....