2024 (1) TMI 1227

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....rs of petitioner No. 1. 3. The petitioner No. 1 filed its return for income for Assessment Year 2012-13 on 29.09.2012 declaring a total income of Rs. 8,20,53,544/-. As per the aforesaid return of income, the self-assessment of tax of Rs. 2,10,91,150/- was pending on 29.09.2012. From the perusal of the assessment record, it was found that the self-assessment tax under Section 140A(3) of the Income Tax Act, 1961 of Rs. 2,10,91,150/- has actually been paid as follows:- Dated Amount Head 10.07.2013 Rs. 2,10,91,150/- Self-assessment tax This self-assessment tax was alleged to be payable before the filing of the aforesaid Return of Income for the Assessment Year 2012-13 on 29.09.2012. 4. After the payment of this tax liability alongwith interest on 10.07.2013, the respondent issued a show cause notice to the petitioner on 11.02.2014 wherein it was stated that the petitioners had failed to pay self-assessment tax and therefore, prosecution under Section 276C (2) of the Income Tax Act was to be initiated. The petitioner was asked to show cause before 19.02.2014 as to why the prosecution proceedings should not be initiated. A copy of the show cause notice dated 11....

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....rest stood paid much prior to the issuance of the show cause notice. He, therefore, contends that once the tax stood paid on 10.07.2013 and the show cause notice came to be issued only on 11.02.2014, the filing of the instant complaint was nothing but an abuse of the process of the Court. In fact, prosecution under Section 276C (2) of the Income Tax Act read with the other provisions of the Act could only be launched if there was a willful evasion/attempt of either the tax, the penalty of the interest amount, apparent on the face of the record, whereas in the present case neither of the said circumstances existed. Reliance is placed on the judgments in the case of Confident Projects (India) (P.) Ltd. Versus Income Tax Department, Circle 2(1)(1), Bengaluru [2021] 279 Taxman 46 Karnataka, S.P. Velayutham Versus The Assistant Commissioner of Income Tax, Non-Corporate Circle 14(1), Chennai, Crl. O.P. No. 17906 of 2017 and M/s Health Bio Tech Ltd. & others Versus Deputy Commissioner of Income Tax Central Circle 4(1) Chandigarh, CRM-M-7918-2015, decided on 14.09.2023. 11. On the other hand, the learned counsel for the respondent- Department has very vehemently argued that the petition....

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....cuments; or (iv) causes any other circumstance to exist which will have the effect of enabling such person to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof. 14. The relevant judgments are as under:- The Karnataka High Court in Confident Projects (India) (P.) Ltd.'s case (supra), held as under:- "8. In the light of the above submissions made, the points that would arise for determination are:- (1) Whether for an offence to be said to be committed under Section 277 of the Income Tax Act, the misstatement is required to be willful to prosecute the assessee? (2) Whether there is a misstatement or willful misstatement by the petitioners in the present proceedings? (3) Whether the delayed payment of income tax would amount to evasion of tax or not? (4) Whether all the Directors of the Company can be prosecuted for any violation of the Income Tax Act by relying on the inclusive definition under Section 2(35) of the Income Tax Act? (5) Whether the order of cognizance by the Economic Offences Court is proper and correct? (6) Whether the Magistrate is required to f....

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....lanation to the above section makes it very clear that the evasion by way of any false entry or statement in the books of account or other document or omission to make any entry in the books of accounts or other documents or any other circumstances which will have the effect of enabling the assessee to evade tax or penalty or interest chargeable or imposable under this Act or the payment thereof. Though explanation is inclusive one it is not the case of the Department that assessee has made any false entry in the statements or documents or omitted to make any such entry in the books of account or other document or acted in any other manner to avoid payment of tax. It is not the case of the Department that the assessee has made an attempt to alienate the property in order to defeat the payment etc., Therefore, when the Return has been properly accepted and the assessment is also confirmed, mere default in payment of taxes in view of this Court, unless such default arising out of any of the circumstances, which will have a effect of the assessee to defeat the payment, the word employed in the section viz., "wilful attempt" cannot be imported to mere failure to pay the tax. From the i....