2003 (9) TMI 38 - HC - Income Tax

Order of acquittal - Wilful concealment has got a special meaning according to the Income-tax Act. It has to be proved by the prosecution for bringing its case within the mischief of sections 276C and 277 of the Act. In the present case, mens rea on the part of the assessee is missing. The learned trial court has discussed the entire evidence in its judgment and then extended the benefit of doubt to the respondents. I am totally in agreement with the findings recorded by the learned trial court Thus assesses have been rightly acquitted of the charge under sections 276C and 277

Summary

Issues:
1. Appeal against acquittal under sections 276C and 277 of the Income-tax Act, 1961.
2. Allegations of intentional concealment of facts in the original return for the assessment year 1980-81.
3. Filing of a revised return with enhanced income after notice under section 143(2) of the Act.
4. Arguments on mens rea, wilful concealment, and benefit of doubt.
5. Validity of the order of acquittal and applicability of cited judgments.

Analysis:

1. The appeal was filed against the acquittal of the respondents under sections 276C and 277 of the Income-tax Act, 1961. The Income-tax Officer challenged the judgment of the Chief Judicial Magistrate, alleging intentional concealment of income in the original return for the assessment year 1980-81.

2. The prosecution contended that the original return filed in August 1982 was not true as certain facts were intentionally concealed to evade tax. It was alleged that the firm and its partners concealed income by not submitting a true statement of accounts. A revised return was filed later with an enhanced income, leading to assessment and payment of tax and penalty.

3. The defense argued that there was no mens rea as the firm was not in possession of all account books when the original return was filed. The revised return was filed promptly after a notice under section 143(2) of the Act, showing enhanced income. The defense emphasized that once the revised return was filed, the original return became null and void.

4. The judge analyzed the concept of "wilful concealment" under the Income-tax Act, emphasizing the need for mens rea to prove the offense. The trial court had extended the benefit of doubt to the respondents, finding no wilful concealment. The judge agreed with this finding and highlighted the absence of illegality in the trial court's judgment.

5. The judge dismissed the appeal, stating that the order of acquittal can only be reversed if it suffers from illegality or manifest error. Citing a Supreme Court judgment, the judge emphasized that the order cannot be reversed merely because a different view can be taken. The cited judgments by the appellant were deemed inapplicable to the facts of the present case, further supporting the dismissal of the appeal.