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2021 (9) TMI 562 - HC - Income TaxProceeding of Criminal Case u/s 276CC of the Income Tax Act - Proof of willful default in filing the return - penalty imposed for late filing of return under Section 271(1)(a) - instant application under Section 482 Cr.P.C. filed for staying the further proceeding of Criminal Case under Section 276CC of the Income Tax Act, 1961, pending before the Court of learned Special Chief Judicial Magistrate, Varanasi - HELD THAT - As the applicant has filed the income tax return in time as per Section 139(4) of the Act, 1961 and the same was accepted by the opposite party in toto and the opposite party has also not imposed any penalty of late filing of income tax return as alleged by them in complaint in view of Section 271(1)(a) of the Act, 1961, therefore, prima facie it appears that the complaint filed before Magistrate concerned under Section 276CC of the Act, 1961 appears to be an abuse of process of law. The applicant has made out a case for interim relief.
Issues:
1. Stay of further proceedings in Criminal Case No. 50 of 2019 under Section 276CC of the Income Tax Act, 1961. Analysis: The applicant filed an application under Section 482 Cr.P.C. seeking a stay on the proceedings of Criminal Case No. 50 of 2019. The applicant contended that they voluntarily filed the income tax return for the assessment year 2016-17 without any notice from the Income Tax Department. It was argued that no notice under various sections of the Income Tax Act, including Section 148 or Section 153A, was served upon the applicant. The applicant also highlighted that the return was filed within the prescribed time limit and was duly processed and accepted by the Income Tax Department. The opposite party issued a show cause notice, to which the applicant replied, denying the allegations made. Despite this, proceedings were initiated under Section 276CC, alleging late filing of the return. The applicant argued that the complaint was baseless and an abuse of process of law, as the return was filed within the allowed time frame under Section 139(4) of the Act. The applicant further argued that all taxes with interest were paid without any demand notice from the Income Tax Department. It was emphasized that the complaint under Section 276CC was unwarranted, especially since no penalty for late filing of the return under Section 271(1)(a) was imposed. The applicant relied on legal provisions and court decisions to support the argument that prosecution cannot be initiated without willful default in filing the return, even in the absence of a penalty for late filing. The opposite party, however, contended that the complaint was justified as the applicant failed to submit the return on time. After hearing both parties and examining the records, the Court found that the applicant had filed the income tax return within the stipulated time under Section 139(4) of the Act. The Court noted that the return was accepted without any penalty for late filing. Consequently, the Court opined that the complaint under Section 276CC appeared to be an abuse of process of law. The Court granted interim relief to the applicant and directed the opposite party to file a counter affidavit. The matter was scheduled for further consideration, and until the next listing date, the proceedings in Criminal Case No. 50 of 2019 were stayed only concerning the present applicant.
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