2022 (6) TMI 906 - HC - Income Tax

Offence punishable u/s 276CC, 276C(1) and 277 of Income Tax Act - proof of concealment of income by the petitioner - HELD THAT - As the concealment of income by the petitioner came to light only after a survey operation under Section 133(A) on 20.10.2004, 14.12.2004 and 15.12.2004. After finding concealment of income, a statutory notice under Section 148 was given. Then the petitioner filed his return of income. The tax payable was determined. It is not in dispute that in all the cases, the return of income was filed in consequence of survey operation under section 133(A) of the Act and in response to notice u/s 148 with the delay of several months, as indicated earlier. It is the claim of the learned counsel for the petitioner that there is no specific allegation of suppression of income in the complaint - reading of the complaint shows that there is a specific allegation that the petitioner concealed the income, but for the survey operation, would not have filed the return of income and paid the taxes. By concealing the income, petitioner deprived the exchequer, payment of tax for several months. Thus, this Court is of the view that there are enough and specific allegations made with regard to concealment of income by the petitioner. As the amount of income suppressed is substantial. The concealment/suppression of income came to light only after the survey. If the survey was not conducted, the concealment of income would not have come to light at all. Only after the statutory notice under section 148 was issued, petitioner filed return of income and then, it was assessed. The wilful and deliberate concealment of true and correct income by not filing the return of income within the time stipulated is clearly and plainly evident from the facts of this case. From the case laws pressed into service, it was found that there was no wilful intention to conceal the income and there was no wilful delay in filing the return. However, facts of this case are totally different and therefore, this Court is of the view that the judgments relied by the learned counsel for the petitioner are not applicable to the facts and circumstances of this case. The complaint allegations, if taken as it is, clearly make out a case for prosecuting the petitioner for the offences mentioned in the complaint. This Court is of the considered view that this case must go to trial and the trial Court has to take informed decision by recording the evidence of the parties. In this view of the matter, this Court finds no merit in all these petitions and all these six Criminal Original Petitions are dismissed.

Summary

Issues Involved:
1. Offences under Sections 276C(1), 276CC, and 277 of the Income Tax Act, 1961.
2. Habitual delay in filing Income Tax Returns and concealment of income.
3. Specific allegations of suppression of income.
4. Validity of criminal proceedings initiated after a significant delay.
5. Applicability of case laws cited by the petitioner.

Issue-wise Detailed Analysis:

1. Offences under Sections 276C(1), 276CC, and 277 of the Income Tax Act, 1961:
The complaints were filed for offences under Sections 276C(1), 276CC, and 277 of the Income Tax Act, 1961. The petitioner was accused of wilfully and deliberately not filing returns, concealing income, and making false statements in verification.

2. Habitual delay in filing Income Tax Returns and concealment of income:
For multiple assessment years (1999-2000 to 2004-2005), the petitioner consistently failed to file returns on time. The returns were filed only after survey operations under Section 133(A) and statutory notices under Section 148 of the Income Tax Act. The delays ranged from 23 to 68 months. The petitioner admitted to undisclosed incomes ranging from Rs. 33,04,420 to Rs. 1,37,26,963 for different years, and penalties were imposed and confirmed by the Income Tax Appellate Tribunal.

3. Specific allegations of suppression of income:
The court found that the complaints contained specific allegations that the petitioner concealed income and would not have filed returns if not for the survey operations. The petitioner deprived the exchequer of tax payments for several months. It was repeatedly alleged that the petitioner wilfully and deliberately delayed filing returns, concealed true income, and signed false verifications.

4. Validity of criminal proceedings initiated after a significant delay:
The petitioner argued that the criminal proceedings were initiated 8 years after the assessment orders, constituting an abuse of process. However, the court noted that economic offences have no limitation period. The concealment of income came to light only after the survey operations, justifying the proceedings.

5. Applicability of case laws cited by the petitioner:
The petitioner cited several judgments to argue against the prosecution. However, the court distinguished these cases based on facts:
- In (2021) 124 Taxmaan.com 119 (Madras), the return was delayed but not filed after a survey.
- In (2020) 120 Taxmaan.com 91 (Madras), the delay was due to the seizure of books by the respondent.
- In (2021) 126 Taxmaan.com 131 (Karnataka), the judgment focused on the intention to evade tax.
- Other judgments involved insignificant amounts or no wilful intention to conceal income.

The court found that the facts of the present case, involving substantial amounts and clear evidence of wilful concealment, were different from those in the cited judgments.

Conclusion:
The court concluded that the complaints contained sufficient allegations to prosecute the petitioner for the offences under Sections 276C(1), 276CC, and 277 of the Income Tax Act. The petitions were dismissed, and the cases were directed to go to trial for an informed decision based on the evidence.