2022 (11) TMI 590 - HC - Income Tax

Offence punishable u/s 276 CC - case of the prosecution that the accused have failed to submit his return under Section 139 (1) - HELD THAT - On a careful perusal of sub clause (i), makes it very clear that in order to bring the charge of criminal prosecution, a willful act on the part of accused is required to be proved. Admittedly, in the instant case on hand, there is no evasion of tax. It is not the case that no return has been filed. In fact, return has been filed and refund has also been ordered. In such a view of the matter, this Court is of the view that there is no willful failure on the part of the petitioner to file return. Therefore, offence under Section 276 CC would not be attracted. Hence complaint filed by the respondent stand quashed. This Criminal Original Petition is allowed

Summary

Issues:
Quashing of complaint under Section 276 CC of the Income Tax Act, 1961 for failure to file return within stipulated time.

Analysis:
The petitioner filed a Criminal Original Petition seeking to quash the complaint in E.O.C.C.No.256 of 2018, which alleged an offence under Section 276 CC of the Income Tax Act, 1961 for failing to submit the return for the assessment year 2014-15 within the prescribed time. The prosecution claimed that the accused failed to file the return as required under Section 139(1) of the Income Tax Act, and a notice was issued under Section 142(1) on 19/6/2015, leading to the initiation of the prosecution. The petitioner's counsel argued that the return was filed within the extended time provided under Section 139(4), and a refund was due, which was accepted and refunded under Section 143(1) of the Income Tax Act.

The petitioner contended that despite filing the return within the extended time limit, a show cause notice was received on 19/12/2017. The respondent's counsel argued that the accused should have filed the return before 31/7/2014, as per Section 139(1) of the Income Tax Act, but the return was filed on 31/3/2016, beyond the prescribed time limit. The relevant provision of Section 276 CC of the Income Tax Act, 1961 was examined, which outlines the punishment for willful failure to furnish the return of income within the specified time.

The Court observed that for criminal prosecution under Section 276 CC, a willful act on the part of the accused must be proven. In the present case, there was no tax evasion, as the return was filed, and a refund was issued. Therefore, the Court concluded that there was no willful failure on the part of the petitioner to file the return, and hence, the offence under Section 276 CC was not attracted. Consequently, the complaint filed by the respondent was quashed, and the Criminal Original Petition was allowed, leading to the closure of the connected Criminal Miscellaneous Petitions.

This detailed analysis of the judgment highlights the legal arguments presented by both parties, the interpretation of relevant provisions of the Income Tax Act, and the Court's reasoning for quashing the complaint under Section 276 CC based on the absence of willful failure to file the return within the stipulated time.