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2010 (2) TMI 107 - HC - Income TaxCriminal Liability under section 276CC Failure to furnish return of income The assessee ought to have filed his returns for the assessment year 1991-92 and 1992-93 on or before August 31, 1991, and August 31, 1992, respectively but returns were filed belatedly on August 31, 1994 and March 28, 1996 respectively, after issue of notices under section 142 and 148. held that since the assessee had not filed the returns in time, mere payment of interest/ penalty would not absolve his criminal liability. Hence the trial court committed an error in acquitting the assessee. The department had proved that the assessee was guilty of the offence under section 276CC beyond reasonable doubt. The assessee was guilty of offence under section 276CC and liable to be convicted.
Issues Involved:
1. Failure to file income tax returns within the prescribed time under Section 276CC of the Income-tax Act, 1961. Issue-wise Detailed Analysis: 1. Failure to file income tax returns within the prescribed time under Section 276CC of the Income-tax Act, 1961: The respondent-accused was charged with failing to file income tax returns for the assessment years 1991-92 and 1992-93 within the stipulated time. The statutory dates for filing returns were August 31, 1991, and August 31, 1992, respectively. The respondent filed the returns belatedly on August 31, 1994, and March 28, 1996, after being issued notices under Sections 142 and 148 of the Act. Appellant's Argument: The appellant-Income-tax Department argued that the respondent-accused failed to file the returns within the time prescribed under Section 139(1) of the Act. Even after receiving notices under Sections 142 and 148, the respondent did not comply promptly. The appellant contended that the trial court erred in concluding that the extension of time for filing returns under Section 139(2) absolved the respondent from criminal liability under Section 276CC. The appellant relied on various Supreme Court and High Court decisions to support their argument that the respondent was guilty of the offence under Section 276CC. Respondent's Argument: The respondent-accused contended that the returns were filed within the extended time as per Section 139(2) of the Act. The respondent argued that since interest was levied and recovered, the criminal prosecution amounted to double jeopardy. The respondent relied on Supreme Court decisions, including CIT v. M. Chandra Sekhar and CIT v. M. J. Devada, to argue that the imposition of interest implied an extension of time, thereby negating the penalty provisions. Court's Analysis: The court examined the statutory provisions and relevant case laws. It noted that after the amendment of Section 139 from April 1, 1971, the mere charging of interest by the Income-tax Officer did not imply an extension of time to file the return, which would exclude wilful default and consequent prosecution. The court referred to decisions like K. Jagadeesan v. ITO and CIT v. Inamullah, which supported the appellant's stance that filing returns under Section 139(4) does not absolve the obligation to file within the prescribed time under Section 139(1). The court also considered the decision in K. C. Builders v. Asst. CIT, which held that penalties under Section 271(1)(c) being quashed would automatically quash the prosecution under Section 276C. However, the court noted that the decision in Standard Chartered Bank v. Directorate of Enforcement suggested that the law laid down in K. C. Builders required reconsideration. Court's Conclusion: The court concluded that the respondent-assessee's failure to file returns within the stipulated time constituted an offence under Section 276CC of the Income-tax Act. The mere payment of interest or penalty did not absolve the respondent from criminal liability. The trial court had erred in acquitting the respondent-accused. Consequently, the court set aside the trial court's judgment and convicted the respondent-accused under Section 276CC. Sentencing: The court sentenced the respondent-accused to rigorous imprisonment for six months and a fine of Rs. 5,000 in each appeal, considering the respondent's age and health conditions. The sentences were to run concurrently. Final Orders: - The criminal appeals filed by the appellant-Income-tax Department were allowed. - The impugned judgments of acquittal passed by the trial court were set aside. - The respondent-accused was convicted for the offence under Section 276CC of the Income-tax Act. - The respondent-accused was sentenced to rigorous imprisonment for six months and a fine of Rs. 5,000 in each appeal, with the sentences running concurrently.
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