2008 (11) TMI 358 - HC - Income Tax

Offences and prosecution- The quintessence of the offence u/s 276CC of the Income Tax Act lies in the willfulness of delay in filing return. In other words it is not merely failure to file the return in time which constitutes the offence. The failure to file the return in time must be proved by clear cogent and reliable evidence to be willful and there should be no plausible doubt of its being willful. It must be intentional deliberate calculated and conscious with full evidence made by the courts below while recording an order of acquittal does not suffer from any illegality or manifest error and the grounds on which the order of acquittal is based is not unreasonable then the High Court should not disturb the order of acquittal. Held that- in the instant case the court below had found that there were sufficient reasons for the delay in furnishing return. The order of acquittal was justified.

Summary

Issues:
1. Delay in filing income tax return.
2. Wilfulness of delay in filing return.
3. Legality of acquittal order.

Delay in filing income tax return:
The case involved a private complaint under section 276CC read with section 278B of the Income-tax Act, 1961, regarding the delayed filing of income tax returns by a registered firm. The prosecution alleged that the firm had filed its return 25 months late, leading to penalty proceedings under section 271A of the Act. Despite notice and non-compliance by the respondents, the lower court acquitted them. The appellant argued that the delay was not justified due to the sickness of an employee, emphasizing that the obligation to file returns remains regardless of employee availability. Evidence was presented, including documents and witness testimonies, to support the prosecution's case.

Wilfulness of delay in filing return:
The appellant contended that the delay in filing the return was deliberate and intentional, constituting an offense under section 276CC. Citing legal precedents, including the case of Prem Dass v. ITO, it was argued that the wilfulness of the delay must be proven with clear and reliable evidence. The court emphasized that the essence of the offense lies in the intentional and conscious delay in filing the return, not merely the failure to file on time. The prosecution aimed to establish that the delay was willful and intentional, warranting conviction.

Legality of acquittal order:
The respondents argued that the lower court's decision to acquit them was based on a satisfactory explanation for the delay in filing the return. Referring to the statement of a witness regarding the health issues of an employee, the court found sufficient grounds for the delay. Citing legal principles from the case of Narayan v. UOI, the court highlighted the importance of proving the willfulness of the delay beyond reasonable doubt. Ultimately, the court upheld the acquittal, stating that no illegality was committed in the lower court's decision. The appeal was dismissed based on the court's assessment of the evidence and legal standards applied.

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