2010 (7) TMI 197 - HC - Income Tax

Offences and prosecutions Complaints were filed against the assessee for not filing the income tax return before the statutory due date in accordance with section 139(1) of the Act and thereby rendering the assessee to prosecution under section 276CC of the Act. The assessee filed a petition seeking discharge but the petitions were dismissed. On revision petition contending that subsequently a notice was issued to the assessee under section 148 of the Act granting 30 day time to file the return, that once notice was given under section 148 of the Act, time for filing returns was extended and there was no violation of section 139 of the Act and no prosecution could have been initiated against the assessee. Held that- the notice had been issued under section 142 of the Act, the assessee did not file returns but filed them only after issuance of notice under section 148 of the Act. The contention raised by the assessee that by filing the return within the time prescribed in the notice under section 276CC of the Act for not filing the return within the statutory due date in accordance with section 139(1) of the Act and no prosecution could have been initiated against the assessee. There was no infirmity in order passed by the Magistrate dismissing the petition filed by assessee.

Summary

Issues:
- Prosecution for not filing income-tax returns within the statutory due date under section 276CC of the Income-tax Act, 1961.
- Impact of issuing a notice under section 148 of the Act on prosecution under section 276CC.
- Requirement of wilful default for prosecution under section 276CC.
- Application of statutory presumption under section 278E regarding culpable mental state.

Analysis:
1. The petitioner faced prosecution for not filing income-tax returns within the statutory due date as per section 139(1) of the Income-tax Act, 1961, under section 276CC of the Act. The complaints were filed for delays ranging from 28 to 41 months in filing the returns after the due dates specified.

2. The prosecution presented three witnesses, and the petitioner sought discharge under section 245 of the Criminal Procedure Code, which was denied by the Magistrate. The petitioner argued that receiving a notice under section 148 of the Act extended the time for filing returns, thus negating the violation of section 139 and preventing prosecution.

3. The prosecution contended that section 276CC applies to defaults under sections 139(1), 142(1), or even after issuing notice under section 148. The prosecution emphasized that filing returns post-notice under section 148 does not absolve the petitioner from the offence under section 276CC.

4. The court examined the submissions and records, acknowledging the undisputed delay in filing returns. The key issue was whether issuing a notice under section 148 and subsequent filing of returns within the prescribed time exonerated the petitioner from prosecution under section 276CC.

5. The court differentiated the cited decisions from the petitioner's arguments, clarifying that those cases were decided on different grounds. The court highlighted the specific ingredients in section 276CC for contraventions of sections 139(1), 142(1), or 148 of the Act.

6. Referring to the Supreme Court decision in Prakash Nath Khanna v. CIT, the court emphasized that the term 'in due time' in section 276CC refers to the time prescribed in section 139(1) and not section 139(4). Filing returns under section 139(4) after the due date specified in section 139(1) does not absolve the offence under section 276CC.

7. The court rejected the argument of lack of mens rea on the petitioner's part, citing the statutory presumption under section 278E regarding culpable mental state. The burden was on the petitioner to prove the absence of wilful default, which could be raised as a defence during trial.

8. Ultimately, the court found no infirmity in the Magistrate's order dismissing the petitioner's petitions, leading to the dismissal of the criminal revisions and connected miscellaneous petitions.