2013 (6) TMI 284 - HC - Income Tax

Prosecution /s 276CC - immunity form prosecution or not - Settlement Commission, while deciding the case has granted immunities for penalty. - held that - In this case, the complaint has been filed under section 276CC of the Act which is related to non-filing of return, even though on different occasions, notices were given to the petitioners to file necessary return but in spite thereof, the petitioners gave no response which led to filing of the present case, whereas the issue before the Settlement Commission was with regard to different aspect of the matter, as the petitioners deposited the necessary tax and, thereafter, approached the Settlement Commission, who found the disclosure made by the petitioners to be true and the applicant was agreed to be taxed on the deposits and that was the reason for holding that the applicant cannot be made suffer for this and, accordingly, granted immunity from the penalty under the Act for all years involved in the settlement application whereas the Commission has not granted any immunity for the prosecution already launched under section 276CC of the Act. It is clear that the issue involved before the Commission was quite different whereas the prosecution that has been launched is quite different, i.e., for non-filing of the return even after the notice. In this view of the matter, the judgments relied on by the petitioners are not applicable to the present case, as explained hereinabove and the judgments that have been relied on by the respondents are by and large very near to this case and, as such, the order of cognizance cannot be held to suffer from any infirmity. - Decided against the assessee.

Summary

Issues Involved:
1. Prosecution under section 276CC of the Income-tax Act, 1961.
2. Complaint petition's failure to disclose the amount of tax evasion.
3. Wilful failure to furnish the return in due time and the tax payable exceeding Rs. 3,000.

Detailed Analysis:

1. Prosecution under section 276CC of the Income-tax Act, 1961:
The primary issue raised by the petitioner is whether prosecution under section 276CC is permissible when the Settlement Commission has granted immunity from penalties. The court noted that the Settlement Commission, while granting immunity from penalties and other prosecutions, explicitly excluded the ongoing prosecution under section 276CC. This exclusion indicates that the immunity does not extend to the current prosecution, thus allowing the prosecution to proceed.

2. Complaint petition's failure to disclose the amount of tax evasion:
The petitioner argued that the complaint petition did not disclose the amount of tax evasion, which is essential for a proceeding under section 276CC. The court clarified that the prerequisite for filing a complaint under section 276CC is the wilful failure to file a return after receiving notice, not necessarily the disclosure of the evaded tax amount in the complaint petition. The court emphasized that the absence of this detail does not invalidate the prosecution.

3. Wilful failure to furnish the return in due time and the tax payable exceeding Rs. 3,000:
The petitioner contended that prosecution under section 276CC is not justified unless the tax payable exceeds Rs. 3,000. The court distinguished between regular assessment cases and search cases, noting that the Rs. 3,000 threshold applies to regular assessments, not to cases involving search operations under section 132. Since the petitioner was not a regular assessee and the case involved a search operation, the Rs. 3,000 threshold was deemed inapplicable.

Additional Points:
- The court reviewed various provisions of the Income-tax Act, including sections 139, 142, 143, 144, 147, 153A, 245A to 245I, 276CC, and 276CCC, to elucidate the legal framework governing the prosecution.
- The court analyzed judgments cited by both the petitioner and the Income-tax Department. It found that the precedents cited by the petitioner were not applicable to the present case, as they dealt with different factual scenarios or legal issues.
- The court highlighted that the Settlement Commission's findings on the petitioner's true and full disclosure of income pertained to different aspects of the case and did not impact the ongoing prosecution under section 276CC.
- The court concluded that the prosecution for non-filing of the return, despite notices, was justified and did not constitute an abuse of the court process.

Conclusion:
The court dismissed the petitions, affirming that the prosecution under section 276CC for wilful failure to file the return after receiving notice is valid and not affected by the Settlement Commission's grant of immunity for other issues. The complaint's lack of specific tax evasion details does not invalidate the prosecution, and the Rs. 3,000 threshold is irrelevant in search cases. The order of cognizance was upheld, and the prosecution was allowed to proceed.