2017 (4) TMI 973 - HC - Income Tax

Penalty us 271(1))(c) - Commission of offence under Sections 276 (CC) read with Section 278 (B) - Held that - As the accused persons have not willfully delayed the filing of the return and the deposit of tax and also as the accused were not given any notice before giving sanction, this Court finds that prosecution has failed to prove the guilt of the accused persons beyond the shadow of reasonable doubt. It has been held in K. Prakashan vs. P.K. Surenderan (2007 (10) TMI 551 - SUPREME COURT) that when two views are possible, appellate Court should not reverse the judgment of acquittal merely because the other view was possible. When judgment of trial Court was neither perverse, nor suffered from any legal infirmity or non consideration/misappreciation of evidence on record, reversal thereof by High Court was not justified. The Hon ble Supreme Court in T. Subramanian vs. State of Tamil Nadu (2006 (1) TMI 550 - SUPREME COURT) has held that where two views are reasonably possible from the very same evidence, prosecution cannot be said to have proved its case beyond reasonable doubt. In view of the above discussion, the prosecution has failed to prove the guilt of the accused conclusively and beyond the scope of reasonable doubt. The findings of the learned Court below are not required to be interfered with. Thus,the present appeal, being devoid of merits, deserves dismissal and is accordingly dismissed.

Summary

Issues:
Appeal against judgment acquitting accused under Sections 276(CC) and 278(B) of the Income Tax Act - Delay in filing return - Mens rea - Legality of acquittal - Failure to prove guilt - Notice compounding offence - Prosecution's case - High Court's interference.

Analysis:
1. Issue of Appeal Against Acquittal: The Assistant Commissioner, Income Tax appealed against the judgment acquitting the accused under Sections 276(CC) and 278(B) of the Income Tax Act. The appeal was maintained against the surviving respondents after one respondent was deleted from the array due to demise.

2. Delay in Filing Return: The complaint alleged that the accused, being partners of a firm, failed to file the income tax return for the assessment year 1984-85. The prosecution contended that the delay was intentional, while the defense argued it was due to health issues of the person in charge of filing the return.

3. Mens Rea and Prosecution's Case: The prosecution presented pre-charge evidence and witnesses to establish the guilt of the accused. The defense claimed that there was no mens rea on the part of the accused and that the prosecution failed to prove their guilt conclusively.

4. Legality of Acquittal: The appellant argued that the lower court erred in acquitting the accused based on surmises and conjectures. Conversely, the defense maintained that the acquittal was justified as the prosecution did not establish the guilt of the accused beyond a reasonable doubt.

5. Notice Compounding Offence: The defense highlighted the absence of any notice compounding the offense before prosecution sanction, emphasizing the necessity of such notice before initiating proceedings.

6. High Court's Interference: The High Court analyzed the evidence presented by both parties, including medical records and witness testimonies. Referring to relevant legal precedents, the court emphasized the need for mens rea in cases of willful failure to file returns and the requirement of notice before prosecution.

7. Conclusion and Dismissal: After thorough examination of the evidence and legal principles, the High Court concluded that the prosecution failed to prove the guilt of the accused beyond reasonable doubt. Citing legal precedents, the court held that interference with the lower court's findings was unwarranted. Consequently, the appeal was dismissed for lack of merits, and any pending applications were disposed of accordingly.