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TMI Blog2013 (6) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration is as to whether if a person wilfully fails to furnish the return in due time or even after giving notice, is that sufficient to launch prosecution, in the absence of statement, the tax payable by him does exceed Rs. 3,000. In all these cases, the facts are common but separate cases have been filed for non-furnishing of return of tax for different assessment years and, as such, to understand the facts, the following facts are relevant for proper appreciation of the case. On February 13, 2008, the search of the residential as well as business premises of the assessee-accused was conducted by the Income-tax Department under section 132 of the Act. A notice under section 153A of the Act was issued on October 29, 2008, requiring the assessee to file return of income for different years within 15 days of the service of notice. The assessee did not file the return. Thereafter, on July 6 2009, a notice under section 142(1) of the Act was issued to the assessee asking him to file the return by August 10, 2009. The assessee did not file the return but filed a time petition asking for another 45 days for filing of the return. On August 10, 2009, a show-cause notice was issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the present prosecution is an abuse of the process of the court to proceed with the matter, specially in a situation when the petitioner was granted immunity from penalty. Counsel for the petitioner in support of his argument has relied on the judgments reported in K. C. Builders v. Asst. CIT [2004] 265 ITR 562 (SC) ; [2004] 2 SCC 731, Bhubaneshwar Prasad Bhaskar v. State of Bihar [1997] 225 ITR 509 (Patna), Mahadeo Lal Agarwala v. State of Bihar [1997] 224 ITR 119 (Patna), P. S. Rajya v. State of Bihar [1996] 9 SCC 1, D. Harshendra Kumar v. Rebatilata Koley [2011] 162 Comp Cas 247 (SC) ; [2011] 3 SCC 351, Inder Mohan Goswami v. State of Uttaranchal [2007] 12 SCC 1, Radhe shyam Kejariwal v. State of West Bengal [2011] 163 Comp Cas 509 (SC) ; [2011] 3 SCC 581 and All Cargo Movers (India) (P.) Ltd. v. Dhanesh Badarmal Jain [2007] 14 SCC 776. Counsel for the Income-tax Department vehemently opposed the argument of the petitioner and has submitted that it is the undisputed fact that the petitioner wilfully did not file the return even after notice given by the income-tax authority after search of the premises. The immunity granted to the petitioner from the penalty and from other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssues, excluding the prosecution already launched under section 276CC of the Act. The Tribunal refused to grant immunity from the pending prosecution under the aforesaid sections of the Act. Let us examine the relevant provisions of the Income-tax Act for coming to just and right conclusion. Section 139 of the Act deals that every person being a company or a firm, or a person other than the company or a firm, if the total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner. Section 142 of the Act provides for enquiry before assessment which provides that for the purpose of making an assessment under this Act, the Assessing Officer may serve on any person who has made a return under section 139(1) for furnishing the return has expired, a notice requiring him on a date to be specified therein. In a case where such person has not made any return within the time a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year falling within six assessment years in the prescribed form and verified in the prescribed manner, setting forth other particulars as provided under the Act. The Assessing Officer shall assess or reassess the total income of six years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. For the purpose of this case it will be desirable to consider the provisions from sections 245A to 245-I which deal with filing of settlement application also provides, under what circumstances the application before settlement Commission can be filed. Section 245C prescribes the condition for filing the settlement application and section 245D deals with procedure for disposal of application under section 245C by the Settlement Commission. Section 245H deals with the power of the Settlement Commission in the matter of granting immunity from penalty and prosecution and section 245-I declares the order of the Settlement Commission is final and conclusive. Section 276CC of the Act provides failure to furnish the return of income and section 276CCC deals with failure to furnish the return of income in search cases. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en under clause (i) of sub-section (1) of section 142 or section 148 or section 153A, he shall be punishable,- (i) in a case where the amount of tax, which would have been evaded if the failure had not been discovered, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine ; (ii) in any other case, with imprisonment for a term which shall not be less than three months but which may extend to three years and with fine : Provided that a person shall not be proceeded against under this section for failure to furnish in due time the return of fringe benefits under sub-section (1) of section 115WD or return of income under sub-section (1) of section 139- (i) for any assessment year commencing prior to the 1st day of April, 1975 ; or (ii) for any assessment year commencing on or after the 1st day of April, 1975 ; if- (a) the return is furnished by him before the expiry of the assess-ment year ; or (b) the tax payable by him on the total income determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source, does not exceed thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ource does not exceed Rs. 3,000. Basically the proviso is applicable in a case of filing of return in regular assessment required under the Act. So the embargo of Rs. 3,000 will not be applicable to the present case, as is basically applicable in a situation when on regular assessment and reduced by advance tax, if any, paid and any tax deducted at source does not exceed Rs. 3,000. These facts are not applicable to the present case, as in this case the petitioner was not the regular assessee rather a search was conducted under section 132 of the Act but even after notice, he failed to furnish the return in due time and, as such, the present case is covered under section 276CCC of the Act which deals with a situation when the assessee fails to furnish the return in due time and in view of the aforesaid consideration, the embargo of Rs. 3,000 is not applicable to the present case rather it is applicable in a case of regular assessment. Counsel for the petitioner has basically raised the point that immunity was granted from penalty as well as of prosecution and as such, the present prosecution cannot proceed, as such, the continuance of the present case is an abuse of the process of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is related to the Departmental proceeding vis-a-vis criminal proceeding where the hon'ble Supreme Court has held that in the Departmental proceeding, charges were not found proved where the proof of guilt was based on the principle of preponderance then in that circumstance, the criminal proceeding will be abuse of process of the court as in the criminal case the charges have to be proved beyond reasonable doubt. In Radheshyam Kejriwal's case [2011] 163 Comp Cas 509 (SC), the proceeding under the Foreign Exchange Regulation Act, 1973, was vitiated and a show-cause notice was issued for contravention of the provisions of section 9(1)(f)(i) of the aforesaid Act. The Adjudicating Officer came to the conclusion that the allegations made for contravention of the aforesaid Act were not proved after considering the materials on the record and ultimately, the proceeding was dropped. There the point was raised that when the Special Director on adjudication of facts found that there was no violation of the provisions of the Act, will it not be desirable that the person be asked to face the trial before the criminal court. There the hon'ble Supreme Court held that the proof in a criminal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility of the finding of the adjudication proceeding vis-a-vis criminal proceeding, has fixed the yard-stick to judge as to whether the proceeding in the adjudication proceedings as well as the criminal proceeding is identical and the exoneration of the person concerned in the adjudication proceeding on the merits. In case it is found on the merits that there is no contravention of the provisions of the Act in the adjudication proceeding, the criminal trial of the person concerned shall be abuse of the process of the court. In the present case, before the Settlement Commission, the issue was quite different as the petitioner after receipt of the notice from the Income tax Department, after payment of tax, moved petition before the Settlement Commission with true and full disclosure and where the Commission found a disclosure of the income by the petitioner was true and correct. In the present case, the prosecution has been filed for non-submission of the return, even after notice to the petitioner after search and seizure as provided under section 132 of the Act. The issue is quite different than what was there before the Settlement Commission and, as such, whatever the finding was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal and Nursing Home v. ITO reported in [1996] 217 ITR 555 (Ker) where the court has held that even in a case of finding of the appellate authority that the assessee did not conceal its income will not be a ground to quash the criminal proceeding which was not related to filing the return within the time prescribed. The facts of the case is very much near to the present case. In another case this court in Crl. Misc. No. 21592 of 1998 has held that even the confiscation proceeding was decided in favour of the accused that will not give a ground for quashing the case under the customs case which will be dependent on the evidence brought on record during the trial. The case was related to the Customs Act vis-a-vis the Gold Control Act. Another case related to the case of Deputy CIT v. M. Sundaram reported in [2010] 322 ITR 196 (Mad) where the point was raised that charging of interest by the Income-tax Officer will not be deemed to be implied extension of time to file the return which would not in effect exclude wilful default in filing return and a consequent prosecution. The Kerala High Court has held that mere charging the interest cannot be deemed to be the implied extension of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 applic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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