9911796707
TMI Blog1992 (2) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... elating to the assessment year 1983-84, along with three others. They were charged with offences punishable under sections 276C(1), 277 and 278 of the Income-tax Act, 1961. Pending trial, A-5 died. A-1 (the first petitioner) was found guilty under section 276C ; A-2 was found guilty under sections 277 and 276C read with section 278D and was sentenced to pay a fine of Rs. 1,000 in default to undergo rigorous imprisonment for one month. He was also sentenced to rigorous imprisonment for three months and was directed to pay a fine of Rs. 1,000 in default to undergo rigorous imprisonment for one month on the second charge. A-3, another partner of the firm, was acquitted. A-4 was found guilty under section 278 and was sentenced to undergo impris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring assistance to the firm and that the brothers, G. Ramarao and G. Mallikharjunarao, did not render any assistance at all. Sri Venkataiah, learned counsel appearing for the petitioners, firstly contended that both the courts have not properly considered the effect of exhibit P-10, which clearly shows that the second petitioner asserted that his father and brothers were assisting the firm by making purchases after verifying the stock Position at the time of booking orders and were also assisting in making sales. He further contended that the courts below ignored the income-tax returns submitted by Messrs. Ramarao and Mallikharjunarao showing their income from salaries paid by the first petitioner firm, though the said statements were acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omitted any relevant entry or statement in such books of account or other documents ; or (iv) causes any other circumstance to exist which will have the effect of enabling such person to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof." "Section 277. If a person makes a statement in any verification under this Act or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable,-. . . ." "Section 278. If a person abets or induces in any manner another person to make and deliver an account or a statement or declaration relating to any income chargeable to tax which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legation against the second petitioner was that he verified the income-tax returns which alone cannot be held to be wilful, unless positive evidence is let in to prove the state of mind of the second petitioner while filing the return. In other words, it has to be established by the prosecution that the second petitioner filed the return with an intention to evade tax. In order to bring home the guilt under section 277, it is necessary for the prosecution to prove that the accused either knows or believes to be false or does not believe to be true that the statement he makes or the verification he has made under the Act is false. Similarly, section 278 deals with abetment or inducement of a person to make and deliver an account or statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite mens rea, viz., knowledge on the part of a person of a false entry or statement in any books of account or other documents in his possession or control, must be established before he is sought to be visited with the penalty prescribed by section 276C." This court had an occasion to consider the meaning of the word wilful" while dealing with section 276CC of the Act in ITO v. Autofil [1990] 184 ITR 47. It was held that the word "wilful" generally means an act done with a bad purpose, with an evil motive as a constituent element of the crime and that it should be established beyond all reasonable doubt and there should be presence of mens rea, a bad motive and a guilty mind. Dealing with section 276C, the Supreme Court in Gujarat Travanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the offence to evade any tax or penalty, a minimum sentence has been provided for in the statute. It was further held that, for the commission of offence, mens rea is an essential ingredient and the company being a juristic personality, cannot have any mens rea to commit any offence. It is only the partners of the firm or the directors of the company who can be held to be guilty by making false statements. I am in entire agreement with the view expressed as above. From the legal position emerging out of the above decisions, it is necessary to examine the facts of this case. The contention of the petitioners is that the brothers of A-2, namely, G. Ramarao and G. Mallikharjunarao, rendered assistance to the firm for which they were pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
