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TMI Blog2023 (6) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1-accused No. 1 has submitted original returns of income for the annual year 2017-2018 through online on 22.01.2018 and the said returns were verified by petitioner No. 1-accused No. 1 as he is the CEO and MD of petitioner No. 2-accused No. 2 Company. For assessment year 2017- 2018, the Company has returned an income of Rs. 182,90,11,360/- and the tax liability thereon as computed at Rs. 38,72,26,150/-. As seen from the column 10 of Part B - TTI - Computation of tax liability on total income (pages 21 and 22 of return income) the details of taxes paid are shown as under: Advance Tax - Rs. 30,00,000/- TDS - Rs. 77,15,781/- TCS - Rs. 70,044/- Self Asst Tax - Rs. 37,64,40,330/- Total - Rs. 38,72,26,155/- ii) The details of the advance tax and self assessment tax payments are shown at Pages 23 and 24 of the return of income (column 15-A - details of payments of advance tax and self assessment tax). The assessee claimed in the return of income that total self assessment tax was paid at Rs. 37,64,40,330/- whereas the payments as per challan details available in the OLTAS database was only Rs. 10,00,00,000/-. The variation in the tax payments is on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.02.2018 to show cause as to why prosecution proceedings under Section 276CC and 277 of the Income Tax Act, 1961 should not be initiated for willful attempt to evade taxes for the assessment year 2017-18 and the matter for hearing was fixed on 27.02.2018. The accused did not comply. A final opportunity letter dated 28.02.2018 was issued by the Principal Commissioner of Income Tax (Central), Hyderabad to the accused on 28.02.2018 to show cause as to why prosecution proceedings under Section 276CC and 277 of the Income Tax Act, 1961 should not be initiated for willful attempt to evade taxes for the assessment year 2017-18 and the matter for hearing was fixed on 06.03.2018. v) Section 140A (1) of the Act, inter alia, provides that where any tax is payable on the basis of any return required to be furnished under Section 139, after taking into account the amount of tax, if any, already paid under any provision of the Act and any tax deducted or collected at source, the assessee is liable to pay such tax, together with interest if any, before furnishing the return and the return shall be accompanied by proof of payment of such tax. Sub-Section (3) of Section 140A lays down that where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Sections 276C (2), 277 read with Section 278B of the Income Tax Act against the petitioners. Even if the allegations are accepted to be true and correct in its entirety on the face of it, prima-facie no offence would be made out. b) Original return of income was filed on 22.01.2018 under Section 139 (4) of the Income Tax Act and after identifying that there was an error in filling up the columns of the return relating to the "tax payments" electronically, revised returns under Section 139 (5) of the Income Tax Act was filed on 01.02.2018 rectifying the mistakes, voluntarily as explained below: TAB - A (Shown in original return submitted on 2.01.2018) Column Particular Rs. Amount 3 Total Income 182,90,11,360/- 6 Net Tax Payable 38,72,26,150/- 7 Taxes Paid 7a Advance Tax 30,00,000/- 7b TDS 77,15,781/- 7c TCS 70,044/- 7d Self Asst Tax 37,64,40,330/- 7e Total Taxes Paid 38,72,26,155/- 8 Amount payable 0/- TAB - C (Shown in original return submitted on 1.02.2018) Column Particular Rs. Amount 3 Total Income 182,90,11,360/- 6 Net Tax Payable 38,72,26,150/- 7 Taxes Paid 7a Advance Tax 30,00,000/- 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Court of Special Judge for Economic Offences at Hyderabad on 23.03.2018 are clearly premature and as on the date without jurisdiction. g) The petitioners have filed the revised income returns voluntarily and without any notice from the Assessing Officer on this aspect. Thus, the allegation of the complainant that the assessee company has attempted to make a false claim as envisaged under explanation (iv) Section 276 C is incorrect as there is no willful attempt to evade any tax, penalty or interest chargeable or imposable under Income Tax Act. h) The sanction accorded by the respondent No. 1 vide order under Section 279 (1) of the Income Tax Act in F.No. CIT (C)/Hyd/Pros/ 2017-18 dated 14.03.2018 to prosecute the assessee company under Section 276 C (2) and 277 of the Income Tax Act, 1961 and its CEO and Managing Director of the assesee company i.e., 2nd petitioner under Sections 276 C (2) and 277 read with Section 278B of the Income Tax Act, 1961 is bad in law, as the order of the first respondent records her satisfaction about the commission of the offences but does not record granting of sanction specifically. i) The mandatory requirements and guidelines to be foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuted the return of income originally filed on 22.01.2018. The original return filed on 22.01.2018 is not in existence and no action under the provisions of Income Tax Act are permissible on the said original return and if any, such action is proposed to be taken or taken, the said action shall not be sustainable and is bad in law. It is further submitted that after filing the revised return, substantial amount was paid by the company towards tax liability and the remaining tax liability was recovered by the Income Tax Department from the vendors of the first petitioner as stated supra. 8. The petitioners have filed the revised income returns voluntarily and without any notice from the Assessing Officer on this aspect. Thus, the allegation of the complainant that the assessee company has attempted to make a false claim as envisaged under explanation (iv) Section 276 C is incorrect, as there is no willful attempt to evade any tax, penalty or interest chargeable or imposable under Income Tax Act. 9. In the case on hand, the facts are not disputed by either of the parties. The Petitioners - accused have filed original return of income was filed on 22.01.2018 and after identifying th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttracted. 14. Learned counsel for the petitioners relied upon authority in Confident Projects (India) (P) Ltd., v. Income Tax Department, Circle, 2 (1)(1), Bengaluri (2021) 124 taxman.com 36 (Karnataka), wherein High Court of Karnataka held as follows: "9.12. For an offence to be said to be committed under Section 277 of the Income Tax Act, the misstatement is required to be willful made with a malafide or dishonest intention in order to prosecute the assessee. 9.13. In view of the discussion hereinabove and the circumstances in which such statement was made, I' am of the considered view that there is no willful misstatement by the petitioners in the present proceedings. 9.14. The Income Tax Department is also directed to consider the provisioning of a facility in its software to upload Income Tax Returns with the actual amount paid and for the system to accept the said returns even though the complete amounts had not been paid. 10. Answer to Point No. 3: Whether the delayed payment of Income Tax would amount to evasion of tax or not? 10.1. This question is no longer res integra inasmuch as this Court in Vyalikaval House Building Cooperative Society's case (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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