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TMI Blog2024 (9) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... ed which is already quoted hereinabove and other judgments are also considered in the said judgment and thereafter the proceeding was quashed. Admittedly, in the case in hand, there was no penalty provision against the petitioner and in view of that it will be presumed that there is no concealment and quashing of prosecution u/s 276(C) (1) is automatic. As such, the petitioner cannot be allowed to suffer and to face criminal trial and the same cannot sustain in the eyes of law. There is no doubt that penalty proceeding and prosecution can go simultaneously in the facts and circumstances of the cases, however, in the case in hand, the penalty proceeding is not there and in view of the above judgments in the case of Pralay Pal [ 2023 (9) TMI 115 - JHARKHAND HIGH COURT ] the case of the petitioner is fit to be allowed under Article 226 of the Constitution of India. Accordingly, the entire criminal proceeding including the cognizance order dated 02.11.2017, by which, cognizance has been taken for the offence u/s 276(C) (2) and 277 against the petitioner, in connection with Complaint Case pending in the court of learned Special Judge, Economic Offences, Jamshedpur, are hereby, quashed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of interest under Section 234-A, 234-B and 234-C of the Income Tax Act, 1961.He further submits that so far as liability is concerned, that is not in dispute, however, the returns were filed without payment of tax, although he has stated that the tax has already been paid, in view of that, letter was received on 09.11.2016, by the Petitioner by the Assessing Officer, wherein a demand for Rs. 111730/- under section 140A (1) of the Income Tax Act, 1961 was made and which was duly deposited by the Petitioner on 15.11.2016 to the Income Tax Department. He further submits that on the very same day i.e. on 15.11.2016, the petitioner was served with a show cause notice, as to why a proceeding under Section 276(2) of the Income Tax Act should not be initiated against him, for non-payment of admitted tax. He submits that the petitioner has filed the reply to the show cause on 27.12.2016. 5. According to him, the petitioner was further directed to show cause as to why sanction for prosecution under Section 279 (1) of the Income Tax Act be not issued and pursuant there the petitioner has further replied to the said show cause on 22.02.2017. He submits that without taking into consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for willful default in complying with the provisions of the Income Tax Act is to prevent evasion of tax. 9. The willful failure on the part of the defaulter and the nature of penalty was again the subject matter before the Hon'ble Supreme Court in the case of Gujrat Travancore Agency v. Commissioner of IncomeTax, Kerala; [(1989) 177 ITR 455]. Relevant paragraphs of the said judgment read as under:- Learned counsel for the assessee has addressed an exhaustive argument before us on the question whether a penalty imposed under s. 271(1)(a) of the Act involves the element of mens rea and in support of his submission that it does he has placed before us several cases decided by this Court and the High Courts in Order to demonstrate that the proceedings by way of penalty under s. 271(1)(a) of the Act are quasi criminal in nature and that therefore the element of mens rea is a mandatory requirement before a penalty can be imposed under s. 271(1)(a). We are relieved of the necessity of referring to all those decisions. Indeed, many of them were considered by the High Court and are referred to in the judgment under appeal. It is sufficient for us to refer to s. 271(1)(a), which provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee for the assessment years 1965-66 and 8 Cr.M.P. No. 2266 of 2017 1966-67. 10. Looking into the aforesaid judgment, it transpires that in most of the cases of criminal liability, the Hon'ble Supreme Court held that the intention of the Legislature is that the penalty should serve as a deterrent. In the case in hand, in view of the appellate order, penalty order is not there. 11. The willful failure of payment of tax was also the subject matter before the Andhra Pradesh High Court in the case of Income-Tax Officer v. Autofil others; [(1990) 184 ITR 47 (AP)]. Relevant paragraph of the said judgment reads as under:- Therefore, wilfulness contemplates some element of evil motive and want to justification. In CIT v. Patram Dass Raja Ram Beri [1981] 132 ITR 671, a Full Bench of the Punjab and Haryana High Court, considering the term wilful failure occurring in section 276CC of the Income-tax Act, held that willfulness certainly brings in the element of guilt and thus the requirement of mens rea. Our Supreme Court in Gujarat Travancore Agency v. CIT, has observed that the creation of an offence by statute proceeds on the assumption that society suffers injury by the act or omission o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lkata High Court in the case of Gopal Ji Shaw v. Income Tax Officer, Calcutta others; reported in [(1988) 173 ITR 554 (Cal)], which was considered by this court in para-7 of the judgment relied by the learned counsel appearing for the petitioner and the same was also considered in para-9 of the same judgment, which is already quoted hereinabove and other judgments are also considered in the said judgment and thereafter the proceeding was quashed. 13. Admittedly, in the case in hand, there was no penalty provision against the petitioner and in view of that it will be presumed that there is no concealment and quashing of prosecution under Section 276(C) (1) of the Income Tax Act is automatic. As such, the petitioner cannot be allowed to suffer and to face criminal trial and the same cannot sustain in the eyes of law. 14. There is no doubt that penalty proceeding and prosecution can go simultaneously in the facts and circumstances of the cases, however, in the case in hand, the penalty proceeding is not there and in view of the above judgments in the case of Pralay Pal (Supra), the case of the petitioner is fit to be allowed under Article 226 of the Constitution of India. 15. Accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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