Delhi District Court
Income Tax Office vs Pawan on 8 April, 2025
1 of 13
IN THE COURT OF MAYANK MITTAL
ADDL. CHIEF JUDICIAL MAGISTRATE (Spl. Acts)
CENTRAL, TIS HAZARI COURTS, DELHI
INCOME TAX OFFICE vs. PAWAN
CC No. : 8022/2018
CNR No. : DLCT02-011783-2018
Date of Institution : 06.04.2018
Name of the complainant : Income Tax Office
its registered office through
Ms. Manju Ahuja, ITO
Ward-37(4)
New Delhi.
Name of accused : Pawan S/o Sh. Satbir Singh
his parentage and residence R/o House No.75,
Vill. Chandpur,
Delhi-110081
Offence complained of : U/s. 276CC r/w Section 278E of The
Income Tax Act for the A. Y. 2014-15
Date of Judgment : 08.04.2025
Plea of accused : Pleaded not guilty.
Final Judgment : Acquitted
Brief facts and reasons for decision of the case:-
1 That the case of the complainant is that during the F.Y. 2013-14,
accused sold immovable property for about Rs. 2 Cr. 26 lacs and
deposited Rs.11.75 lacs in his savings bank accounts as per ITBA-
AIMS/Traces and he did not file the return of income as required
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u/s 139 (1) of the Act. A notice under Section 274 r/w/s 271F of I T
Act was issued on 12.02.2018, however, the accused failed to
respond and thus a penalty of Rs.5,000/- was slapped. Thereafter an
order u/s 271F dated 20.02.2018 was passed against the accused.
That the accused was further issued show cause notice u/s 279(1)
dated 21.02.2018 u/s 276 CC of the I.T. Act for default in filing the
income tax return for the A.Y. 2014-15 giving him an opportunity
for compounding, but the same remained uncomplied. It is alleged
that the tax payable by the accused on its total income is likely to
exceed Rs.3,000/- as stipulated in proviso (ii) (b) of Section 276 CC
of Income Tax Act (hereinafter referred to as ‘Act’) in view of the
transaction of immovable property and cash deposits which
remained unexplained.
2 The recording of pre-summoning evidence was dispensed with, in
terms of proviso (a) of section 200 of The Code of Criminal
Procedure, 1973 (hereinafter called ‘Cr.P.C‘) as the AR of
complainant was a government servant who filed the complaint in
discharge of his official duties. Vide summoning order dated
06.04.2018, the accused was summoned. Upon appearance, copy of
complaint and supporting documents were supplied to the accused.
After recording of pre-charge evidence, charge was framed against
accused on 24.08.2024, to which he pleaded not guilty and claimed
trial.
3 The complainant examined one witness to substantiate the
allegations levelled against the accused. Ms. Manju Ahuja was
examined as CW1 who have testified as follows:-
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3.1 That by virtue of order u/s 279(1) of the Income Tax Act,
Sanction order dated 14.03.2018 passed by Sh. Sangam Narayan
Srivastava, the then Principal CIT-13, which is Ex. CW-1/1 and
she can identify his signature as she had seen him while signing
and writing, during the course of her duty. That the sanction was
granted to her to file present complaint against the accused
Pawan for committing the offence for not filing the return of
income punishable u/s 276CC r/w section 278 E of the Income
Tax Act. That the case of accused Pawan was identified for
prosecution as the same was reflected on Income Tax Business
Application portal (ITBA). She filed the complaint Ex. CW-1/2
and further signed list of witnesses Ex. CW-1/3. That the
certified true copy of show cause notice dated 12.02.2018 u/s
271F of the IT Act was sent to the accused and certified true
copy order of dated 20.02.2018 u/s 271 F, marked as Mark A
(colly). That the said certified true copy is a part of judicial
record/complaint. That a certified true copy of show cause notice
dated 21.02.2018 duly signed by Sh. Sangam Narayan
Srivasatva, Principal CIT Delhi-13 was sent to the accused. That
the certified true copy is marked as Mark B(colly). That the said
certified true copy is a part of judicial record/complaint.
3.1.1 During her cross-examination, witness has deposed that
there is no such document on record to show that accused had
sold the property for Rs. 2.26 crores. The witness volunteered
that the information was retrieved from ITBA portal i.e.
Income Tax Business Application Portal. That no document
has been placed on record to show that the said information
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was retrieved from ITBA Portal. Witness had admitted it to
be correct that in all the communication with the accused the
name of the father of the accused is not mentioned. Witness
denied the suggestion that no show cause notice was issued to
the accused. She further states that she is not aware whether
the department has initiated any action for recovery of
penalty imposed upon accused. She further states that that
there is no tax liability on the sale of agricultural land. She
denied that no show cause notice was ever issued to the
accused. She denied that there is no sanction to prosecute the
accused or that Ex.CW1/1 is forged and fabricated document.
She states that she had worked with Mr. Sangam Narayan
Srivatava for three years w.e.f 2016 to 2019. She denied that
she had not worked with the Mr. Sangam Narayan Srivastava
or that wrongfully identified his signatures.
4 During arguments it is submitted by learned SPP that complainant
has examined one witness to prove its case of non filing of return
of income under Section 139 of the Income Tax Act, 1961, despite
selling the immovable property for about Rs. 2,26,00,000/– and
deposition of Rs. 11.75 Lacs in his savings account and despite
issuance of number of notices under Section 142 of the Income Tax
Act. It is submitted that CW-1 Ms. Manju Ahuja proved sanction
dated 14.03.2018 to file the present complaint as Ex. CW-1/1, a
certified true copy of Show Cause Notice dated 12.12.2018 under
Section 271F of I.T Act and order under Section 271F dated
20.02.2018 marked as Mark-A (Colly) and certified true copy of
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Show Cause Notice dated 21.02.2018 as Mark-B (Colly). It is
submitted that the witness has replied consistently to the questions
put to them in cross examination. It is submitted that there is
nothing in the cross examination of these witnesses, from which any
doubt is created in the case of complainant. Learned SPP has relied
upon judgment of Hon’ble Apex Court in Sasi Enterprises vs.
Assistant Commissioner of Income Tax (2014) 5 SCC 139 to assert
the point that Section 276 CC of the IT Act is attracted once there is
failure to file the return and once such failure is discovered and
detected, the subsequent act of filing the return, will not protect the
defaulters from prosecution proceedings. It is submitted that as per
Section 278E of the Income Tax Act, the mere act of non filing of
income tax return is sufficient to be proved and wilfulness on the
part of the accused is presumed under Section 278E of the Income
Tax Act. Ld. SPP has vehemently submitted that though
presumption of innocence can be rebutted however, burden on the
accused is very heavy. Ld. Prosecutor has relied upon judgment of
Hon’ble Apex Court in case of Prakash Nath Khanna Vs. CIT
(2004) 266 ITR 1 SC. It is further submitted by ld. SPP that
complainant could not prove in original the Show Cause Notices
marked as Mark-A & Mark-B during complainant’s evidence,
however, there is no necessity of bringing the original for proving
the same. Ld. SPP has relied upon Section 279B of the Income Tax
Act and Section 79 of Indian Evidence Act to assert that a document
in the custody of Income Tax authority can be proved either by
production of record (in original) or by production of copy of the
same certified by Income Tax authority having custody of records
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or other documents under his signature and stating that it is a true
copy of the original entries and that such original entries are
contained in the records or other documents in its custody. Ld. SPP
has submitted that in addition to provisions of Section 279B of I.T
Act, Section 79 of Indian Evidence Act creates presumption in
favour of complainant on production of certified copies and it is for
the accused to rebut the presumption created by the production of
certified copies/certificate. A request has been made to convict and
punish the accused accordingly.
5 Learned counsel for accused has vehemently opposed the complaint
and the submissions advanced on behalf of complainant. It is
submitted that complainant has wasted a substantial time of the
court, however, the documents in original could not be brought by
the complainant and as a result of which, the complainant has failed
to prove its case against the accused. It is submitted that no record
has been furnished to show that accused was regularly paying the
return of income and was liable to file the return of income for A.Y
2014-15 as well. It is submitted that the complainant could not
prove any of the alleged notices (which has been denied and
objected by accused), issued by the complainant to the accused for
filing of return of income for A.Y 2014-15. It is further submitted
that the complainant has not been able to prove any default on
behalf of accused in its act of not filing return of income for A.Y
2014-15. It is submitted that the complainant could not prove mens
rea on the part of the accused in non-filing of return of income as it
could not prove the notices Mark-A & B. It is further submitted that
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there does not arise any occasion for operation of any presumption
under Section 278E I.T Act as the notice as stated above has not
been proved. It is further submitted that presumption under Section
278B I.T. Act also does not operate as same operates when the
officer giving certificate had seen the original, however, in case in
hand it is a fact on record that department was not in possession of
the original document/notices Mark-A & B as same was allegedly
found missing. A request has been made to acquit the accused.
6 I have already heard the arguments perused the record including the
written submissions and case law filed by parties. Before
proceeding ahead, it is beneficial to refer to the relevant provisions
of Income Tax Act and the cases decided by Hon’ble Superior
Courts with regard to question and issues which this court has to
decide.
139.Return of income.
(1) Every person,–
(a) being a [company or a firm]; or
(b) being a person [other than a company or a firm], if his 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 and setting forth
such other particulars as may be prescribed
Provided that a person referred to in clause (b), who is not required to
furnish a return under this sub-section and residing in such area as
may be specified by the Board in this behalf by notification in the
Official Gazette, and who[during the previous year incurs an
expenditure of fifty thousand rupees or more towards consumption of
electricity or] at any time during the previous year fulfils any one of
the following conditions, namely :–
(i) is in occupation of an immovable property exceeding a specified
floor area, whether by way of ownership, tenancy or otherwise, as may
be specified by the Board in this behalf; orCC No. 8022/2018 ITO Vs. Pawan
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(ii)is the owner or the lessee of a motor vehicle other than a two-
wheeled motor vehicle, whether having any detachable side car having
extra wheel attached to such two-wheeled motor vehicle or not; or
(iii)[***]
(iv) has incurred expenditure for himself or any other person on travel
to any foreign country;or
(v)n is the holder of a credit card, not being an “add-on” card, issued
by any bank or institution; or
(vi)is a member of a club where entrance fee charged is twenty-five
thousand rupees or more,
shall furnish a return, of his income[during any previous year ending
before the 1st day of April, 2005], on or before the due date in the
prescribed form and verified in the prescribed manner and setting forth
such other particulars as may be prescribed:
Provided further that the Central Government may, by notification in
the Official Gazette, specify the class or classes of persons to whom
the provisions of the first proviso shall not apply:
Provided also that every company[or a firm] shall furnish on or before
the due date the return in respect of its income or loss in every
previous year :
[Provided also that a person, being a resident other than not ordinarily
resident in India within the meaning of clause (6) of section 6,who is
not required to furnish a return under this sub-section and who atany
time during the previous year,–
(a) holds, as a beneficial owner or otherwise, any asset (including any
financial interest in any entity) located outside India or has signing
authority in any account located outside India; or
(b) is a beneficiary of any asset (including any financial interest in any
entity) located outside India,
shall furnish, on or before the due date, a return in respect of his
income or loss for the previous year in such form and verified in such
manner and setting forth such other particulars as may be prescribed:
Provided also that nothing contained in the fourth proviso shall apply
to an individual, being a beneficiary of any asset (including any
financial interest in any entity) located outside India where, income, if
any, arising from such asset is includible in the income of the person
referred to in clause (a) of that proviso in accordance with the
provisions of this Act;]Provided also that every person, being an individual or a Hindu
undivided family or an association of persons or a body of individuals,
whether incorporated or not, or an artificial juridical person, if his total
income or the total income of any other person in respect of which he
is assessable under this Act during the previous year, without giving
effect to the provisions of section 10Aorsection 10Borsection 10BAor
Chapter VI-A 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, inCC No. 8022/2018 ITO Vs. Pawan
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forth such other particulars as may be prescribed.
Explanation 1.–For the purposes of this sub-section, the expression
“motor vehicle” shall have the meaning assigned to it in clause (28) of
section 2 of the Motor Vehicles Act, 1988 (59 of 1988).
Explanation 2.–In this sub-section, “due date” means,–(a)where the
assessee [other than an assessee referred to in clause (aa)] is–(i)a
company [***]; or (ii) a person (other than a company) whose
accounts are required to be audited under this Act or under any other
law for the time being in force; or(iii)a working partner of a firm
whose accounts are required to be audited under this Act or under any
other law for the time being in force,the [30th day of September] of
the assessment year;1Substituted with effect from April 1. 2016
“276CC. Failure to furnish return of income.- If a person wilfully fails
to furnish in due [the return of fringe benefits which he is required to
furnish under sub-section (1) of Section 115WD or by notice given
under Sub-section (2) of the said section or section 115WH or] time
the return of income which he is required to furnish under sub-section
(1) of section-139 or by notice given 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 [twenty-five 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 of a term which shall not be
less than three months but which may extend to [two 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 assessment
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 three thousand rupees.]”
[“278E. Presumption as to culpable mental state.-(1) In any
prosecution for any offence under this Act which requires a culpable
mental state on the part of the accused, the court shall presume the
existence of such mental state but it shall be a defence for the accused
to prove the fact that he had no such mental state with respect to the
act charged as an offence in that prosecution.
(2) For the purposes of this section, a fact is said to be proved only
when the court believes it to exist beyond reasonable doubt and not
CC No. 8022/2018 ITO Vs. Pawan
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merely when its existence is establish by a preponderance of
probability.”]
7 From the consideration of arguments and from perusal of record, it
can be noted that case of complainant is based on the fact that
accused has not furnished income tax return despite selling of
immovable property for a sum of Rs. 2.26 Crores and deposition of
Rs. 11.75 Lacs in his bank account. However, it is noted that the
complainant has not proved either the details or fact of selling the
immovable property by the accused or the details of bank account
of the accused showing the alleged deposit by the accused in his
bank account. It has never been case of the complainant that the
accused was having income in the previous year and later years for
which he has already filed return, however, has not filed return of
income for the relevant financial year in question. Even if it is
presumed that accused was liable to furnish income tax return under
Section 139 of the Income Tax Act, it is worth noting that
complainant has not proved the assessment order during the
examination of its witnesses, as a result of which, it could not be
establish as to what was the outstanding against the accused. As a
result of the same, evidence were not sufficient in the case so as to
show that case does not fall out of the scope of proviso to Section
276CC of the Income Tax Act, which requires that there should be
outstanding tax demand of more than Rs.3,000/- against the accused
for conviction under Section 276CC of the Income Tax Act.
8 Further the complainant was required to prove willingness on the
part of accused as one of the essential ingredient of offence under
CC No. 8022/2018 ITO Vs. Pawan
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Section 276CC of the Income Tax Act. The Ld. SPP has relied upon
Section 278E of the IT Act which raises a presumption of culpable
mental state against the accused. In this regard, it is important to
refer to the judgment of Hon’ble Apex Court in Prem Dass vs. ITO
(1999) 236 ITR 683 wherein it has been observed :
“Willful attempt to evade any tax, penalty or interest chargeable or
imposable under the Act under Section 276C is a positive act on the
part of the accused which is required to be proved to bring home the
charge against the accused. Similarly a statement made by a person in
any verification under the Act can be an offence under Section 277 if
the person making the same either knew or believe the same to be
false or does not believe to be true. Necessary mensrea, therefore, is
required to be established by the prosecution to attract the provisions
of Section 277. We see nothing in Section 132(4)(A) which would
establish the ingredients of aforesaid two criminal offence
contemplated under Sections 276C and 277 of the Indian Income Tax
Act. It may be noticed at this point of time that the Tribunal while
interfering with the penalty imposed under section 271(1)© of the Act
came to a positive finding that there is no act of concealment on the
part of the assessee and he had returned the income on estimate basis.
The Tribunal, further found that it is a case purely on difference of
opinion as to the estimates and not a case of concealment of income or
even furnishing of inaccurate particulars of income.”
It is further noted that Hon’ble Madhya Pradesh High Court in
Union of India vs. Bhavecha Machinary (2010) 320 ITR 263 has
relied upon the judgment of Hon’ble Apex Court in Prem Dass
(supra) and has observed :
6. In the matter of Prem Dass v. ITO [1999] 236 ITR 683 (SC); [1999]
1 Crimes 69, the hon’ble Supreme Court has held that is also well
settled that the court of appeal must examine the reasons on which an
order of acquittal is based and must reach the conclusion that the view
taken by the acquitting judge was clearly unreasonable. It has also
been held by this court that if the Cevaluation of the evidence made by
the courts below while recording an order of acquittal does not suffer
from any illegality or manifest error and the grounds on which the
said order of acquittal is based are not reasonable, then the High Court
should not disturb the said order of acquittal. In the matter of Narayan
vs. UOI [1994] 208 ITR 82 (MP) ; [1994] JLJ 350, this court has held
that both the courts have lost sight of the quintessence of the offence
under section 276CC. It lies in the wilfulness of delay in filing return.
In other words, it is not merely failure to file the return in time, which
constitutes the offence. The failure to file the return in time must be
proved by clear, cogent and reliable evidence to be “wilful” and three
CC No. 8022/2018 ITO Vs. Pawan
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should be no plausible doubt of its being “wilful”. It must be
intentional, deliberate, calculated and conscious with full knowledge
of the legal consequences flowing from them.”
Hon’ble High Court of Rajasthan also in case of ITO vs. Rajender
Prasad Vaish has relied upon the judgment of Hon’ble Apex Court
in Prem Dass (Supra) and adopted the meaning of ‘wilful’ discussed
by Hon’ble Apex Court in Prem Dass (supra) in the case before it
u/s 276 CC of the IT Act as well. In the case at hand, none of the
witnesses examined on behalf of complainant has either narrated
any fact from which it could be inferred that non furnishing of
return of income by accused was wilful. In fact witness had not
stated even a single word during their examination in chief to the
effect that the non furnishing of income, tax return by accused was
wilful nor it has been mentioned in the complaint that the act of
non-furnishing of return of income by the accused was wilful. In
fact the sanction order is also silent about the circumstances, from
which the competent authority has reached to the conclusion that
non filing of return was wilful on the part of accused.
9 From the above discussion and consideration of abovesaid
judgments of Hon’ble Apex Court, High Court of Madya Pradesh
and High Court of Rajasthan, the court is of opinion that
complainant could not prove its case against the accused for non
filing of return of income under Section 276CC of the Income Tax
Act, 1961 as assessment order showing the outstanding of Rs.3000/-
against the accused as well as willfullness on the part of accused in
non furnishing of return could not be proved.
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10 In view of above discussion, accused is acquitted for offence under
Section 276CC of the Income Tax Act, subject to furnishing bail
bonds under Section 437-A Cr.P.C.
Digitally signed
by MAYANK
MITTAL
MAYANK Date:
Announced in Open Court MITTAL 2025.04.08
16:38:19
on 08th April 2025 +0530
MAYANK MITTAL
ACJM(Special Acts), CENTRAL
TIS HAZARI COURTS DELHI
This judgment consists of 13 pages
and each and every page of this
judgment is signed by me.
CC No. 8022/2018 ITO Vs. Pawan
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