Delhi District Court
Income Tax Office vs Urmila Devi on 23 January, 2025
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IN THE COURT OF MAYANK MITTAL
ADDL. CHIEF JUDICIAL MAGISTRATE (Spl. Acts)
CENTRAL, TIS HAZARI COURTS, DELHI
INCOME TAX OFFICE vs. URMILA DEVI
CC No. : 3896/2017
CNR No. : DLCT02-009338-2019
Date of Institution : 10.04.2019
Name of the complainant : Income Tax Office
its registered office through
Shri Deepak Hooda, ITO
Ward-53(4)
New Delhi.
Name of accused : Urmila Devi W/o Sh. Raj Singh
her parentage and residence R/o H. No.1734, Bhagwat Building
Sher Singh Bazar,
Kotla Mubarakpur, New Delhi-110003
Offence complained of : U/s. 276CC of The Income Tax Act, 1961
Date of Judgment : 23.01.2025
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 accused had not filed the
return of income for A.Y. 2017-18 despite making cash deposits of
substantial amount of Rs.13,29,00/- during the demonetization
period which clearly indicated that accused had taxable income and
was liable to furnish the income tax return and accused had
intentionally not filed the return of income for A.Y. 2017-18. A
notice under Section 143 of the Income Tax Act, 1961 (hereinafter
referred to as the Act) dated 09.03.2018 as well as show cause
notice under Section 276CC of The Act issued on 01.02.2019 and
18.02.2019. That proposal dated 28.01.2019 was issued and to
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afford proper opportunity to accused, a show cause notice was
issued to accused on 01.02.2019 to show cause as to why
prosecution under Section 276CC of The Income Tax should not be
launched and in response to said show cause notice, accused vide
letter dated 11.02.2019 requested for some more time for giving
suitable written reply in this regard. That accused vide reply dated
18.02.2019
received on 20.02.2019 admitted the deposit of cash in
her accounts, however, pleaded that she is a house wife and does
not have any taxable income. Meanwhile, as per request of more
time as sought by accused, another show cause notice was issued on
18.02.2019 and in response to which accused filed written
submission on 24.02.2019. That accused along with her husband
Sh. Atinder Kumar attended the proceedings on 05.03.2019 and
submitted that cash deposit in the bank account has been made out
of saving made from withdrawal from overdraft account and the
rent which was received out of house property income from the
property owned by her husband for which she was holding GPA and
it has been conceded that no return of income has been filed as there
was no taxable income of the accused. That as per reply of accused
from time to time, it was found that accused has confirmed to have
made cash deposits of Rs.13,29,000/- during demonetization period
in bank account No.30554861579 held with State Bank of India in
her name and accused also claimed to have received rent against the
property owner by her husband for which she was holding GPA, but
has not provided any documentary evidence. That accused has
further submitted that since her income for A.Y. 2017-18 never
exceeded the taxable quantum, she did not file ITR for A.Y. 2017-
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18, however the explanation furnished by the accused was not
found tenable as accused herself admitted to have received interest
income of Rs.2,31,252/- and rental income from the property owned
by her husband for which she was holding GPA. That sanctioning
authority vide sanction dated 19.03.2019 accorded sanction to
prosecute the accused for the offence punishable under Section
276CC for A.Y. 2017-18.
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
10.04.2019, the accused was summoned. Upon appearance, copy of
complaint and supporting documents were supplied to the accused.
After recording of pre-charge evidence, notice was framed against
accused on 01.05.2024 to which she pleaded not guilty and claimed
trial.
3 The complainant examined two witnesses to substantiate the
allegations levelled against the accused. Sh. Deepak Hooda as CW-
1 whereas Sh. Raju Kumar Dutta was examined as CW2 who have
testified as follows:-
3.1 CW-1: CW-1 during his examination in chief has deposed
that accused had not filed her return of income for A.Y. 2017-18
despite making cash deposits on substantial amount of
Rs.13,29,000/- during the demonetization period. That accusedCC No. 3896/2019
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income. It is further deposed that predecessor of witness Sh.
Raju Kumar Dutta had issued notice under Section 142(1) of
Income Tax Act on 09.03.2018 Ex. CW 1/1 to accused and
identified signature of Sh. Raju Kumar Dutta being his colleague
and that notice was digitally signed as well. That Sh. Raju
Kumar Dutta launched a proposal for prosecution Ex. Cw 1/2,
accordingly PCIT-18 issued show cause notice to accused Ex.
CW 1/3. That accused filed her replies Ex. CW 1/4. That another
opportunity was granted vide notice dated 18.02.2019 by PCIT-
18 Ex. CW 1/5. That accused submitted her reply on 21.02.2019
Ex. CW 1/6 and accordingly, order sheet Ex, CW 1/7 was
prepared. That after considering the material facts and
circumstances of the case, PCIT-18 vide order dated 19.03.2019
sanctioned the prosecution of the accused for offence punishable
under Section 276CC of the Income Tax Act for willful default
of not filing the return of income required to be filed under
Section 139(1) of The Income Tax Act for A.Y. 2017-18 and
authorized him to file the present complaint Ex. CW 1/8 and
witness filed the present complaint Ex. CW 1/A as accused has
failed to file her return of income within stipulated period as per
law as well as on receipt of notice under Section 142(1) of
Income Tax Act.
3.1.1 Learned defence counsel put question to witness ‘Did
you attach report under Section 195 Cr.P.C. with the
complaint filed by you before this court? However, the court
observed that question pertains to record and disallowed the
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same. CW-1 denied the suggestion that application of mind in
submitting the complaint is not judicious, though without
filing the report under Section 195 Cr.P.C or that the
sanctioning authority has not applied his mind while passing
the sanction under Section 279 of The Income Tax Act, 1961
without considering the record that report under Section 195
Cr.P.C. is not on record.
A question was put to witness that ‘before filing the present
complaint under Section 276CC of The Act did you make
assessment of the tax to be paid by the accused and intimated
to her. What do you have to say? to which witness replied
that ‘Assessment has been done after filing of the present
case’. Again a question was put that ‘Whether present matter
is compoundable according to Vivad se Vishwas Scheme?
However, court observed that question pertains to matter of
procedure of department and does not pertain to merit of the
case and disallowed the same. CW-1 stated that he could not
comment whether the matter could have been settled by way
of Vivad se Vishwas Scheme and for that reason the accused
was called by the department after filing of present case.
Witness has been shown photocopy of summon / notice
allegedly received by accused whereby accused was called to
the department for settlement and after going through the
same witness has admitted that this summon / notice dated
02.03.2020 Ex. CW 1/D1 was sent by him to the accused. He
voluntarily stated that those notices / summons were sent to
the assessees in bulk and later on department has decided
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which matter is to be considered for compounding and which
is not to be considered. Witness deposed that he was not
aware whether or not department has informed the accused
that department may or may not proceed with the settlement
on appearance of accused before the department. He
voluntarily stated that he had not communicated the same to
the accused. Witness denied the suggestion that accused has
settled the matter with the department in pursuance of notice
Ex. CW 1/D1 issued by the department. Witness stated that
he was promoted as ITO in November 2017. Witness denied
the suggestion that he had not properly verified the bank
accounts of the accused that it was single or joint or that he
had deliberately issued notice under Section 142(1) of The
Income Tax Act, 1961 even after filing the present complaint
and voluntarily stated that proceedings in the Income Tax
Department are separate like prosecution proceeding or the
assessment proceeding. Further a question was put to witness
that ‘Have you find any tax evasion before filing the present
complaint and if so, what were the grounds for evasion of
tax? To which he replied that ‘Before filing of the present
complaint my Predecessor Sh. Raju Kumar Dutta issued
notice under Section 142(1) of The IT Act to accused for
filing of ITR for which accused responded. Considering the
reply Ld. PCIT-18 find this case fit for prosecution for non
filing of ITR, therefore, the present complaint is filed.’ CW-1
denied the suggestion that before filing the present complaint
he had not applied his mind or that had had failed to find the
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‘willful’ default by the accused for filing the ITR or that he
had filed the present complaint in a mechanical manner or
that he deposed falsely
3.2 CW-2 Sh. Raju Kumar Dutta deposed that he was posted as
ITO, Ward 53(4), Delhi from June 2017 to February 2019 and he
had jurisdiction of the assessee (accused). That it is evident from
the facts of the case that the accused had not filed her return of
income for the A.Y. 2017-18 even after issuance of notice by
witness under Section 142(1) of The Income Tax Act, 1961 on
09.03.2018 Ex. CW 1/1 (OSR). That on the basis of facts witness
had a proposal forwarded by Additional Commissioner of
Income Tax on 28.01.2019 to the learned PCIT for granting the
sanction for launching the prosecution against the accused Ex.
CW 1/2 (OSR).
3.2.1 During his cross examination witness stated that before
sending the proposal for launching the prosecution, he had
not assessed the income of accused and her liability to pay
the tax. That accused had not filed her return of income,
therefore, no question arises to ask the accused to deposit the
requisite tax. A question was put to witness that ‘Did you
send a proposal for initiation of criminal proceedings for not
filing of income tax return only or for evasion of tax? To
which he replied that ‘The proposal was sent through proper
channel to the PCIT as the accused has not filed her return of
income within time even after issuance of notice under
Section 142(1) of The Income Tax Act and the case of
accused was pushed by the Directorate of System under
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operation clean money for issuance of notice under Section
142(1) of The Income Tax Act as substantial cash deposits
were made by accused during the demonetization period and
the accused did not file her return of income deliberately.’
Further it is submitted that witness received the reply from
the accused and he had considered the same before sending
the proposal for launching the proceedings. However, due to
lapse of time, he did not recollect the contents of the reply.
Again a question was put that ‘Have you given copy of both
the notices issued by department to the assessee and their
reply given by assessee to your successor on your transfer?
To which witness replied that ‘I had given the complete file
to my successor on my transfer. Vol Today I have brought the
original record from the Income Tax Department and this file
is having only one notice dated 09.03.2018 and on the
judicial file also there is same notice’. Further a question was
put that ‘I put it to you that you have issued another notice
dated 12.03.2018 which was replied along with another
notice. What do you have to say? To which it is replied that
‘It is correct that I had issued notice dated 12.03.2018. Vol.
The reply was considered by me.’ Further a question was put
that ‘Is the notice dated 12.03.2018 issued by you which is a
government property is available in your file or
misappropriated? To which it is replied that ‘Notice dated
12.03.2018 was issued through ITBA Portal. The ITBA Portal
is maintained by Income Tax Department for sending the
notices upon the assessee(s).’ Again a question was put that
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‘Document Ex. CW 1/2 is mentioned two bank accounts,
have you checked the amount which was deposited in those
accounts and the name of account holders of those accounts.
What do you have to say?’ to which witness replied that ‘The
data of cash deposits and bank accounts were pushed by
Directorate of Systems of the assessee where details are
available.’ Learned defence counsel again put a question
that ;Have you seen any income tax return filed earlier by the
assessee/accused or not? To which answer given by accused
is that ‘As far as I remember accused had not filed any return
of income earlier.’ Witness denied the suggestion that he was
deposing falsely or that he had not issued any notice in such
manner as deposed by him in his examination in chief.
4 Upon conclusion of post charge evidence, statement of accused was
recorded u/s 313 Cr.P.C on 05.10.2024. The accused elected to lead
defence evidence, however, on 23.10.2024 learned counsel for
accused has submitted that he does not wish to lead evidence in
defence and will directly argue his submissions at the time of final
arguments.
5 Final arguments heard and record perused.
6 During arguments it is submitted by learned SPP that complainant
has examined two witnesses to prove its case of non filing of return
of income under Section 139 of the Income Tax Act, 1961, despite
deposition of substantial cash amount of Rs.13,29,000/- during
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demonetization period by the accused and despite issuance of
number of notices under Section 142 of the Income Tax Act. It is
submitted that CW-1 is Sh. Deepak Hooda who had proved the
notice under Section 142(1) of The Income Tax Act dated
09.03.2018 Ex. CW 1/1, proposal for prosecution Ex. CW 1/2,
show cause notice Ex. CW 1/3, replied filed by accused Ex. CW
1/4, notice dated 18.02.2019 Ex. CW 1/5, reply of accused dated
21.02.2019 Ex. CW 1/6, order sheet Ex. CW 1/7, sanction Ex. CW
1/8 and remain consistent in his cross examination. CW-2 is Sh.
Raju Kumar Gupta who has relied upon documents exhibited by
CW-1. It is submitted that both these witnesses have 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 in the case at hand, the accused has
not even filed income tax return. 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. A
request has been made to convict and punish the accused
accordingly.
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7 Learned counsel for accused has vehemently opposed the complaint
and the submissions advanced on behalf of complainant. It is
submitted that in its reply to notices issued by the officers of
complainant, it has been explained to them that accused is a home
maker and does not have any independent income which is subject
to provisions of Income Tax Act. It is submitted that the cash
deposited by accused during demonetization period was collected
by accused as her savings, her stridhan, cash received by her at the
time of marriage of her two sons received from the side of her
daughter in laws, cash received from her brothers who are farmers
on occasion of different festivals and family functions and cash
given to her by her husband who is a retired government servant
and cash received from her son who is working with Air India as
Commander Pilot. It is submitted that the said cash has been given
either to run the home by her husband or son or by relatives
(brother, in laws of sons etc.) on some festival or occasion and none
of the above said way of receiving the cash by her is taxable. It is
submitted that accused has filed Form-15G regarding her assets
which are non taxable under Section 197A of the Income Tax Act,
1961. It is submitted that notice under Section 142 of the Income
Tax Act was served to the accused by the complainant after filing of
the present case. It is further submitted that as accused had gone in
appeal against the assessment notice on 28.01.2020, complainant
having reason to believe that the present complaint filed against
accused is baseless, started making efforts to induce her to go for
settlement and a letter dated 02.03.2020 was sent to her to settle the
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case in Vivad se Vishwas Scheme 2020. It is submitted that accused
has finally succumbed to the inducement of complainant and settle
the case in Vivad se Vishwas Scheme 2020. It is submitted that by
inducing the accused in such a way, the complainant has snatched
the right of accused to appeal. Learned counsel for accused has
relied on following judgments in defence of accused:-
(i) Sayarmull Surana vs. Income Tax Officer, Crl. R.C. No.112 of
2011 Crl. M.P. No.1 of 2011 November, 14, 2018 in 101
taxmann.com 358; (ii) S.P. Sales Corporation vs. S.R. Sikdar (1993)
113 Taxation 203 (SC); (iii) G.L. Didwania vs. ITO (1995) 224 ITR
687 (SC); (iv) K.C. Builder vs. ACIT (2004) 265 ITR 562 (SC); (v)
Manav Menon vs. Deputy Commissioner of Income Tax in Crl. O.P.
No.26013 of 2021 and Crl. M.P. Nos. 14387 & 14390 of 2021 dated
17 November 2023; (vi) Nelofar Currimbhoy vs. Assistant
Commissioner of Income Tax Special Leave to Appeal (Crl.)
No.3714 of 2013 dated 22 August 2014 and leave granted against
the order dated 13.03.213 in Crl. M.C. No. 2110/2010 passed by the
High Court of Delhi.
8 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
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(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; or
(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:
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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, in the prescribed form and verified in the prescribed manner and
setting 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
142 Enquiry before assessment.
(1) 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 115WD
or section 139 or in whose case the time allowed under sub-section (1) of
section 139 for furnishing the return has expired a notice requiring him, on a
date to be therein specified,–
(i )where such person has not made a return within the time allowed under
sub-section (1) of section 139 or before the end of the relevant assessment
year, to furnish a return of his income or the income of any other person in
respect of which he is assessable under this Act, in the prescribed form and
verified in the prescribed manner and setting forth such other particulars as
may be prescribed, or :
Provided that where any notice has been served under this sub-section for the
purposes of this clause after the end of the relevant assessment year
commencing on or after the 1st day of April, 1990 to a person who has not
made a return within the time allowed under sub-section (1) of section 139 or
before the end of the relevant assessment year, any such notice issued to him
shall be deemed to have been served in accordance with the provisions of this
sub-section:,CC No. 3896/2019
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(ii)to produce, or cause to be produced, such accounts or documents as the
Assessing Officer may require, or
(iii)to furnish in writing and verified in the prescribed manner information in
such form and on such points or matters (including a statement of all assets
and liabilities of the assessee, whether included in the accounts or not) as the
Assessing Officer may require :
Provided that–
(a)the previous approval of the Joint Commissioner shall be obtained before
requiring the assessee to furnish a statement of all assets and liabilities not
included in the accounts;
(b)the Assessing Officer shall not require the production of any accounts
relating to a period more than three years prior to the previous year.
“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 merely when its
existence is establish by a preponderance of probability.”]
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9 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 deposition of
substantial amount of cash during demonetization despite issuance
of notice under Section 142 of the Income Tax Act by the
complainant. During settlement both the parties were at agreement
with regard to fact that the accused is a home maker and does not
have a regular source of income, which require filing of return of
income by her. The triggering point for issuance of notice under
Section 142 of the income Tax Act was deposition of cash of
Rs.13,29,000/- by the accused in her bank account during
demonetization. However, it is noted that the postal receipts of
service of these notices or tacking report regarding service of these
notices to accused have not been proved by the complainant. In the
absence of proof of service of notice under Section 142 of the
Income Tax Act, the liability of accused under Section 276CC of the
Income Tax Act for non compliance of notice under Section 142 of
the Income Tax Act does not arise. As far as the filing of return
under Section 139 of the Income Tax Act is concerned, it has never
been case of the complainant that the accused was having income in
the previous year and later years for which she 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
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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
require the outstanding tax demand of more than Rs.3,000/- for
conviction under Section 276CC of the Income Tax Act.
10 Further the complainant was required to prove willingness on
the part of accused as one of the essential ingredient of offence
under 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. Hon’ble Apex Court
in Prem Dass vs. ITO (1999) 236 ITR 683 has observed :
“Wilflful 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 acquittingCC No. 3896/2019
18 of 19judge 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 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 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 witnesses have 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. 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. The wilfulness in the sanction has been presumed only on
the basis of Section 278E of the Income Tax Act.
11 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
CC No. 3896/2019
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filing of return of income under Section 276CC of the Income Tax
Act, 1961 in compliance of notice under Section 142 of the Income
Tax Act, 1961 as the service of notice under Section 142 of the
Income Tax Act, assessment order passed against accused and
willfullness on the part of accused in non furnishing of return could
not be proved.
12 In view of above discussion, accused is acquitted for offence
under Section 276CC of the Income Tax Act.
Digitally signed MAYANK by MAYANK Announced in Open Court MITTAL MITTAL Date: 2025.01.23 on 23rd January 2025 17:26:00 +0530 MAYANK MITTAL ACJM(Special Acts), CENTRAL TIS HAZARI COURTS DELHI This judgment consists of 19 pages and each and every page of this judgment is signed by me. CC No. 3896/2019