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N. J. JAMADAR
Unique Trading Company – Appellant
Versus
Income Tax Officer – 18 (3)(5) – Respondent
JUDGMENT :
1. This is an application under Section 482 of the Code of Criminal Procedure, 1973 (“the Code”) to quash the complaint lodged by the Income Tax Authorities for an offence punishable under Section 276C(2) read with Section 278B of the Income Tax Act, 1961 (“the IT Act, 1961”).
2. Shorn of unnecessary details, the background facts can be stated as under:
(a) Applicant No.1 is a partnership firm registered under the provisions of Indian Partnership Act, 1932. Applicant No.1 is engaged in the business of distribution of welding electrodes, machines and accessories. Applicant Nos.2 to 4 are the partners of applicant No.1 firm.
(b) Applicant No.1 firm had filed its original return of income for Assessment Year (AY) 2010-2011 declaring income of Rs.21,79,850/- computing the tax payable alongwith interest at Rs.7,15,573/-. Out of which Rs.1,06,512/- was claimed as Tax Deducted at Source (TDS) and Rs.1,00,000/- was paid as advance tax. An amount of Rs.5,09,061/- was shown as tax payable on the reported income.
(c) The applicants claim, applicant No.1 firm is a family run concern. Mr. P. G. Purohit, the husband of applicant No.2 and father of applicant Nos.3 and 4, was managing the en
object of launching criminal prosecution for wilful default in complying with the provisions of the Income Tax Act is to prevent evasion of tax
The main legal point established is that the failure to remit tax, without evidence of a wilful attempt to evade tax, does not constitute an offence under Section 276 C (2) of the Income Tax Act.
Willful default in tax payment under Section 276 C (2) requires proof of intentional evasion; mere delay, along with demonstrated financial difficulties, does not suffice for prosecution.
Delayed payment of income tax does not constitute tax evasion under Section 276C of the Income Tax Act, requiring evidence of willful intent to evade tax for prosecution.
The rule of evidence under Section 278 E of the Act regarding rebuttable presumption as to existence of culpable mental state on the part of accused would come into play. As such there is no scope fo....
The determination of wilfulness in filing returns and paying taxes under the Income Tax Act, 1961 is a matter of fact to be adjudicated during trial, and the statutory presumption of culpable mental ....
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