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.

JUDGMENT :

S. M. Modak, J.

1. The only issue arisen in this Petition is whether ingredients of Section 276 C (2) of Income Tax Act are made out and whether Writ Jurisdiction under Article 227 of the Constitution can be invoked.

2. The Complainant Income Tax Department contends that, along with the Return of Income / at the time of submitting Return of Income, the assessee / accused / petitioner has not deposited the amount of Income Tax which is due as per his calculation. They further contend that, even subsequently, he has not deposited it.

3. That is why, not only there is a default but also there is a willful default as contemplated as per the provision of 276 C (2) of the said Act.

4. As against this, it is the contention of the Assessee that there is no willful default and in fact he has paid the amount of Income Tax due as per self assessment on 16.01.2023 (though not within initial period).

5. After initial correspondence, as required as per Income Tax Act and after getting sanction, complaint is filed in the Court of JMFC, Pune against the Assessee. It is numbered as Summary Criminal Case No. 149 497/2024. The learned Magistrate was pleased to issue process for the offence punishable under Section 276 C (2) of the said Act. This order is under challenge by way of this Petition.

6. I have heard learned Advocate for the Petitioner and learned Advocate Shri Ashok Kotangle for Respondents.

7. The case put up by both the parties from the pleadings in nutshell is as follows: -

a) The assessee runs the business of stone crushing on partnership business in the name and style as ‘Shree Ambika Stone Crusher’ and also engaged in the business of manufacturing precast cement pipes in partnership firm basis in the name and style as “Kalokhe Pipes & Prodcast Industries”.

b) He submitted Income Tax Return for the assessment year 2022-2023 on 5.11.2022. The relevant details are as follows:-

c) The Income tax liability was required to be paid before furnishing such return of income as contemplated under the provisions of Section 140-A of the said Act.

d) It was not cleared on 5.11.2022 but amount of Rs. 95,89,000/- was paid on 16.01.2023.

e) The return was processed on 15.12.2023 under Section 143(1) of the Income Tax Act and Income tax liability of Rs.1,05,04,470/- was ascertained.

f) Amount was demanded as per notice under Section 143 (1) of the Income Tax Act (Page 53).

g) Assessing Officer submitted a proposal dated 26.07.2024 for launching of prosecution for an offence punishable under Section 276-C (2) of the said Act and it was endorsed by Principal Commissioner of Income Tax (Central), Pune vide letter dated 29.07.2024.

h) PCIT (Central) Pune vide letter dated 12.08.2024 called explanation of assessee for not granting sanction to prosecute for the offence punishable under section 276 (C) of said Act (Page 63).

i) The assessee filed his submission online through e-filing portal on 16.08.2024 (Page No.65)

j) The assessee has informed about some financial problems within the organization and expressed difficulty in paying the tax. (However, it is the department’s say that, any details are not given / credible documentary evidence is not submitted).

k) The assessee informed that subsequently he has paid the amount due towards income tax on 16.01.2023 with interest and as such, he is not in default with the respective income tax liability for the assessing year 2022-2023. Hence, he requested for dropping