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IN THE HIGH COURT OF JHARKHAND AT RANCHI
SANJAY KUMAR DWIVEDI, J.
Gunwant Singh Saluja - Petitioner
Versus
The State of Jharkhand & Ors. - Opposite Parties
Cr. M.P. No. 1244 of 2017
Decided On : 10-10-2023
Income Tax - Quashing of Criminal Proceedings - Section 276CC of the Income Tax Act, 1961 - [Section 276CC] - The judgment quashed the entire criminal proceedings arising out of Complaint Case No.09 of 2012 including the order taking cognizance dated 04.06.2012 passed by the learned Special Judge, Economic Offences, Ranchi, pending in the Court of the learned Special Judge VII, Economic Offences, Ranchi.
Fact of the Case:
The petitioner filed a petition to quash the criminal proceedings arising from a complaint case filed by the Income Tax Department under Section 276CC of the Income Tax Act, 1961. The petitioner argued that the penalties and assessments against them had been set aside by the Appellate Authority and the Tribunal, rendering the criminal case unsustainable.
Finding of the Court:
The Court found that the amount in question had already been settled through orders passed by the Appellate Authority and the Tribunal. It referenced the judgment in K.C. Builders and Another v. Assistant Commissioner of Income Tax, which held that once penalties are cancelled due to no concealment of income, the quashing of prosecution under Section 276CC is automatic.
Issues: The main issue was whether the criminal case under Section 276CC of the Income Tax Act could survive when the penalties and assessments against the petitioner had been set aside by the Appellate Authority and the Tribunal.
Ratio Decidendi: The Court relied on the judgment in K.C. Builders and Another v. Assistant Commissioner of Income Tax, which established that the quashing of prosecution under Section 276CC is automatic when penalties are cancelled due to no concealment of income. It also considered the proviso to Section 276CC, which provides relief to genuine assessees by allowing further time to furnish returns and exempts them from prosecution if the tax payable does not exceed a certain amount.
Final Decision: The Court quashed the entire criminal proceedings arising from the complaint case, including the order taking cognizance, as the penalties and assessments against the petitioner had been set aside, rendering the prosecution unsustainable.
JUDGMENT :
Heard Mr. Sumeet Gadodia, learned counsel for the petitioner, Ms. Nehala Sharmin, learned counsel for the State and Mr. Ratnesh Nandan Sahay, learned counsel for the opposite party no.2-Income Tax Department.
2. This petition has been filed for quashing the entire criminal proceedings arising out of Complaint Case No.09 of 2012 including the order taking cognizance dated 04.06.2012 passed by the learned Special Judge, Economic Offences, Ranchi, whereby, cognizance under Section 276CC of the Income Tax Act, 1961 has been taken against the petitioner, pending in the Court of the learned Special Judge VII, Economic Offences, Ranchi.
3. The complaint case was filed by opposite party no.2 alleging therein that a search under Section 132 of the Income Tax Act was undertaken in Mongia Group of cases by the Investigating Wing, Jharkhand and during the course of search operation, various incriminating documents relating to the petitioner were found and seized. It was further alleged that notices under Section 153A of the Income Tax Act for filing of returns of income for the Assessment Year 2005-06 to 2009-10 and 2010-11 were issued by the Assistant Commissioner of Income Tax, Central Circle, Dhanbad and the same were served on 15.02.2011 for compliance, but there was no compliance. It was also alleged that the petitioner was granted time till 15.04.2011 and further till 05.05.2011 for compliance, but there was no compliance. It was alleged that under the circumstances, the Assessing Officer issued a show-cause notice under Section 276 of the Income Tax Act on 19.07.2011 for initiation of prosecution proceeding for non-filing of return of income in time. It was further alleged that the petitioner filed a letter dated 26.07.2011 and took a plea that since the office of the Director General of Central Excise Intelligence, Jamshedpur has not given him the copy of the documents seized on 27/28.03.2006 during the course of search and seizure operation in his business premises, he is unable to furnish the return. It was also alleged that the Assistant Commissioner of Income Tax, Central Circle, Dhanbad wrote a letter to the Director General, Central Excise, Intelligence, Jamshedpur seeking his comments on seized documents. It was also alleged that in reply to the above letter, the Director General of Central Excise, Intelligence, Jamshedpur said that the authorized representative of M/s Mongia Steel Ltd. has already collected the original and photocopy of the documents seized. It was further alleged that the Assessing Officer submitted a current status report of the proposal of initiation of prosecution proceeding under Section 276CC vide letter dated 30.09.2011 and another letter dated 14.10.2011 to the Commissioner of Income Tax, Central Circle, Patna and submitted that still the petitioner has not filed returns of income. It was also alleged that the Commissioner of Income Tax, Central Circle, Patna gave his opinion that the petitioner has failed to comply with the notices of the Assessing Officer without assigning any reasons and has also failed to file the return of income and, thus, there was willful omission on the part of the petitioner in filing returns of his income and, as such, accorded sanction under Section 279 of the Income Tax Act for launching prosecution under Section 276CC of the Act for not filing returns of income without giving any reasonable cause and non-compliance of the notices of the Assessing Officer. On the basis of the aforesaid allegations, Complaint Case No.09 of 2012 was filed by opposite party no.2 in the Court of the learned Special Judge, Economic Offence, Ranchi.
4. Mr. Gadodia, learned counsel for the petitioner submits that the search and seizure operation under Section 132 of the Income Tax Act, 1961 was conducted by the Investigation Wing, Jharkhand. Pursuant to search and seizure, notices under Section 153A of the Income Tax Act was issued to the petitioner on 15.02.2011 for filing of income t
AI
The main legal point established in the judgment is that once penalties are cancelled due to no concealment of income, the quashing of prosecution under Section 276CC of the Income Tax Act is automat....
An annulled penalty under the Income Tax Act negates the foundation for criminal prosecution for concealment unless reversed, thus quashing ongoing prosecution.
The main legal point established in the judgment is that willful concealment of income and failure to file income tax returns within the stipulated time constitute an offence under Section 276CC of t....
The court established that willful failure to file income tax returns within the prescribed time is a punishable offence under Section 276CC of the Income Tax Act, and that the existence of mens rea ....
The pendency of re-assessment proceedings and the setting aside of assessment orders by the Income Tax Appellate Tribunal do not bar the launch of criminal prosecution for violations under the Income....
The main legal point established in the judgment is the significance of timely filing of the Return of Income, the consequences of wilful attempt to evade tax, penalty, and interest chargeable, and t....
object of launching criminal prosecution for wilful default in complying with the provisions of the Income Tax Act is to prevent evasion of tax
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