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 state under Section 278E plays a crucial role in establishing wilfulness.

JUDGMENT

(Prayer: Petition under Section 482 of the Criminal Procedure Code to call for the order of sanction dated 28.6.2016 pending on the file of the second respondent together with complaint made in C.C.No.499 of 2016 pending on the file of the Judicial Magistrate of First Class, Vellore and quash the same.)

In this criminal original petition filed under Section 482 of the Criminal Procedure Code (for brevity, the Code), the petitioner has challenged (i) the sanction order dated 28.6.2016 issued by the second respondent and (ii) the subsequent proceedings initiated by the first respondent in C.C.No.499 of 2016 on the file of the Judicial Magistrate of First Class, Vellore .

2. The Income Tax Department filed a criminal complaint against the petitioner for offences under Sections 276CC and 276C(2) of the Income Tax Act, 1961 (hereinafter called the Act) on the following grounds : (i) For the financial year 2012-13 relevant to the assessment year 2013-14, the petitioner did not furnish his return of income along with the audit report as mandated under Section 139(1) of the Act. The petitioner is under a statutory obligation to furnish his return of income for the assessment year 2013-14 on or before 30.9.2013.

(ii) The petitioner belatedly furnished the return of income for the assessment year 2013-14 on 29.3.2015 by taking advantage of Section 139(4) of the Act, which provides for belated furnishing of return of income till 31.3.2015.

(iii) As per the return of income furnished by the petitioner on 29.3.2015, the petitioner himself had assessed the tax liability at Rs.1,04,94,060/-. Having made such an assessment, the petitioner ought to have paid the tax before filing his return of income or at least on the date of filing his return on 29.3.2015. However, the petitioner paid the self assessment tax only after the receipt of notice from the Assessing Officer, on 14.3.2016.

(iv) The petitioner was issued a show cause notice dated 11.3.2016 as to why criminal prosecution proceedings under Sections 276CC and 276C(2) of the Act should not be initiated against him. There was no response for the said show cause notice even though it was served on the petitioner on 16.3.2016.

(v) In the light of the above allegations, the Income Tax Department proceeded to file a private complaint against the petitioner for the alleged offences under Sections 276CC and 276C(2) of the Act. Aggrieved by that, the petitioner is before this Court.

3. Heard the learned Senior Counsel appearing on behalf of the petitioner and the learned Special Public Prosecutor appearing for the Income Tax Department.

4. The learned Senior Counsel appearing on behalf of the petitioner submitted that the mere delay in filing the return or the delay in paying the self assessment tax, cannot be a ground to initiate criminal prosecution against the petitioner unless the delay is wilful and wanton and that there is not even an averment to that effect in the complaint. He further submitted that the petitioner paid the entire tax before the sanction was accorded by the second respondent and hence, the criminal prosecution against the petitioner is a clear abuse of process of law.   5. The learned Senior Counsel appearing on behalf of the petitioner also submitted that the Income Tax Department is misusing their powers against the petitioner since the petitioner is not a habitual offender and that in the present case, there is a valid reason assigned for the delay in filing the return and paying the self assessment tax. According to him, even if the delay on the part of the petitioner has to be accounted for, there is no need for launching a criminal prosecution, as it is always open to the Income Tax Department to impose penalty and interest. He further submitted that such an extreme step of launching the criminal prosecution is not within the scope of Section 276CC of the Act.

6. In orde