IMPORTANT POINT
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 can be presumed in cases of non-compliance.

ORDER :

THE HONOURABLE MR.JUSTICE G.K.ILANTHIRAIYAN

PRAYER: Criminal Original petition is filed under Section 482 of Criminal Procedure Code, to call for the records in complaint No.EOCC.No.23 of 2019 pending on the file of the Additional Chief Metropolitan Magistrate Court (E.O-II), Egmore and to quash the same.

This criminal original petition has been filed to quash the proceedings in EOCC.No.23 of 2019 pending on the file of the Additional Chief Metropolitan Magistrate Court (E.O-II), Egmore, thereby taken cognizance for the offence under Section 276CC of Income Tax Act, 1961, as against the petitioner.

2. The respondent filed complaint for the offence punishable under Section 276 CC of the Income Tax Act, 1961 (hereinafter called as 'the Act'). for the assessment year 2013-2014. The crux of the complaint is that the petitioner failed to file his return of income for the assessment year 2013-2014 as required under Section 139 of the Act. He is duty bound to file his return of income on or before 30.09.2013 for the assessment year 2013-2014. A search was conducted as per Section 132 of the Act on 03.09.2013. Subsequent to the search, a notice was issued as contemplated under Section 153A of the Act, thereby called upon to file his return of income within a period of 30 days from the date of receipt of the notice. It was duly received and the petitioner failed to file his return of income within the time mentioned in the notice. Once again, a reminder letter was also sent to the petitioner dated 15.07.2014 and 02.06.2015. The petitioner filed reply on 08.06.2016, but no valid reasons were stated for non filing of return of income. But he filed the same only on 19.07.2016 with a delay of more than 15 months and thereby declared his total income of Rs.2,32,48,580/- for the assessment year 2013-2014. Non filing of the income tax return within the time limit is wilful and deliberate on the part of the petitioner. The assessment proceedings was completed for the assessment year 2013-2014 on 12.08.2016 thereby the total income of Rs.3,98,72,510/- was determined against the returned income filed by the petitioner to the tune of Rs.2,32,48,580/-. Therefore, the penalty proceedings were initiated and imposed penalty under Section 271F of the Act on 28.02.2017 for non filing of the return of income under Section 139(1) of the Act.

2.1 Thereafter, sanction was accorded to prosecute the petitioner for the offence punishable under Section 276CC of the Act. Before accorded sanction, sanctioning authority issued show cause notice to the petitioner and the petitioner replied by the explanation dated 09.06.2018. The petitioner explained that for change in auditor, appointing new auditor and obtaining of copies of the seized documents, approaching settlement commission, there was a failure to file return of income and there was delay. Further, the petitioner explained that he had already made payment of taxes in the form of Tax Deduction at Sources (TDS) and requested not to accord sanction for prosecution. In fact, the application filed before the settlement commission was dismissed twice. Further, the petitioner did not ask for any seized documents. The admitted tax payable by the petitioner was higher than the amount which was paid by way of TDS. Therefore, the petitioner has wilfully failed to file his return of income either under Section 139(1) of the Act and also within a period of 30 days from the date of receipt of notice under Section 153A of the Act. Hence, the complaint. On the said complaint, the trial court had taken cognizance in EOCC.No.23 of 2019.

3. Mr.C.Emalias, the learned counsel appearing for the petitioner would submit that on 03.09.2013, there was a search under Section 132 of the Act in the companies which were aggregating land for a setting up of SEZ for companies based out of New Delhi. The petitioner is being a legal consultant to the companies was also searched on 03.09.2013. During the search, the authorities had seized