Prosecution under S.276CC requires jurisdictional Assessing Officer, regular assessment, and penalty initiation; absent these, quashed as abuse of process.

ORDER :

G.K. ILANTHIRAIYAN, J.

This petition has been filed to quash the proceedings in EOCC.NO.42/2019 on the file of the Additional Chief Metropolitan Magistrate (Economic Offences ) I Egmore, chennai Offences Wing, Chennai.

2. The respondent lodged a complaint for the offence punishable under Section 276 CC of the Income Tax,1961 for the Assessment Year 2014-2015. It is alleged that the petitioner had wilfully failed to file the return of Income Tax for the Assessment Year 2014-15 and thus committed the offence under Section 276 CC of the Income Tax Act,1961 (hereinafter called as the “Act”) .On receipt of the said complaint the Trial Court had taken cognizance in EOCC No. 42 of 2019 and issued summons to the petitioner.

3. The learned counsel for the petitioner submits that the respondent has no jurisdiction to lodge any complainant by virtue of any notification under Section 119 or by virtue of any transfer of cases under Section 127 of the Act. The respondent is not an Assessing Officer holding jurisdiction over the petitioner’s case. The Income Tax Officer, Non Corporate Ward 17(2), Chennai only has jurisdiction over the case of the petitioner. Infact the Income Tax Officer had issued Show Cause Notice. However, the complaint has been lodged by the Assistant Commissioner of Income Tax who has got no jurisdiction. Even according to the respondent, the petitioner is assessed to Income Tax by the Income Tax Officer Non Corporate Ward 17(2),Chennai, but the sanction to prosecute the petitioner had been issued by the Principal Commissioner of Income Tax which is contrary to the fact as well as the materials placed by the respondent. The complaint was lodged without making a regular assessment and examining the application of proviso of Section 276 CC of the Act. The respondent failed to state that the petitioner had wilfully failed to file the return and the respondent also failed to appreciate any piece of evidence to that effect. Without considering the same, the Principal Commissioner of Income Tax accorded sanction to prosecute the petitioner mechanically. There was absolutely no wilful default on the part of the petitioner to file the return of Income as such no ingredients are available to attract the offence under Section 276 CC of the act. He further submits that the respondent did not initiate any penalty proceedings. When the respondent failed to initiate any penalty proceedings as against the petitioner, the respondent cannot prosecute the petitioner for the offence punishable under Section 276 CC of the Act. In fact, after receipt of the Show Cause Notice and before filing the complaint, the petitioner filed his return of Income. Therefore, as on date no tax iss due on the part of the petitioner. Therefore, no offence made out under Section 276 CC of the Act. In support of his contention he relied on the Judgment of the Hon’ble Supreme Court of India in the case of K.C.Builders Vs Assistant Commissioner of Income Tax reported in [2004] 135 Taxman 461 (SC)[2004] 265 ITR 562 (SC)/[2004] 186 CTR 721 (SC) and the relevant portion is extracted hereunder:

26. The Assistant commissioner of Income-tax cannot proceed with the prosecution even after the order of concealment has been set aside by the Tribunal. When the Tribunal has set aside the levy of penalty, the criminal proceedings against the appellants cannot survive for further consideration. In our view, the High Court has taken the view that the charges have ben framed and the matter is in the stage of further cross-