The central legal point established in the judgment is the requirement of willful failure to produce accounts and documents for initiating criminal prosecution under Section 276-D of the Income Tax Act, and the implications of non-compliance with notice or direction under Section 272A(1)(d).

JUDGMENT

Harnaresh Singh Gill, J. - The present petition under Section 482 Cr.P.C. has been filed for quashing of complaint dated 29.03.2017 (Annexure P-1) under Section 276-D read with Section 278-B of the Income-Tax Act, 1961 (hereafter referred to as the 'Act') for the Assessment Year 2014-15, and the summoning order dated 30.03.2017 (Annexure P-2) on the ground that the same does not disclose commission of any offence punishable under the aforesaid Sections of the Act.

2. As per the facts of the present case, petitioner No.1 filed its returns of income for the Assessment Year 2014-15 on 29.11.2014, declaring income of Rs.99,10,030/- after claiming deduction of Rs.22,97,280/- in Chapter-VI-A, but the case of the petitioner was selected for scrutiny and a notice under Section 143(2) of the Act was issued on 24.09.2015. The notice under Section 143(2) and another notice under Section 142(1) of the Act was issued on 09.11.2016 asking the petitioner to produce the cash book. The Accountant produced the same produced on 27.12.2016. It is reflected from the noting sheets dated 27.12.2016 that the Accountant took back the cash book and accordingly, summons were sent to the Managing Director to produce the cash book on 28.12.2016, which was received by Parveen, servant, as Rajinder Garg was not present and thereafter, the Assessing Officer passed an ex-parte assessment order on 29.12.2016.

3. It is further the case of the petitioner that a notice under Section 133(6) of the Act was issued to furnish cash book on 17.02.2017 and the same was submitted on 21.02.2017 under due acknowledgment. Despite the assessee's having produced the cash book on 27.12.2016 and again on 21.02.2017, a show cause notice for prosecution under Section 276-D of the Act was issued on 23.02.2017 for non-production of the cash book. A specific reply was filed by the assessee that there was no reason on the part of the assessee to evade production of cash book. Similar notice was issued to petitioner No.2, Managing Director and petitioner No.3, former Director even though he had resigned in April 2015.

4. As per the stand taken by the respondent-the Assistant Commissioner of Income-Tax, the summons under Section 131 of the Act were issued and were served through a person working in the house and during assessment proceedings under Section 143(3) of the Act, notice under Section 142(1) dated 09.11.2016 was issued to the assessee and was duly served and the assessee was asked to submit the cash book. The case was fixed for 17.11.2016 and on the said date, the Authorized Representative (A.R.) of the assessee appeared but did not submit the cash book and the matter was adjourned to 22.11.2016 but on the said date also, none had appeared. The Authorized Representative of the assessee appeared on 23.11.2016 but did not submit the cash book. After so many dates, the Authorized Representative of the assessee and the Accountant appeared and produced the cash book on 27.12.2016 and it was found that the assessee had made several purchases, freight payments etc. of more than Rs.20,000/- in a day in cash. The assessee was also asked to show whether or not these were covered by exception to Section 40A(3) of the Act given in Rule 6 DD.

5. It is further the case of the Revenue that during the proceedings in the evening of 27.12.2016, attended by the Authorized Representative of the assessee, he was informed that the cash book had been taken away by them without permission. He was asked to appear on 28.12.2016 with cash book, but nobody appeared. The Authorized Representative was telephonically asked to return the cash book, but to no avail. Repeated attempts to contact them had failed as their phones were found switched off. Thereafter, summons under Section 131 were issued at 11.00 A.M. on 28.12.2016 to the Managing Director and The Accountant to attend office at 3.00 P.M. on the same day, but Managing Director refused to accept notice and the notice was accepted by one Par