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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
JASJIT SINGH BEDI, J.
M/s. Hansa Metallics Limited & Ors. – Petitioners
Versus
Deputy Commissioner of Income Tax – Respondent
CRM-M-43841 of 2018
Decided On : 22-01-2024
JUDGMENT
Jasjit Singh Bedi, J.
The prayer in the present petition under Section 482 Cr.P.C. is for quashing of the Complaint No.1368 of 2014 dated 01.04.2014 (Annexure P-6) under Sections 276C read with Section 278B of the Income Tax Act, 1961, the impugned order dated 20.08.2018 (Annexure P-7) vide which a prima facie case is stated to be made out, the order dated 06.09.2018 (Annexure P-8) vide which the charges have been framed and all subsequent proceedings arising therefrom.
2. The brief facts of the case as emanating from the pleadings are that the petitioner No.1 is a Limited Company and is assessed to tax by the respondent. The petitioner Nos.2 to 4 are the Directors of petitioner No.1.
3. The petitioner No.1 filed its return for income for Assessment Year 2012-13 on 29.09.2012 declaring a total income of Rs. 8,20,53,544/-. As per the aforesaid return of income, the self-assessment of tax of Rs. 2,10,91,150/- was pending on 29.09.2012. From the perusal of the assessment record, it was found that the self-assessment tax under Section 140A(3) of the Income Tax Act, 1961 of Rs. 2,10,91,150/- has actually been paid as follows:-
| Dated | Amount | Head |
| 10.07.2013 | Rs. 2,10,91,150/- | Self-assessment tax |
This self-assessment tax was alleged to be payable before the filing of the aforesaid Return of Income for the Assessment Year 2012-13 on 29.09.2012.
4. After the payment of this tax liability alongwith interest on 10.07.2013, the respondent issued a show cause notice to the petitioner on 11.02.2014 wherein it was stated that the petitioners had failed to pay self-assessment tax and therefore, prosecution under Section 276C(2) of the Income Tax Act was to be initiated. The petitioner was asked to show cause before 19.02.2014 as to why the prosecution proceedings should not be initiated. A copy of the show cause notice dated 11.02.2014 is attached as Annexure P-1 to the petition. The petitioner responded to the aforementioned show cause notice on 19.02.2014 stating that since the notice had only been received a day earlier more time was required to respond to the same. The letter dated 19.02.2014 is attached as Annexure P-2 to the petition.
5. The respondent issued yet another show cause notice dated 24.04.2014 reiterating the contents of the earlier show cause notice. The copy of the show cause notice dated 24.02.2014 is attached as Annexure P-3. The petitioner again responded seeking some time to furnish an explanation. The response dated 27.02.2014 is attached as Annexure P-4 to the petition.
6. Without waiting for a response from the petitioners, legal opinion had also been sought from the Standing counsel of the Income Tax Department vide memo dated 07.02.2014. The copy of the said memo dated 07.02.2014 is attached as Annexure P-5 to the petition.
7. The Standing Counsel for the Income Tax Department vide written communication dated 25.02.2014 gave an opinion in the affirmative for launching of prosecution under Section 276C(2) of the Income Tax Act against the petitioners.
8. Based on the aforementioned opinion, the impugned complaint dated 29.03.2014 came to be filed which is attached as Annexure P-6 to the petition.
The petitioners appeared before the Courts below and the said Court vide order dated 20.08.2018 came to be conclusion that a case was made out. The copy of the said order dated 20.08.2018 is attached as Annexure P-7. The charges came to be framed vide order dated 06.09.2018. The copy of the said order is attached as Annexure P-8 to the petition.
9. The complaint dated 29.03.2014 (Annexure P-6), the impugned order dated 20.08.2018 (Annexure P-7), the order framing charges dated 06.09.2018 (Annexure P-8) and all subsequent proceedings arising therefrom are impugned in the present petition.
10. The learned Senior counsel for the petitioners contends that the petitioners are being prosecuted for making an attempt to evade the tax which was self-assessed by them while filing the Income Tax Return for the A
AI
Delayed payment of income tax does not constitute tax evasion under Section 276C of the Income Tax Act, requiring evidence of willful intent to evade tax for prosecution.
object of launching criminal prosecution for wilful default in complying with the provisions of the Income Tax Act is to prevent evasion of tax
Willful default in tax payment under Section 276 C (2) requires proof of intentional evasion; mere delay, along with demonstrated financial difficulties, does not suffice for prosecution.
The main legal point established is that the failure to remit tax, without evidence of a wilful attempt to evade tax, does not constitute an offence under Section 276 C (2) of the Income Tax Act.
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....
It is not the case of the Income Tax department that the self assessment tax returns which were filed had an element of concealment on any factual aspects and tried to evade tax, which is liable to p....
Wilful attempt to evade tax under Section 276C of the Income Tax Act, 1961 requires something more than what is required for imposing a penalty under Section 271(1)(C) of the Act. There must be some ....
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 ....
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