Allegations of tax evasion must demonstrate conscious and willful concealment of income, which are vital in determining liability under the Income Tax Act, irrespective of amendments to reporting requirements.

ORDER

The criminal prosecutions initiated against the petitioner by the Assistant Commissioner of Income Tax, Central Circle, Thrissur for the commission of offence under Section 276 (C)(1) and 277 of the Income Tax Act, 1961 (hereafter referred to as ‘the I.T Act’) are challenged by the petitioner in these proceedings under Section 482 Cr.P.C.

2. The allegation against the petitioner is that she, a Paediatrician by profession, and operating medical shops by name M/s.Pallimukku Sevana Medicines as a proprietary concern, had substantially concealed her income while filing returns under Section 139 of the I.T Act for the respective assessment years mentioned in the individual cases and thereby resorted to tax evasion. The petitioner is further alleged to have made false statements in the original returns of income filed for the Assessment Years 2008-2009 to 2013-2014. It is stated that the offence came to light pursuant to a search and seizure under Section 132 of the I.T Act conducted on 18.12.2013 in M/s.Sevana Group of Medical Stores and the residential premises of the petitioner. After the issuance of notices under Section 153A /142(1) of the I.T Act, the petitioner filed returns of income under Section 153A of the I.T Act, for the respective assessment years which showed substantially higher income from the income which she had shown in the original returns. After obtaining the necessary sanction under Section 276C(1) of the I.T Act, the Assistant Commissioner of Income Tax filed the complaints before the Additional Chief Judicial Magistrate Court (Economic Offences), Ernakulam which took the complaints to files, assigned case numbers and issued summons for the appearance of the petitioner to answer the charges under Section 276C(1) and 277 of the I.T Act.

3. In these petitions, the petitioner would contend that none of the offences as alleged in the complaints are attracted, in the facts and circumstances of the case. According to the petitioner, the allegations against her, cannot be termed as wilful evasion of tax but only under-reporting or misreporting of income which were brought into the statute book only from 01.04.2017 onwards with the amendment of Section 276C and incorporation of Section 270A in the I.T Act, 1961 by Finance Act, 2016. It is the further contention of the petitioner that once a revised return has been filed under Section 153A of the I.T Act, it shall be deemed to be a return required to be furnished under Section 139 of the I.T Act, and hence there cannot be any allegation of concealment of income or making false statements. Thus, it is stated that the complaints against the petitioner will not disclose any offence.

4. Heard the learned counsel for the petitioner and the learned Standing Counsel for the Income Tax Department.

5. The contention raised by the petitioner about the amendment made to the I.T Act w.e.f 01.04.2007 vide Finance Act, 2016 incorporating misreporting and underreporting of income as culpable violations, are having no relevancy in the facts and circumstances of this case since it could be seen from the complaints filed before the Trial Court that the specific allegation against the petitioner pertains to tax evasion. It is categorically stated by the complainant that the petitioner would have succeeded in evading tax for the assessment years mentioned in the respective complaints if there was no search conducted by the Income Tax Department upon her institutions leading to the seizure of documents and books of accounts revealing the suppression of actual income. The averments in the complaints would clearly show that wilful, deliberate and conscious evasion of tax has been attributed against the petitioner.