Mere failure to pay admitted tax does not constitute wilful evasion under S.276C(2) unless deliberate intent proven; presumption under S.278E applies post foundational facts.

IN THE HIGH COURT OF JUDICATURE AT MADRAS RESERVED ON : 22.04.2026 PRONOUNCED ON : 29.04.2026 CORAM THE HONOURABLE MR.JUSTICE M.NIRMAL KUMAR Crl.O.P.No.9848 of 2026 and Crl.M.P.Nos.7042 & 7043 of 2026 Abdul Khader Mohammed Farook (M/56), S/o.Abdul Khader, No.59, M.K.N.Road, Guindy, Chennai-600032.

PAN: AAHPF4076K. ... Petitioner Vs.

Deputy Commissioner of Income Tax, Corporate Circle-1[1], Numgambakkam, Chennai-600034. ... Respondent PRAYER: Criminal Original Petition is filed under Section 528 of Bharatiya Nagarik Suraksha Sanhita, 2023, to call for the records relating to E.O.C.C.No.133 of 2019 pending on the file of the Additional Chief Metropolitan Magistrate (Economic Offences), Egmore, Chennai and quash the same.

For Petitioner : Ms.N.Lavanya For Respondent : Ms.M.Sheela, Senior Standing Counsel (Income Tax) and Mr.H.Siddarth, Junior Standing Counsel (Income Tax)

ORDER The petitioner/accused facing trial for offence under Section 276C(2) of Income Tax Act, 1961 before the learned Additional Chief Metropolitan Magistrate (Economic Offences), Egmore, Chennai in E.O.C.C.No.133 of

2019, has filed this Quash Petition.

2.Learned counsel for the petitioner submitted that the allegation against the petitioner is that the petitioner filed his return of income for the Assessment Year 2017-18 on 30.03.2018 declaring the tax and interest liability of Rs.5,95,616/- but not paid any tax liability at the time of filing the return. Such non payment of admitted tax constitutes a wilful default to evade payment of tax attracting prosecution under Section 276C(2) of Income Tax Act, 1961. Learned counsel further submitted that the entire complaint proceeds on erroneous understanding of the scope of Section 276C(2) of Income Tax Act, 1961. As per Section 276C(2) of Income Tax Act, 1961, criminalisation arises only if wilful attempt to evade payment of tax is found, hence, the offence necessarily requires a deliberate and conscious act showing intention to evade payment of tax. In this case, the petitioner voluntarily disclosed the entire income and tax liability in the return filed before the Income Tax Department. Once the liability is declared in the return of income, the allegation of evasion of tax becomes inherently untenable. The Hon’ble Apex Court and this Court in plethora of cases held that the word employed in the Section viz., “wilful attempt” cannot be imported to mere failure to pay the tax.

3.Learned counsel further submitted that the complainant does not disclose any act of concealment of income, falsification of accounts, suppression of transactions or any other act suggesting evasion. The allegation in the complaint is only that the admitted tax liability not immediately paid. Mere non-payment or delay in payment of admitted tax does not constitute evasion. Learned counsel further submitted that during the relevant period when the return was filed, the petitioner was suffering from ill health and undergoing medical treatment and his business also incurred severe loss consequent to which SARFAESI proceedings initiated and multiple properties brought to distress sale and sold by way of public auction. Due to such circumstances beyond the control of the petitioner, the petitioner unable to discharge the tax liability. The omission, if any, is purely inadvertent, neither wilful nor wanton. In this case, the sanction for prosecution was granted by the Principal Commissioner of Income Tax under Section 279(1) of Income Tax Act, 1961 and the sanction granted mechanically without proper application of mind to the essential ingredients of the offence. The respondent relies upon the presumption under Section 278E of Income Tax Act, 1961 relating to culpable mental