HON’BLE SRI JUSTICE K. LAKSHMAN CRIMINAL APPEAL No.67 OF 2023

JUDGMENT

This Criminal Appeal is filed by Accused No.2 challenging the same judgment dated 12.01.2023 passed by Special Judge for Economic Offences, Hyderabad (for short ‘trial Court’) in C.C. No.246 of 2016.

2. Heard Mr. R. N. Hemendranath Reddy, learned Senior Counsel representing Mr. G.V.L. Murthy, learned counsel for the appellant - accused No.2 and Mrs. J. Sunitha, learned Senior Standing Counsel for Income Tax appearing on behalf of respondent No.2.

3. Vide the aforesaid judgment, the trial Court found the appellant herein - accused No.2 guilty of the offence punishable under Section - 276CC read with 278B of the Income Tax Act, 1961 (for short ‘Act, 1961’) and accordingly sentenced him to undergo rigorous imprisonment for one (01) year and to pay a fine of Rs.3,000/- (Rupees Three Thousand Only), in default, to undergo simple imprisonment for fifteen (15) days for the said offence.

4. The case of the prosecution against the appellant herein and other accused is as under:

i) Accused No.1 - M/s. Ilios India Private Limited is a Company incorporated under the Companies Act, 1956, while accused Nos.2 to 4 including the appellant herein are its Directors and they are responsible for day-to-day affairs of the said Company.

ii) Accused No.1 Company has not filed its return of income for the Assessment Year 2013-14 within the due time allowed as per Section - 139 (1) of the Act, 1961, though it had receipts from Technical/Professional Services during the relevant Financial Year of Rs.28,09,000/- and it had turnover of chargeable services in its service tax return amounting to Rs.33,75,000/- and it had made payments against credit card bills to the tune of Rs.5,45,000/-.

iii) A show-cause notice was issued to accused No.1 on

06.06.2016 and show-cause notices were issued to accused Nos.2 to 4 on 28.06.2016 proposing for launching of prosecution under Section - 276CC for not filing its return of Income for Assessment Year 2013-14 within due time allowed as per Section - 139 (1) of the Act, 1961.

iv) Accused No.3 attended personally on 13.07.2016 and admitted that the Company did not file its return of income for Assessment Year 2013-14 and requested some time till 15.07.2016 to furnish the audited accounts of accused No.1 for the said year. The appellant herein has furnished a letter dated 12.07.2016 seeking more time which was allowed till 18.07.2016, but there was no response thereafter. There was no response from accused No.4. Thus, it is clear that they have no explanation to offer against proposal to launch prosecution under Section

276CC read with 278B of the Act, 1961.

5. Section 276CC clearly says that if a person willfully fails to furnish the return of income in due time, he is liable to be prosecuted as per that provision. The accused failed to submit their return of income within the due date stipulated in the Act, 1916. Therefore, they have committed the aforesaid offence.

6. The trial Court framed charges under Section - 276CC and

276CC read with 278B of the Act, 1961. On examination, the Accused denied the said charges and prayed for trial and accordingly the trial Court conducted trial.

7. During trial, the prosecution examined one witness as PW.1 and got marked Exs.P1 to P9. The appellant herein - accused No.2 was examined as DW.1 and got marked Exs.D1 to D4 to disprove the prosecution case.

8. On completion of trial, and on consideration of evidence, both oral and documentary, the trial Court found the accused guilty of the aforesaid charges and accordingly convicted them vide the impugned judgment and imposed sentence on them in the manner stated above.

9. Feeling aggrieved by the said judgment, accused No.2 preferred the present appeal.

10. The learned Senior Counsel for the appellant - accused No.2 contended as follows:

i) The trial Court failed to consider the assessment for the assessment year 2013-14, Ex.D1 order dated 25.11.2019, where-under the Income Tax Offi