IMPORTANT POINT
Non-filing of return of income u/s 139(1) attracts prosecution u/s 276CC of the Income Tax Act, 1961.

JUDGMENT

K.S. Radhakrishnan, J.

1. We are concerned with four Criminal Appeals No.61 to 64 of 2007, out of which two Criminal Appeals No.61 of 2007 and 63 of 2007 relate to M/s Sasi Enterprises, a registered partnership firm, of which Ms. J. Jayalalitha and Mrs. N. Sasikala are partners, which relate to the assessment years 1991-92 and 1992-93 respectively. Criminal Appeal Nos.62 and 63 of 2007 relate to J. Jayalalitha and N. Sasikala respectively for the assessment years 1993-94. Proceedings giving rise to these appeals originated from the complaints filed by the Assistant Commissioner of Income Tax, Chennai, before the Additional Chief Metropolitan Magistrate (Egmore), Chennai, for the willful and deliberate failure to file returns for the assessment years 1991-92, 1992-93 and hence committing offences punishable under Section 276 CC of the Income Tax Act, 1961 (for short “the Act”). Complaints were filed on 21.8.1997 after getting the sanction from the Commissioner of Income Tax, Central II, Chennai under Section 279(1) of the Income Tax Act. Appellants filed two discharge petitions under Section 245(2) Cr.P.C., which were dismissed by the Chief Metropolitan Magistrate vide order dated 14.6.2006. Appellants preferred Crl. R.C. Nos.781 to 786 of 2006 before the High Court of Madras which were dismissed by the High Court vide its common order dated 2.12.2006, which are the subject matters of these appeals.

2. M/s Sasikala Enterprises was formed as a partnership firm by a deed dated 06.02.1989 with N. Sasikala and T.V. Dinakaran as its partners, which was later reconstituted with effect from 04.05.1990 with J. Jayalalitha and N. Sasikala as partners. The firm did the business through two units, namely, M/s Fax Universal and M/s J.S. Plan Printers, which, inter alia, included the business in running all kinds of motor cars, dealing in vehicles and goods etc. In the complaint E.O.C.C. No.202 of 1997 filed before the Chief Metropolitan Magistrate, Egmore, M/s Sasi Enterprises was shown as the first accused (A-1) and J. Jayalalitha and N. Sasikala were shown as (A-2) and (A-3) respectively, who were stated to be responsible for the day- to-day business of the firm during the assessment years in question and were individually, jointly and severally made responsible and liable for all the activities of the firm. Partnership deed dated 04.05.1990 itself stated that the partners, A-2 and A-3 are responsible and empowered to operate bank accounts, have full and equal rights in the management of the firm in its business activities, deploy funds for the business of the firm, appoint staff, watchman etc. and to represent the firm before income tax, sales tax and other authorities.

3. M/s Sasi Enterprises, the firm, did not file any returns for the assessment year 1991-92 and 1992-93, for which the firm and its partners are being prosecuted under Section 276 CC of the Act. J. Jayalalitha and N. Sasikala did not file returns for the assessment year 1993-94 and hence they are being prosecuted for that breach (in their individual capacity) separately but not for the assessment years 1991-92 or 1992-93 and their returns have been filed as individual assessee by them for the assessment years 1991-92 and 1992-93, though belatedly on 20.11.1994 and 23.02.1994 respectively. In those returns it was mentioned that accounts of the firm had not been finalized and no returns of the firm had been filed.

4. The Assistant Commissioner of Income Tax in his complaint stated that the firm through its partners ought to have filed its returns under Section 139(1) of the Act for the assessment year 1991-92 on or before 31st August, 1991 and for the assessment year 1992-93 on or before 31st August, 1992 and A-2 in her individual capacity also should have filed her return for the year 1993-94 under Section 139(1) on or before 31.08.1993 and A-3 also ought to have filed her return for the assessment year 1993-94 on or before 31st August, 1993, as per Section 139(1)