HC: Offences U/S 276CC Against Assessees as Company’s ITR Filed But Not Individual

Towards the willful failure to file the ITR, during maintaining the conviction for an offence under Section 276CC of the Income Tax Act, 1961, a Mumbai court would state that a presumption of the culpable mental state from the taxpayer’s admission could have emerged who files the ITR of the company of which he would be the director unable to furnish his individual ITR.

The Court of Additional Sessions Judge, Dr A. A. Joglekar stated that the presence of men’s rea can be presumed and the same could be accused to prove the opposite while prosecuting the offence under Section 276CC of the Income Tax.

For the punishment Section 276CC of the Income Tax Act furnishes for the cases in which an individual willfully fails to file ITR within the stipulated time, which he would be needed to file under Section 139 (1) or in pursuance of the notice issued under Section 153A.

A notice under Section 153A of the Income Tax Act for furnishing the ITR for the pertinent accounting year within 30 days from the receipt of the notice is been issued to the taxpayer, Hema Chetan Shah.

A show cause notice was served on the accused post the person losses to furnish the return in the specified duration asking to execute the prosecution under Section 276CC of the Income Tax Act.

Towards the said show cause notice, an offence under Section 276CC read with Section 278E of the Income Tax Act was enrolled against him and prosecution for wilful failure to furnish an ITR was formed, as the accused, Hema Chetan Shah was lost to file the reply.

Through the court of additional Chief Metropolitan Magistrate, the accused was convicted of the offence, which renders him to give the fine. Before the Additional sessions Judge, through filing a plea the accused challenged the order.

The appellant before the sessions court stated he was prevented from furnishing the ITR as the pertinent files or papers were in the Income Tax Departments’ custody after the conduct of an investigation against the firm where the accused stood as a director. He contented, during furnishing the ITR no wilful default was done through the accused and hence there is no criminal liability that can be imposed on him.

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As per the case, the revenue heads would have provided a letter to the accused, the court considered that even the section 153A notice and the show cause notice asking to execute the prosecution being served on the accused under the Income tax act, providing the copies of the seized documents or statements would not be the precondition for the subject of the compliance of section 153A notice.

The court sees “Furthermore, the complainant agency as on 15.09.2016 again corresponded by letter (Exh.43) thereby providing such last and final opportunity to the accused to collect such photocopies of the seized documents by 23.09.2016,” A chance is being provided to the accused for collecting the pertinent documents in xerox form via the income tax heads the court articulated “Therefore, in this regard, undoubtedly the factum of wilful default is well propelled and the complainant agency has succeeded in proving their case beyond a reasonable doubt.” The accused lost to follow the notice despite the correspondence and affording the chance to accumulate the pertinent copies, it added.

The accused had acknowledged, in his capacity as the director of M/s. Decent Dia Jewels Pvt. Ltd., he had complied with furnishing the income tax return as observed by the sessions court in his cross-examination. The accused losses to follow the obligation for filing his ITR, the court stated that “This particular admission will naturally have a bearing upon the case wherein the accused on one hand has filed such returns pertaining to the company of which he is the director while has failed to comply with filing of such material Income Tax Returns, wherein the presumption as to the culpable mental state can be well derived and therefore, it can be clearly inferred that, the accused has committed, violated and transgressed the provision under Section 276CC read with Section 278E of the Income Tax Act.”

“The accused undoubtedly failed to comply with the notice under Section 153A and therefore, is an offender under Section 276CC also that in a prosecution of offence as in the instant case, it can be well presumed the existence of Men’s rea and it is for the accused to prove the contrary.” concluded by the Judge.

The appeal has been dismissed by the court while maintaining the Trial court’s order.