The Karnataka High Court rejected to quash the prosecution started via the income tax department against the taxpayer who has intently failed to file his income tax return (ITR) within the said time for the Assessment years 2012- 13 to 2015-16 and thereby committed the alleged offence.
A single judge, Justice S Vishwajith Shetty dismissed the petitions submitted via Rajkumar Agarwal. It expressed, “Delay in filing of the income tax returns would not only result in payment of the penalty, but it also results in prosecution as provided under Chapter 22 of the Act. Therefore, merely for the reason that the petitioner has paid the penalty levied by the Competent Authority for the delay in filing of the returns, the same does not exonerate the petitioner from being prosecuted.”
Four separate private complaints have been filed by the department against the applicant for an offence punishable under section 276CC of the Income Tax Act, after getting the necessary sanction orders from the Competent Authority to prosecute.
It was alleged that the applicant had intentionally failed to provide his ITRs at the said time for the Assessment Years 2012- 13 to 2015-16 and thereby committed the alleged offence.
It was claimed by the applicant that on receipt of the notice under section 139 of the act, he furnished his income tax returns. As there was a delay in return filing a penalty was imposed which was filed via him. Hence no event was there for the respondent department to start the criminal prosecution against him for the alleged offence.
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It was asserted that he was not allotted a chance via the competent authority to issue the sanction order. Also, he did not deliberately delay in returns filing and the delay was not under the control of the applicant as his brothers had died.
It was furnished by the department that just for the reason that the applicant has furnished ITR it shall not exonerate him from criminal prosecution. There is an assumption against the applicant available u/s 278E of the Act, which needs to be denied via the applicant as per the statute before the related Magistrate.
The bench observed that Section 276CC is drawn on failure to comply with the provisions of Section 139(1) or failure to reply to the notice issued under Section 142 or Section 148 of the Act, within the time established therein.
Afterwards, it said that the proviso to Section 276 CC carries in only sub-section 1 of Section 139 of the Act and the provisions of Section 142(1)(i) or Section 148 are conspicuously missing. The benefit of the proviso is available exclusively for voluntary filing of the return as directed u/s 139(1) of the Act.
In other words, it cited that the proviso shall not be applicable post detection of the failure to submit the return and post a notice under Section 142(1)(i) or Section 148 of the Act, is issued asking to submit the return of the income.
It was observed by the court that u/s 278E of the Act, a negative presumption was there and it is for the accused taxpayer to rebut successfully the mentioned presumption via producing the essential material before the said court, failing which he would be obligated to be punished.
The court carried “Under the circumstances, the explanation sought to be offered on behalf of the petitioner before this Court cannot be accepted and it is for the petitioner to lead evidence and produce necessary material before the learned Magistrate in support of his defence and rebut the presumption available against him under Section 278E of the Act.”
As per that, “Delay in the filing of the income tax returns would not only result in payment of the penalty, but it also results in prosecution as provided under Chapter 22 of the Act. Therefore, merely for the reason that the petitioner has paid the penalty levied by the Competent Authority for the delay in filing of the returns, the same does not exonerate the petitioner from being prosecuted.” it dismissed the petitions.
| Case Title | Rajkumar Agarwal vs. Income Tax Department |
| Citation | CRIMINAL PETITION NO. 201214 OF 2023 (482(Cr.PC)/528(BNSS)) C/W CRIMINAL PETITION NO. 201213 OF 2023 CRIMINAL PETITION NO. 201215 OF 2023 CRIMINAL PETITION NO. 201216 OF 2023 |
| Date | 16.01.2025 |
| Petitioner | Advocate Kadloor Satyanarayanacharya |
| Respondent | Advocate M Thirumalesh |
| Karnataka High Court | Read Order |
