In a major set back to tollywood actor Mr. S J Surya, the Madras High Court has upheld the criminal charges for non-filing of income tax returns and non-payment of advance tax by observing that the order of Income Tax Appellate Tribunal (ITAT) quashing re-assessment orders on ground of barred by limitation.
Petitioner/accused is a cine actor and Director deriving income from remuneration for acting in movies and also directing movies. He ought to have filed his return of income for the assessment year 2002-2003 on or before 31.07.2002. a criminal complaint was registered against the actor under Section 276 CC of Income Tax Act, 1961as he did not filed his return of income within the due date prescribed by the statute and thus contravened the provisions of Section 139 (1) of the Income Tax Act, 1961 various other charges including non-payment of advance tax for various years.
Before the High Court, the petitioner contended that the complaint is pre-mature, when the proceedings before the department are yet to conclude and reach finality. It was also contended that the assessment order passed by the Assessing Officer, confirmed by the CIT (A) have been set aside by the Income Tax Appellate Tribunal declaring the Assessment orders as null and void.
Upholding the criminal charges, Justice G.Chandrasekharan clarified that pendency of re-assessment proceedings are remanding matter for adequate opportunity and that adjudication by Tribunal through adjudication proceedings are not a bar for launching a criminal prosecution.
“Even if the adjudication proceedings ended in favour of assessee, it can be taken in favour of assessee only if the adjudication proceedings discussed all the issues raised in the complaint on merits and gave its findings. If the adjudication proceedings were disposed on technical ground and not on merits, prosecution can continue and assessee/accused cannot take advantage of the order passed in adjudication proceedings,” the Court said.
The Court further added that “it is seen from the complaint allegation that despite, giving notice, statutory notice as detailed in the complaint, petitioner has not filed return, paid advance tax and tax demanded, suppressed the real and true income by not filing the return in time. These issues have to be necessarily tried before the Court. The assessment order relating to the assessment year 2009-2010 was not challenged before the Income Tax Appellate Tribunal. Therefore, petitioner cannot seek aid of order passed by the Income Tax Appellate Tribunal in I.T.A.Nos.1858 to 1862/Mds/2014. In this case also there is allegation of non filing of return of income for the assessment year 2009- 2010, concealment of true and correct income by not filing return of income, non payment of income despite issuance of notice. These violations are liable to be prosecuted for the offences under Section 276 C (1), 276 C (2), 276 CC and 277 of the Income Tax Act, 1961.”
While concluding, the Court added that “When it comes to quashing a criminal proceedings, it is very well settled that uncontroverted averments in the complaint without any addition or subtraction should be looked into to examine whether an offence can be made out are not. If that yardstick is applied in this case, this Court is of the considered view that respondent/complainant made out prima-facie case to proceed against the petitioner for the offences alleged in the complaint. Section 278 (e) of the Income Tax Act, 1961, empowers the Court to presume culpable mental state of the accused, unless, the accused shows that he had no such mental state with respect to the act charged as an offence in the prosecution. In this view of the matter, this Court finds that petitioner shall necessarily face the trial”
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