The Madras High Court refused to quash the proceedings under section 276CC of the Income Tax Act on the offence of a huge amount of income concealment while filing an Income Tax Return(ITR).
The respondent complained of the offences under Section 276CC of the Income Tax Act, 1961 for non-filing of the income tax return for the assessment year 2012-2013. The crux of the complaint is that the accused is an assessee on the file of the respondent. During the search on 03.09.2013, it was detected that the accused did not file his return of income for the assessment year 2012-2013. Therefore, he was issued a notice under Section 153A of the Income Tax Act dated 29.04.2014 to file a return of income tax within 30 days from the date of the said notice.
R.P. Darrmalingam, the petitioner did not file his return of income within 30 days but filed belatedly on 20.11.2015 by admitting the total income of Rs.2,29,92,150/-. Therefore, the accused was issued a show cause notice to show reason for not initiating prosecution. On receipt of the same, the accused replied that the delay was due to books of accounts and other materials seized by the Income Tax Department. It is difficult for the accused to collect details about 18 assessees in the group. He is an aged person and suffers from hypertension and diabetes. Therefore, he was unable to file his return of income.
It was argued that the allegations made in the complaint neither make out any case against the petitioner nor disclose the ingredients of an offence under Section 276CC of the Income Tax Act against the petitioner. The trial court had taken cognizance without application of mind and it is against the provisions under Section 153A and 276CC of Income Tax Act.
Even after receipt of the notice under Section 153A of the Income Tax Act, the petitioner could not able to file additional returns within the stipulated time of 30 days only for the reason he fell ill. The additional return filed by the petitioner was duly accepted and the order has been passed under Section 143(3) of the Income Tax Act. Therefore, there is no men’s rea for non-filing of income tax returns for the assessment year 2012-2013.
Further argued that the complaint itself is barred by limitation as contemplated under Section 468 of Cr.P.C. The complaint was filed after three years from the date of the alleged occurrence and the complaint itself is barred by limitation.
The petitioner is an income tax assessee. A search was conducted on 03.09.2013. In the search, it was found that the petitioner had several transactions which were not reported by him to indulge in large-scale tax evasion. The petitioner had purchased an immovable property for the value of Rs.2,50,00,000/-.
It was found that the petitioner wilfully concealed the purchase of property and he did not disclose the true and real income in returns. There is an infraction of Section 139(1) and Section 153 of the Income Tax Act.
A single bench of Justice G K Ilanthiraiyan observed that the benefit of voluntary compliance by way of belated returns would have arisen if the petitioner disclosed the true and real income under Section 139(4) of the Income Tax Act. Therefore, he is liable to be punished under Section 276CC of the Income Tax Act.
Therefore, the provision makes it punishable under Section 276CC for non-filing of return within the stipulated time and wilfully concealing its true and correct income under Section 276C(1) and the petitioner cannot seek the indulgence of this Court to quash the entire proceedings.
Further, in a prosecution for the offence under Section 276C of the Income Tax Act, there can be a presumption for the existence of mens rea and it is for the accused to prove the contrary and that too, beyond reasonable doubt during trial.
Therefore, the grounds raised by the petitioner can be considered only before the trial court during the trial since the subsequent act of offering additional income payment after search and after detection is not voluntary compliance and it was only during such proceedings it came to light that the petitioner attempted to evade the taxes and interest.
The Court held that the prosecution was examined before the trial court. Therefore, all the grounds raised by the petitioner can be agitated before the trial court to rebut the presumption. The Court refused to quash criminal proceedings and dismissed the petition.
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