The Madras High Court while quashing the proceedings alleging willful default in filing ITR held that it is the Department’s Duty to verify and issue PAN cards.
The accused, Sudhir Kumar Hasija has not filed Income Tax return for the Assessment year 2013-14 and despite the show- cause notice calling upon the petitioner to appear in person was issued, the petitioner neither appeared before the respondent nor sent any reply and hence, the petitioner has committed willful and deliberate default to furnish his return of income in due time as contemplated under Section 139(1) of the Income Tax Act, which is punishable under Section 276CC of the Income Tax.
The petitioner contended that the prosecution itself has been launched under the wrong premise that the petitioner has not filed his return, but the fact remains that the petitioner was issued with two Pan cards. As far as the second Pan card, which is subject matter of prosecution is concerned, he has not transacted anything and he has already surrendered the said pan card and also obtained an acknowledgment from the Income Tax Authorities. The petitioner has filed an income tax return without any default including the Income Tax returns for the Assessment year 2013-14. Hence, it is submitted that when the petitioner has already paid tax, merely because there are two pan numbers allotted to the petitioner, he cannot be prosecuted.
The single bench of Justice N.Sathish Kumar held that though applying for two PAN cards may not be correct, the fact remains that it is the duty of the Department to verify and issue PAN cards, which has not been done in this case. Be that as it may, a perusal of the records available on record reveals that the petitioner has been repeatedly making requests for surrender of the second PAN card and finally surrendered the same and also obtained acknowledgement.
“Now the prosecution has been launched on the premise that the petitioner has not even paid tax for the Assessment year 2013-14. This Court is of the view that when the petitioner has already surrendered the PAN card bearing No. bearing number ALIPS4185M, the question of initiating prosecution for wilful and deliberate default to furnish return of income tax does not arise and the continuation of prosecution as against the petitioner is a futile exercise and the same is liable to be quashed,” the court observed.Subscribe Taxscan AdFree to view the Judgment