Filing ITR after Due Date still Constitutes Offence u/s 276CC, Even before Prosecution: Supreme Court [Read Judgement]

The Supreme Court has ruled that filing an Income Tax Return ( ITR ) after the due date but before prosecution does not eliminate liability for offenses under Section 276CC of the Income Tax Act, 1961.

Vinubhai Mohanlal Dobaria, the appellant, challenged a Gujarat High Court judgment that upheld the Chief Commissioner of Income Tax's rejection of his compounding application. The High Court ruled that the appellant’s belated filing did not qualify for compounding under the 2014 CBDT guidelines, as it was not his "first offense".

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The assessee failed to file his tax returns on time for AY 2011-12 and AY 2013-14. He later voluntarily filed belated returns but was issued a show-cause notice under Section 276CC for AY 2011-12 on 27.10.2014. The self-assessment tax payable was nil, and he applied for compounding under the 2008 guidelines, which was granted on 11.11.2014.

On 12.03.2015, another show-cause notice was issued for AY 2013-14. The self-assessment tax payable for that year was Rs. 2,78,749. The appellant filed a compounding application under the 2014 guidelines, stating that he lacked funds and that the delay was neither deliberate nor willful.

The tax department rejected the application, stating that the return for AY 2013-14 was filed after a show-cause notice for AY 2011-12 was issued, meaning it could not be treated as a "first offense" under the 2014 compounding guidelines. The Gujarat High Court agreed with this interpretation and dismissed the appellant’s challenge.

A bench comprising Justice J.B. Pardiwala and Justice Sanjay Karol held that an offense under Section 276CC is committed immediately after the due date for filing the return under Section 139(1) is missed.

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The court clarified that filing the return under Section 139(4) later, or even before prosecution starts, does not alter the fact that the offense occurred on the day following the due date. After reviewing the statutory provisions and the CBDT guidelines for compounding, the court held that the High Court erred in rejecting the appellant’s claim that AY 2013-14 was his "first offense."

The court clarified that the offense under Section 276CC is committed the day after the due date for filing the return expires, not on the date of belated filing. Since the offense for AY 2013-14 (committed on 01.11.2013) occurred before the show-cause notice for AY 2011-12 was issued (27.10.2014), both offenses should have been treated as a "first offense." The appeal was disposed.

To Read the full text of the Order CLICK HERE

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