Facts of the Case

The petitioners, M/s Infonox Software Pvt. Ltd. and others, filed multiple criminal miscellaneous petitions before the Delhi High Court challenging proceedings initiated by the Deputy Commissioner of Income Tax.

During the course of hearing, after some arguments, counsel for the petitioners sought permission to withdraw the petitions while reserving specific contentions for certain petitioners, namely Shivani Mittal and Venkatramaraju Nadempali.

The petitioners intended to raise these contentions as defenses before the concerned Criminal Court and also sought liberty to re-approach the High Court after final adjudication of the appeal pending before the Commissioner of Income Tax (Appeals).

Issues Involved

  1. Whether the petitioners should be permitted to withdraw the criminal petitions with liberty to raise defenses before the trial court.
  2. Whether the issue of default in compliance with Section 139(1) of the Income Tax Act being “wilful” or not can be examined at a later stage after appellate proceedings attain finality.

Petitioner’s Arguments

  • The petitioners sought withdrawal of the petitions with liberty to pursue their defenses before the Criminal Court.
  • It was contended that the issue regarding alleged default under Section 139(1) being wilful or not should be reconsidered after the decision of the Commissioner of Income Tax (Appeals) becomes final.
  • Reservation of rights was specifically sought for individual petitioners to raise all permissible defenses during trial.

Respondent’s Arguments

  • The respondent, represented by the Deputy Commissioner of Income Tax, opposed the petitions in line with enforcement of statutory compliance under the Income Tax Act.
  • The prosecution was based on alleged failure to comply with mandatory filing requirements under Section 139(1).

Court’s Findings / Order

  • The Delhi High Court permitted withdrawal of the petitions.
  • The petitions were dismissed as withdrawn.
  • The Court expressly reserved the right of the petitioners (Shivani Mittal and Venkatramaraju Nadempali) to raise their defenses before the concerned Criminal Court.
  • Liberty was granted to the petitioners to approach the High Court again on the issue of wilfulness of default under Section 139(1) after the appellate decision attains finality.

Important Clarification

  • Withdrawal of petitions does not amount to adjudication on merits.
  • The question of whether non-compliance with Section 139(1) is wilful or not remains open.
  • Petitioners retain the right to:
    • Raise defenses before the trial court
    • Re-approach the High Court after appellate proceedings conclude

Sections Involved

  • Section 139(1) of the Income Tax Act, 1961
  • Relevant provisions relating to criminal prosecution for non-compliance under the Income Tax Act

Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2019:DHC:7499/RKG07032019CRLMM37242018_125831.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.