Facts of the Case

The respondent (Income Tax Department) filed a criminal complaint against the petitioners for failure to file Income Tax Return (ITR) within the prescribed time for Assessment Year 2012–13. The Metropolitan Magistrate took cognizance under Section 276CC read with Section 278B of the Income Tax Act and issued summons.

The petitioners filed the ITR belatedly on 19.03.2014, claiming that there was no tax liability and instead a refund was due. However, they had failed to comply with the statutory deadline under Section 139(1) and also failed to respond to a notice issued under Section 142(1).

Penalty had already been imposed under Section 271(1)(b) for non-compliance with the notice.

Issues Involved

  1. Whether delayed filing of ITR within the extended period under Section 139(4) protects the assessee from prosecution under Section 276CC.
  2. Whether failure to comply with notice under Section 142(1) constitutes a separate and independent offence.
  3. Whether the criminal proceedings amount to abuse of process of law.

Petitioner’s Arguments

  • The petitioners contended that the ITR was filed within the permissible extended period under Section 139(4), hence prosecution under Section 276CC was not justified.
  • It was argued that since there was no tax liability and instead a refund was due, criminal prosecution was unwarranted.
  • The proceedings were alleged to be an abuse of process of law.

Respondent’s Arguments

  • The respondent argued that the petitioners failed to file the return within the due date prescribed under Section 139(1).
  • Despite issuance of notice under Section 142(1), the petitioners did not comply within the stipulated time.
  • Such non-compliance constitutes a distinct offence under Section 276CC, irrespective of later filing of return. 

Court Findings / Order

The Delhi High Court dismissed the petition and upheld the prosecution.

  • The Court held that failure to file ITR within the prescribed time under Section 139(1) constitutes an offence under Section 276CC.
  • It further held that non-compliance with notice under Section 142(1) is a separate and independent offence.
  • Filing of return at a later stage does not extinguish criminal liability once default has occurred.
  • The Court found no abuse of process of law and upheld the summoning order.

Important Clarifications

  • The benefit of delayed filing under Section 139(4) is limited and does not automatically shield an assessee from prosecution once default is detected.
  • The proviso to Section 276CC applies only in limited circumstances, particularly where returns are filed voluntarily before detection.
  • Once notice under Section 142(1) is issued and ignored, prosecution becomes sustainable.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:7459/RKG26112018CRLMM2392015.pdf

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