Facts of the Case

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

The dispute arose out of alleged non-compliance with statutory requirements under Section 139(1) of the Income Tax Act, 1961, specifically relating to filing of income tax returns.

During the pendency of the petitions, it was indicated that an appellate order passed by the Commissioner of Income Tax (Appeals) dated 18.05.2018 had not yet attained finality. The petitioners intended to reserve their rights to challenge issues depending on the outcome of the appellate proceedings.

Issues Involved

  1. Whether the alleged default in compliance with Section 139(1) of the Income Tax Act was wilful or not.
  2. Whether criminal proceedings should continue during the pendency or non-finality of appellate proceedings before the Commissioner of Income Tax (Appeals).
  3. Whether petitioners should be permitted to withdraw petitions with liberty to raise defenses before the trial court and re-approach the High Court later.

Petitioner’s Arguments

  • The petitioners sought permission to withdraw the petitions along with all pending applications.
  • They requested that their defences be preserved, particularly for individual petitioners Shivani Mittal and Venkatramaraju Nadempali.
  • It was argued that the issue of wilfulness of default under Section 139(1) should be adjudicated after the appellate order becomes final.
  • They sought liberty to approach the High Court again depending on the outcome of the appellate proceedings.

Respondent’s Arguments

  • The respondent (Income Tax Department) was represented through standing counsel.
  • While detailed counter-arguments are not recorded in the order, the department opposed the petitions in the context of ongoing criminal proceedings for statutory non-compliance.

Court Order / Findings

  • The Delhi High Court allowed the withdrawal of all the petitions.
  • The Court held that:
    • The petitions are dismissed as withdrawn.
    • The defences of Shivani Mittal and Venkatramaraju Nadempali are preserved and may be raised before the competent criminal court.
    • The petitioners are granted liberty to approach the High Court again, particularly on the question of whether the default under Section 139(1) was wilful, after the appellate proceedings attain finality.

Important Clarification

  • Withdrawal of petitions does not bar future legal remedies.
  • The Court explicitly preserved:
    • Right to raise defences before the trial court
    • Right to re-approach the High Court
  • The determination of “wilfulness” under Section 139(1) remains open and subject to future adjudication.

Sections Involved

  • Section 139(1), Income Tax Act, 1961 – Filing of return of income
  • Criminal proceedings relating to alleged non-compliance of statutory obligations under the Income Tax Act.

Link to download the order -

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

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