Facts of the Case

The petitioner (assessee) failed to file income tax returns for Assessment Years 2003–04, 2004–05, and 2005–06 within the prescribed time under Section 139(1) of the Income Tax Act. Despite issuance of statutory notices under Sections 142(1) and 148, the petitioner did not comply.

Consequently, criminal complaints were filed for offences under Section 276CC for failure to furnish returns. The trial court took cognizance and ordered framing of charges.

The accused challenged the orders through revision petitions. The revisional court:

  • Upheld charges for AY 2004–05 and 2005–06
  • Discharged the accused for AY 2003–04

Both parties approached the High Court under Section 482 Cr.P.C. challenging the revisional court’s orders.

Issues Involved

  1. Whether prosecution under Section 276CC can be sustained despite pendency of assessment proceedings.
  2. Whether failure to file returns within prescribed time constitutes an independent offence.
  3. Whether subsequent notices without a time limit can invalidate earlier statutory non-compliance.
  4. Whether second revision disguised under Section 482 Cr.P.C. is maintainable.

Petitioner’s Arguments

  • No tax liability existed; rather refunds were due for AY 2004–05 and 2005–06.
  • Reply to show cause notices was not properly considered.
  • For AY 2003–04, a subsequent notice under Section 142(1) did not specify a compliance date, hence no offence could arise.
  • Prosecution should not continue when assessment proceedings were pending.

Respondent’s Arguments

  • Failure to file returns within statutory time itself constitutes an offence under Section 276CC.
  • Notices under Sections 142(1) and 148 were duly issued and not complied with.
  • Pendency of assessment proceedings does not bar criminal prosecution.
  • Subsequent notice does not nullify earlier default or statutory liability.

Court’s Findings / Order

  • The offence under Section 276CC is complete upon failure to file return within the prescribed time.
  • Assessment proceedings and criminal prosecution are independent of each other.
  • Even if tax payable is nil or refundable, prosecution is not barred.
  • Disobedience of Sections 139(1), 142(1), and 148 constitutes distinct offences.
  • The revisional court erred in discharging the accused for AY 2003–04.

Important Clarifications by the Court

  • Filing of return after delay does not erase criminal liability already incurred.
  • Subsequent notices cannot grant indefinite time or override earlier statutory defaults.
  • The proviso to Section 276CC provides limited protection and does not negate the offence itself.
  • Section 278E presumption of culpable mental state applies in such prosecutions.
  • Section 482 Cr.P.C. cannot be used as a substitute for a second revision unless exceptional circumstances exist.

Sections Involved

  • Section 139(1), Income Tax Act, 1961
  • Section 142(1), Income Tax Act, 1961
  • Section 148, Income Tax Act, 1961
  • Section 276CC, Income Tax Act, 1961
  • Section 278E, Income Tax Act, 1961
  • Section 482 Cr.P.C.
  • Section 397(3) Cr.P.C.

Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:6008/RKG14092018CRLMM33852016.pdf

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