C.p.yogeshwara v. The Income Tax Department Dated04.01.2017

IN THR HIGH COURT OF KARNATAKA AT BENGALURU DATEKRD THIS THE [th]DAY OF JANUARY, 2017| BEFORE| THE HON’BLE MR. JUSTICE ANAND BYRAREDDY| CRIMINAL PETITION NO.1449 OF 2016 Between:orl H Nagaraja,»/o Hanumanthappa,Aged 43 years,Residing at No.6 and 7,“Sri Ganesh Krupa’,New Bank Colony,Konanakunte,Bengaluru — 560 OO2. _. Petitioner (By ShriM V Sheshachala, Senior Advocate forShri Aravind V Chavan, Advocate) And: Income Tax Department,By Deputy Commissioner of|Income Tax,Central Tax, Central Circle — 2(2),C R Building, Queens Road,Bengaluru — 560 OO1. ... Respondent. (By Shri. Jeevan Neeralgi, Advocate) This Criminal Petition is filed under Section 482 ot|Cr.P.C. praying to quash the proceedings taking cognizanceof the offences p/u/s 276CC of the I.T. Act registered inC.C.No.17/2015 before the Spl. Court (Economic Offences),Bangalore for delay in filing the return of income by 106days. This Petition coming on for admission this day, the|Court made the following:-_ ORD ER Heard the learned Senior Advocate Shri M VIoheshachala appearing for the counsel for the petitioner. |The facts leading up to this petition are as follows: 2 |The petitioner has filed his return of income forthe assessment year 2008-2009 for the accounting period01.03.2007 to 31.03.2008. The last date to file the returnwas 30.10.2008, in terms of Section 139(1) of the IncomeTax, 1961 (Hereinafter referred to as the ‘TT Act’, forbrevity). It transpires that a search had been conducted interms of Section 132(1) of the IT Act on the premises of the|assessee, on 06.01.2009. Thereafter a notice had been.issued on 8.3.2010, under Section 153-A of the IT Act| calling upon the petitioner to file the return of incomewithin 30 days. It was not filed within time, but it was filedon 18.6.2010, after a delay of 71 days, incorrectly shown as106 days in the complaint filed by the respondent. The,reason for such belated filing, according to the petitioner,|was that documents which had been seized by thedepartment were not returned promptly and they were|returned only after much delay and this in turn lead to a|delay in the petitioner filing his returns. Thereafter on|28.12.2010 the Department, acting upon the belated|returns filed, had passed an Assessment Order under|section 143(3) read with Section 153-A of the IT Act. —Thereatter on 18.12.2014 a Sanction was issued in terms of section 279(1) of the Act and on 29.01.2015 a complaint|was filed under Section YOO of the Code of CriminalProcedure, 1973, before the Special Court for Economic|Offences alleging offences punishable under Section 276CCof the IT Act. The Magistrate having taken cognizance on | 16.02.2015 and having issued process, the petitioner isbefore this Court. 3.|Incidentally it is also pointed out by the learnedsenior Advocate that, parallely on 12.04.2011 there hadbeen a second search conducted on the premises of anemployee of the assessee, one Adlene Kagoo, and a noticehad been issued pursuant thereto on 29.03.2012 undersection 148 of the Income Tax Act calling upon thepetitioner to file a fresh return, as the assessment stoodreopened. On 10.12.2012 the assessee had issued a lettercalling upon the Department to accept the return of incomealready filed on 18.06.2010, in response to the said notice. |It is pursuant to this that a Re-Assessment Order waspassed on 13.03.2013 under Section 143(3) read withsection 14/7 of the Act. Therefore, the return filed wasaccepted and the amount reflected in the Assessment Orderdated 28.12.2010 was included. These subsequent eventsin so far as the second search of the premises of an employee of the petitioner and the further orders passedhad not been taken into account while issuing the initialnotice against the petitioner and the Sanction Order havingbeen obtained without reference to the parallel proceedingsand a complaint also having been filed ignoring the saidevents, it is stated, would vitiate the proceedings. employee of the petitioner and the further orders passedhad not been taken into account while issuing the initialnotice against the petitioner and the Sanction Order havingbeen obtained without reference to the parallel proceedingsand a complaint also having been filed ignoring the saidevents, it is stated, would vitiate the proceedings. 4Apart from the fact that belated return filed andwhich has been accepted as aforesaid would take away theillegality if any in not having complied with the rigour of thelaw and therefore the prosecution is an exercise in futilityfor the Department having accepted the return could notthen turn around and claim that the Assessment has notbeen filed or has been filed belatedly and has been ignored. |When that is not the case, the prosecution sought to bebrought against the petitioner would fail on that account aswell and it is this aspect which is emphasized. Reliance isplaced on an earlier order of this Court passed in a similarcircumstance in Crl.P.No.1998/2016 in the case of C.P.Yogeshwara vs. The Income Tax Department dated04.01.2017.. 5 |The learned counsel for the respondent, SriJeevan Neeralgi would make a weak attempt to sustain theproceedings. However, on the reasoning as put forth by thelearned Senior Advocate it cannot be said that theDepartment is justified in acting upon the belated returnsfiled and also to claim that there has been default in filingthe returns. This would be a contradiction in terms.Consequently, the petition is allowed. The prosecutioninitiated against the petitioner in terms of Section 276 CCof the Income Tax Act cannot be sustained. The entireproceedings in case C.C. No.17/2015 on the file of SpecialCourt for Economic Offences, Bengaluru stands quashed. ykl Sd/-.ple J