Crl Op/31907/2019 Of Shri Sardarmal Kothari v. The Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 06.03.2020CORAM: CRL.O.P.No.31907 of 2019 andCrl.M.P.Nos.17506 & 17508 of 2019 Shri Sardarmal Kothari... Petitioner/Accused The Deputy Commissioner of Income Tax,Central Circle-1(1),Room No.320, 3[rd] Floor, Investigation Wing,No.46, M.G.Road, Chennai-34.... Respondent/Complainant PRAYER: Criminal Original Petition filed under Section 482 ofCr.P.C. praying to call for the entire records inE.O.C.No.578 of 2017, on the file of Additional ChiefMetropolitan Magisterate (Economic Offences), Egmore,Chennai and quash the same.For Petitioner : Mr.A.SelvendranFor Respondent: Mrs.Sheela, Special Public Prosecutor This petition has been filed challenging the criminalproceedings in E.O.C.No.578 of 2017 on the file of theAdditionalChiefMetropolitanMagistrate(EconomicOffences), Egmore, Chennai. 2.The respondent filed private complaint for theoffences under Section 276 (c ) (c) of the Income Tax Act,1961 alleging that the petitioner is an assessee on thefile of the Deputy Commissioner of Income Tax, CentralCircle, Chennai. A search has been conducted under Section132 of Income Tax Act on 18.12.2012 and during the search,it was noticed that the accused did not file his return of https://hcservices.ecourts.gov.in/hcservices/ income for the assessment year 2013-2014 as required underSection 139 (1) of the Income Act. He ought to have filedreturn of income on or before 05.08.2013. But he belatedlyfiled his return of income for the assessment year 2013-2014 only on 31.01.2014 admitting his entire income ofRs.10,71,76,445/- The accused has filed his return ofincome belatedly after the expiry of the time limitprescribed under Section 139(1) of IT Act as such therespondent issued show cause notice on 17.07.2017. 3.The learned counsel for the petitioner contendedthat when the petitioner filed his return of income andpaid the entire demand made by the respondent, he is notliable to be punished under Section 276 (c ) (2) of IncomeTax Act. 4.Heard, Mr.A.Selvendran, the learned counsel forthe petitioner and Mrs.Sheela, Special Public Prosecutorappearing for the respondent. 5.On perusal of the documents, it is seen that thelast date for filing the returns for the financial year2012-2013 was on or before 05.08.2013. The respondent didnot hand over the book of accounts seized from thepetitioner on till 05.08.2013. Therefore, there is delayin payment of income tax and the petitioner filed return ofincome on 31.01.2014. Thereafter, it was returned on31.03.2015 directing the petitioner to pay a sum ofRs.4,27,44,486/-. Thereafter, the petitioner paid tax asdemanded by the respondent on 13.03.2018, for which therespondent also issued a letter on 14.03.2018 acknowledgingthe receipt of tax. It is relevant to extract the provisionunder Section 276 (c ) (2) of the Income Tax Act, 1995 asfollows: “If a person wilfully attempts in any mannerwhatsoever to evade the payment of any tax,penalty or interest under this Act, he shall,without prejudice to any penalty that may beimposable on him under any other provision ofthis Act, be punishable with rigorousimprisonment for a term which shall not be lessthan three months but which may extend to threeyears and shall, in the discretion of the court,also be liable to fine. Explanation – For thepurpose of this section, a wilful attempt toevade any tax, penalty or interest chargeable or imposable under this Act or the payment thereofshall include a case where any person- (i)has in his possession or control any booksof account or other documents (being booksof account or other documents relevant toany proceeding under this Act) containing afalse entry or statement; or (ii) makes or causes to be made any falseentry or statement in such books of accountsor other documents; or imposable under this Act or the payment thereofshall include a case where any person- (i)has in his possession or control any booksof account or other documents (being booksof account or other documents relevant toany proceeding under this Act) containing afalse entry or statement; or (ii) makes or causes to be made any falseentry or statement in such books of accountsor other documents; or (iii)wilfully omits or causes to be omittedany relevant entry or statement in suchbooks of account or other documents; or (iv) causes any other circumstance to existwhich will have the effect of enabling suchperson to evade any tax, penalty or interestchargeable or imposable under this Act orthe payment thereof” 6.From the reading of the above provision to punishthe accused, there must be wilful attempt to evade paymentof tax, he must be in possession of the book with falseentries, the person should have made false entries in thebook of accounts and omitting any entry in the statement ofaccounts. The petitioner voluntarily disclosed theundisclosed income to the respondent on the inspectionconducted under Section 132 of the Income tax Act, 1961 on18.12.2012. Therefore, there is no intention from thepetitioner for willful evading of payment of tax.Admittedly, the respondent on the inspection dated18.12.2012, had seized the relevant book of accounts and assuch the petitioner could not able to file the return ofincome on or before 05.08.2013. Therefore, the petitionerhad no wilful intention to evade tax as alleged by therespondent. 7.That apart, the petitioner had paid the entire taxamount on 13.03.2018 and the respondent had alsoacknowledged the same by the acknowledgment dated14.03.2018. Therefore, the offence under Section 276 (c )(2) of the Income Tax Act is not at all attracted asagainst the petitioner herein, and the entire criminal proceedings pending against the petitioner is nothing butclear abuse of process of law. As such it cannot besustained as against the petitioner and it is liable to bequashed. 8.In view of the above discussion, this criminaloriginal petition is allowed. Accordingly, the entireproceedings in E.O.C.No.578 of 2017 on the file ofAdditionalChiefMetropolitanMagistrate(EconomicOffences), Egmore, Chennai is quashed. Consequently,connected miscellaneous petitions are closed. -s/d- Assistant Registrar //True Copy// Sub-Assistant RegistrarlokTo1. The Deputy Commissioner of Income Tax, Central Circle-1(1), Room No.320, 3[rd] Floor, Investigation Wing, No.46, M.G.Road, Chennai-342. The Public Prosecutor, High Court, Madras.CRL.O.P.No.31907 of 2019 SR(co)SMN(27/05/2020)