Crl.p/201214/2023 Of Rajkumar Agarwal v. Income Tax Department

Digitally signedby SHILPA RTENIHALLILocation: HIGHCOURT OFKARNATAKA NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER IN THE HIGH COURT OF KARNATAKA, | KALABURAGI BENCH DATED THLS THE 16 DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY| CRIMINAL PETITION NO, 201214 OF 2023(482(Cr.PC)/528(BNSS)) C/W CRIMINAL PETITION NO, 201213 OF 2023CRIMINAL PETITION NO, 201215 OF 2023CRIMINAL PETITION NO, 201216 OF 2023 IN CRL.P.NO.201214/2023: BETWEEN: RAJKUMAR AGARWAL S/O RAGHULAL AGARWAL,AGE: 65 YEARS, ~OCC: PROP. SAINATH STONE CRUSHERVILLAGE GADGI,|R/O. H NO 6-3-45, CHANDRA NIVAS,JAVAHAR BAZAR BIDAR-585401.| PETITIONER. (BY SRI KADLOOR SATYANARAYANACHARYA, ADVOCATE) AND: INCOME TAX DEPARTMENT,BY THE INCOME TAX OFFICER WARD-1,BIDAR-585401.| RESPONDENT (BY SRI M. THIRUMALESH, ADVOCATE) R NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER THIS CRL.P IS FILED U/S.482 OF CR.P.C. PRAYING TO.QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.2056/2019,.REGISTERED AS AGAINST THE ACCUSED / PETITIONER FOR)THE OFFENCE U/SEC. 276CC OF INCOME TAX ACT, PENDING.ON THE FILE OF THE II] ADDITIONAL CIVIL JUDGE AND JMFCBIDAR. IN CRL.P.NO.201213/2023: BETWEEN: RAJKUMAR AGARWAL S/O RAGHULAL AGARWAL,AGE: 65 YEARS, OCC:PROP. SAINATH STONECRUSHER VILLAGE GADGI,R/O. H NO 6-3-45 CHANDRA NIVAS,|JAVAHAR BAZAR BIDAR-585401.| PETITIONER| (BY SRI KADLOOR SATYANARAYANACHARYA, ADVOCATE) AND: INCOME TAX DEPARTMENT,BY THE INCOME TAX OFFICER WARD-1,BIDAR-58540 14(RPTD. BY ADDL. SPP HC KLB-585103. RESPONDENT (BY SRI M.THIRUMALESH, ADVOCATE) THIS CRL.P IS FILED U/S.482 OF CR.P.C. PRAYING TO.QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.2334/2019,.REGISTERED AS AGAINST THE ACCUSED / PETITIONER FOR-THE OFFENCE U/SEC. 276CC OF INCOME TAX ACT, PENDING.ON THE FILE OF THE II ADDITIONAL CIVIL JUDGE AND JMFC-IL BIDAR. NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER IN CRL.P.NO.201215/2023: BETWEEN: RAJKUMAR AGARWAL S/O RAGHULAL AGARWAL,AGE: 65 YEARS, OCC: SAINATH STONE CRUSHERVILLAGE GADGI, ©R/O. H NO 6-3-45 CHANDRA NIVAS,JAVAHAR BAZAR, BIDAR-5385401. PETITIONER| (BY SRI KADLOOR SATYANARAYANACHARYA, ADVOCATE) AND: INCOME TAX DEPARTMENT,BY THE INCOME TAX OFFICER WARD-1,BIDAR- 585401.(RPTD. BY ADDL. SPP HC KLB-585103.) RESPONDENT (BY SRI M. THIRUMALESH, ADVOCATE) THIS CRL.P IS FILED U/S.482 OF CR.P.C. PRAYING TO.QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.2333/2019,.REGISTERED AS AGAINST THE ACCUSED / PETITIONER FOR-THE OFFENCE U/SEC. 276CC OF INCOME TAX ACT, PENDING.ON THE FILE OF THE II ADDITIONAL CIVIL JUDGE AND JMFC-IL BIDAR. IN CRL.P.NO.201216/ 2023 BETWEEN: RAJKUMAR AGARWAL S/O RAGHULAL AGARWAL,AGE: 65 YEARS, OCC: PROP. SAINATH STONE|CRUSHER VILLAGE GADGI,R/O. H NO 6-3-45 CHANDRA NIVAS,|JAVAHAR BAZAR, BIDAR-5385401. PETITIONER| (BY SRI KADLOOR SATYANARAYANACHARYA, ADVOCATE) NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER AND: INCOME TAX DEPARTMENT, BY THE INCOME TAX OFFICER WARD-1,BIDAR-585401.| (RPTD. BY ADDL. SPP HC KLB-585103.) RESPONDENT (BY SRI M. THIRUMALESH, ADVOCATE) THIS CRL.P IS FILED U/S.482 OF CR.P.C. PRAYING TO.QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.2332/2019,.REGISTERED AS AGAINST THE ACCUSED / PETITIONER FOR-THE OFFENCE U/SEC. 276CC OF INCOME TAX ACT, PENDING.ON THE FILE OF THE II ADDITIONAL CIVIL JUDGE AND JMFC-IL BIDAR. THESE PETITIONS, COMING ON FOR ADMISSIONS, THIS—DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM:HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY| ORAL ORDER (PER: HON BLE MR. JUSTICE S.VISHWAJITH SHETTY) NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER AND: INCOME TAX DEPARTMENT, BY THE INCOME TAX OFFICER WARD-1,BIDAR-585401.| (RPTD. BY ADDL. SPP HC KLB-585103.) RESPONDENT (BY SRI M. THIRUMALESH, ADVOCATE) THIS CRL.P IS FILED U/S.482 OF CR.P.C. PRAYING TO.QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.2332/2019,.REGISTERED AS AGAINST THE ACCUSED / PETITIONER FOR-THE OFFENCE U/SEC. 276CC OF INCOME TAX ACT, PENDING.ON THE FILE OF THE II ADDITIONAL CIVIL JUDGE AND JMFC-IL BIDAR. THESE PETITIONS, COMING ON FOR ADMISSIONS, THIS—DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM:HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY| ORAL ORDER (PER: HON BLE MR. JUSTICE S.VISHWAJITH SHETTY) 1.Tnese petitions under section 482 of Cr.P.C are filed|by the petitioner-assessee assailing the impugned criminal proceedings pending before tne court of II Addl. CivilJudge&JMFC-ILI,BidarIn|C.C.No.2056/2019,|C.C.No.2334/2019,C.C.No0.2333/2019and|C.C.No.2332/2019 registered against the petitioner for NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER offence punishable under section 2/6CC of Income TaxAct. ? Heard the learned counsel for the petitioner and.learned counsel for the respondent-Department. 3.The respondent had filed four separate private|complaints under section 200 of Cr.P.C against thepetitioner herein for offence punishable under section.2/6CC of Income Tax Act 1961 (herein after referred to asthe “Act of 1961’), after obtaining necessary sanctionorders from the Competent Authority to prosecute thepetitioner for the aforesaid offence. Allegation against the.petitioner is that, he nad willfully failed to submit his.income tax returns In time for the Assessment Years 7201213 to 2015-16 and thereby committed the alleged offence. © 4The learned Magistrate, having taken cognizance of the alleged offence, had issued summons to the petitioner-accused. Being aggrieved by the same, the petitioner ispefore tnis court. - 6 - NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER 5.Learned counsel for the petitioner having reiterated|the grounds urged in the petition submits that, on receiptof notice under section 139 of the Act of 1961, petitionernad submitted nis income tax returns for the assessment.years 2012-13 to 2015-16. Since there was a delay infiling the returns, penalty was levied on the assesseewhich was paid by him. Therefore there was no occasionfor|tnerespondent-DepartmentCO Initiatecriminalprosecution as against the petitioner for the allegedoffence. He submits that petitioner was not granted anopportunity by the competent authority before issuing theSanction order. Petitioner had not willfully delayed thefiling of the returns and the delay was beyond the controlof the petitioner since his brothers had died during therelevant period. In support of nis arguments, he has.placed reliance on the judgment of this Court in the case.of|C.P Yogeshwara Vs the Income Tax Department|(Cri.P.No.1998/2016disposedOT ON)04.01.2017).Accordingly, he prays to allow the petition. - 7 - NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER - 7 - NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER 6.Per contra, learned counsel appearing for the.respondent has opposed the petition. He submits thatundisputedly there was a delay in filing the income taxreturns for the period from 2012-13 to 2015-16. Merely.for the reason that, the petitioner had submitted theincome tax returns, it will not exonerate him from criminalprosecution. There is a presumption against the petitioner.available under section 2/8E of the Income Tax act whichis required to be rebutted by the petitioner in accordancewith law before the learned Magistrate. Therefore, there isno illegality or irregularity in the impugned criminalproceedings. In support of his arguments, he has placed.reliance on the judgments of the Hon'ble Supreme Court in-the|CA SCOf|SasiEnterprises VS,AssistantCommissioner of Income Tax (2014) 361 ITR 163(SC)and also in the case of~V.P.Punj vs. AssistantCommissioner of Income Tax and Anotherreported in(2002) 253 ITR 369 (Delhi) NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER ] It is not in dispute that there was a delay on the part|of the petitioner assessee in submitting his income taxreturns for the assessment years 2012-13 to 2015-16. Itis not in dispute since there was a delay in submitting theincome tax returns, penalty was levied on the petitionerand the said penalty was paid by the petitioner. Theoffence under Section 2/6CC its attracted on failure tocomply with the provisions of Section 139(1) or failure torespond to the notice issued under Section 142 or Section148 of the Act, within the time specified therein. Section2/6CC takes in sub-section 1 of Section 139, Section142(1)(i) and Section 148 of the Act. But the proviso toSection 276 CC takes in only sub-section 1 of Section 139of the Act and the provisions of Section 142(1)(i) orSection 148 are conspicuously absent. Consequently, thebenefit of the proviso is available only to voluntary filing ofthe return as required under Section 139(1) of the Act. Inother words, the proviso would not apply after detection ofthe failure to file the return and after a notice under - 9 - NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER Section 142(1)(i) or Section 148 of the Act, is issuedcalling for filing of the return of the income. The proviso,therefore, envisages the filing of even belated returnbefore detection of discovery of the failure and issuance ofnotice under Section 142 or Section 148 of the Act. 8.Tne power to levy penalty for delayed filing of the|income tax returns can be traced under Cnapter 21 of theIncome Tax Act, while Chapter 22 of the Income Tax actprovides for offences and prosecutions. A reading of the.aforesaid two chapters would make it very clear that delayin filing of the income tax returns would not only result inpayment of penalty, but it also results in prosecution as—provided under Cnapter 22 of the Act. Therefore, merely.for the reason that petitioner has paid the penalty leviedby the Competent Authority for the delay in filing of thereturns, the same does not exonerate the petitioner from.being prosecuted as provided under Chapter 22 of the Act.of 1961. — NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER QOSection 2/6CC reads as follows: “If a person wilfully fails to furnish in que time [the|return of fringe benefits whicn he ifs required tofurnisn under sub-section (1) of section 115WD or bynotice given under sub-section (2) of the said sectionor section 115WH or) the return of income which he|is required to furnish under sub-section (1) of section139 or by notice given under [clause (1) of sub-section (1) of section 142] or section 148 [or section153A], ne snall be punishable,- NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER QOSection 2/6CC reads as follows: “If a person wilfully fails to furnish in que time [the|return of fringe benefits whicn he ifs required tofurnisn under sub-section (1) of section 115WD or bynotice given under sub-section (2) of the said sectionor section 115WH or) the return of income which he|is required to furnish under sub-section (1) of section139 or by notice given under [clause (1) of sub-section (1) of section 142] or section 148 [or section153A], ne snall be punishable,- (i) in a case where the amount of tax, which wouldhave peen evaded if the failure Nad not been!discovereda*5,exceeds #6/twenty-five|hundredthousand rupees, with rigorous imprisonment for aterm which shall not be less than six months put|wnich may extend to seven years and with fine;| (ii) in any otner case, with imprisonment for a term|which shall not be less than three months but which)may extend to [two] years and with fine: Provided that a person shall not be proceeded|against under this section for failure to furnish in duetime the [return of fringe benefits under sub-section|(1) of section 115WD or] return of income under|sub-section (1) of section 139-. NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER (1) for any assessment year commencing prior to the1st day of April, 1975; or (il) for any assessment year commencing on or after|the 1st day of April, 1975, if- (a) the return is furnished by him before the expiry|of the assessment year 88a [or a return Is furnisnedby him under sub-section (8A) of section 139 within|the time provided in that sub-section]; or [(b) the tax payable by sucn person, not being a|company, on the total income determined on regular|assessment, as requced by the advance tax or self-assessment tax, if any, paid before the expiry of tneassessment year, and any tax deducted or collected|at source, does not exceed ten thousand rupees.|] Section 2/78E of the Act of 1961 reads as follows: "(1) In any prosecution for any offence under thisAct whicn requires a culpable mental state on thepart of the accused, the court snail presume tneexistence of sucn mental state put it shall pe aodefence for the accused to prove the fact that nenad no sucn mental state with respect to the actcharged as an offence in that prosecution.| NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER Explanation - In tnis sub-section, “culpable mentalState’ includes intention, motive or Knowledge of afact or belief in, or reason to believe, a fact. (2) For the purposes of this section, a fact Is said tobe proved only when the court believes it to existbeyond reasonable doubt and not merely when itsexistence is establisned by a preponderance ofprobability. “ 10.From a reading of Section 2/78E of the Act, it isapparent that there is a presumption available as againstthe accused and the Court before which proceedings areinitiated for offence punishable under section 276CC isrequired to raise a presumption against the accused and itis for the accused assessee to successfully rebut the saidpresumption by producing necessary material before thesaid court, failing which he shall be liable to be punished. 11.It is not in dispute that there was a delay in|submitting the Income Tax Returns by the petitioner-assessee and it is also not in dispute that the delayedreturns filed on behalf of the petitioner-assessee was. NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER 10.From a reading of Section 2/78E of the Act, it isapparent that there is a presumption available as againstthe accused and the Court before which proceedings areinitiated for offence punishable under section 276CC isrequired to raise a presumption against the accused and itis for the accused assessee to successfully rebut the saidpresumption by producing necessary material before thesaid court, failing which he shall be liable to be punished. 11.It is not in dispute that there was a delay in|submitting the Income Tax Returns by the petitioner-assessee and it is also not in dispute that the delayedreturns filed on behalf of the petitioner-assessee was. NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER accepted by the Department on payment of penaltyimposed on the petitioner. The question before the TrialCourt is whether there was a willful and deliberate delayon the part of the petitioner-assessee in submitting theIncome Tax Returns and in view of the said presumptionunder Section 278E, it is for the accused to prove beforethe Trial Court that he nad no such mental! state and rebutthe presumption. In the statement of objection filed onbenalf of the respondent, it has been specifically statedthat|thesanctioningAuthority namely|Principal Commissioner of Income Tax before according sanction asprovided under Section 2/9(1) of the Act of 1961 had.issued Show Cause Notice to the _ petitioner-assessegranting an opportunity to file his objection and there afterobjections filed by the petitioner were considered anddisposed of by a Speaking Order. Therefore, there is nomerit in the contentions urged on behalf of the petitioner.that he was not heard by the Competent Authority before NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER issuing the sanction order to prosecute him for allegedoffence. 17.The Hon’‘ble Supreme Court in the case ofSasiEnterprisesat Para No.30 nas observed as follows: “30. Section 278E deals with the presumption as to)culpable mental state, which was inserted’ bythe Taxation Laws (Amendment and Miscellaneous|Provisions) Act, 1986. Tne question is on whom the|burden lies, either on tne prosecution or the|assessee, under Section 2/78E to prove whetner tneassessee has or has not committed willful defau!t tnfiling the returns. Court in a prosecution of offence,like Section 2/6CC has to presume the existence ofmens rea and it is for the accused to prove the|contrary and that too beyond reasonable doubt.|Resuiltantly, the appellants have to prove thecircumstances whicn prevented them from filing the|returns as per Section 139(1) or in response to|notices under Sections 147 and 148 of the Act. ” 13.In the case otfV.P Puny,the High Court of Delhi has.observed tnat in view of Section 2/8E of the Income TaxAct, in any prosecution for offence under the act, the courthas to presume the existence of.mens Treand it is for the| NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER accused to prove the contrary and that too beyondreasonable doubt. Prosecution for offence punishable.under section 276CC of the Act of 1961 can be initiatedagainst an accused for willful and deliberate delay in filingthe returns and since there is a presumption availableunder section 278E of the act with regard to the culpablemental status of the accused, it is for the accused to rebut|the said presumption in accordance with law. 13.In the case otfV.P Puny,the High Court of Delhi has.observed tnat in view of Section 2/8E of the Income TaxAct, in any prosecution for offence under the act, the courthas to presume the existence of.mens Treand it is for the| NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER accused to prove the contrary and that too beyondreasonable doubt. Prosecution for offence punishable.under section 276CC of the Act of 1961 can be initiatedagainst an accused for willful and deliberate delay in filingthe returns and since there is a presumption availableunder section 278E of the act with regard to the culpablemental status of the accused, it is for the accused to rebut|the said presumption in accordance with law. 14.Under the circumstances, the explanation sought to be offered on behalf of the petitioner before this Courtcannot be accepted and it is for the petitioner to leadevidence and produce necessary material before thelearned Magistrate in support of his defence and rebutt the:presumption available against him under Section 278E of.the Act. In the case ofC.P Yogeshwara, the Co-ordinatebench of this Court had quashed the proceedings initiatedagainst the assessee for offence punishable under Section2/76CC of Act of 1961, for the reason that the assesseenad filed nis returns as on the date of order of sanction Dy. NC: 2025:KHC-K:238CRL.P No. 201214 of 2023C/W CRL.P No. 201213 of 2023CRL.P No. 201215 of 2O23AND 1 OTHER the Competent Authority which had gone unnoticed. |Therefore|theDepartment.had|erredIninitiatingproceedings. In the said case, this Court has not taken.notice of the presumption that was available under section.2/8E of the Act and therefore the order passed inCri.P.No.1998/2016 cannot be of any assistance to thepetitioners, more so in view of the judgment of the Hon'ble.Supreme Court in the case ofSasi Enterprises LD.Under the circumstances, I am of the opinion that|the petitions lack merit and they are liable to be dismissedwith liberty to the petitioner to raise all such groundsbefore the learned Magistrate in support of his defence.Accordingly, the following order: ORDER The criminal petitions are dismissed.| Sd/-|(S.VISHWAJITH SHETTY)JUDGE|