Cr.m.p v. Commissioner Of Income Tax (Central), Central Revenue Building, 3[Rd]Floor, Birchand Patel Marg, P.o. G.p.o., P.s. Kotwali, District- Patna

IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr.M.P. No. 1553 of 2016 Suresh Kumar Agarwal, Son of Late Ram Rikshpal Agarwal, Resident ofShastri Nagar West, Near Jain Mandir, P.O. & P.S. Dhowatand, District-Dhanbad…Petitioner -Versus- 1.Union of India, through the Principal Commissioner of Income Tax(Central), Central Revenue Building, 3[rd] Floor, Birchand Patel Marg,P.O. G.P.O., P.S. Kotwali, District- Patna-800 001(Central), Central Revenue Building, 3[rd] Floor, Birchand Patel Marg,P.O. G.P.O., P.S. Kotwali, District- Patna-800 001 2.Commissioner of Income Tax (Central), Central Revenue Building, 3[rd]Floor, Birchand Patel Marg, P.O. G.P.O., P.S. Kotwali, District- Patna-800001Floor, Birchand Patel Marg, P.O. G.P.O., P.S. Kotwali, District- Patna-800001 3.Deputy Commissioner of Income Tax, Central Circle, Income TaxBuilding, Luby Circular Road, P.O., P.S. & District- DhanbadBuilding, Luby Circular Road, P.O., P.S. & District- Dhanbad … Opposite Parties ----- CORAM: HON’BLE MR. JUSTICE SANJAY KUMAR DWIVEDI ----- For the Petitioner: Mr. D.V. Pathy, Advocate For the Opposite Parties: Ms. Amrita Sinha, Advocate ----- 09/29.08.2022.Heard Mr. D.V. Pathy, learned counsel for the petitioner andMs. Amrita Sinha, learned counsel for the opposite parties. 2.This petition has been filed for quashing the entire criminalproceedings including the order taking cognizance dated 18.03.2016 passedby the learned Special Judge, Economic Offence, Dhanbad in connectionwith Complaint Case being C.O. Case No.01 of 2016, whereby, cognizancehas been taken against the petitioner under Section 276CC of the IncomeTax Act, 1961, pending in the court of the learned Special Judge, EconomicOffence, Dhanbad. 3.The opposite party no.2 has filed the complaint case being C.O. CaseNo.01 of 2016 before the court of the learned Special Judge, EconomicOffence, Dhanbad against the petitioner under Section 276CC of the Income Tax Act, 1961 pertaining to the Assessment Year 2013-14 alleging thereinthat a search was conducted in the case of accused on 19.02.2014 andsubsequent case and his case was centralized with the Commissioner ofIncome Tax, Dhanbad vide order dated 27.08.2014. The accused SureshKumar Agarwal was an assessee in his individual capacity within themeaning of Income Tax. The income of Suresh Kumar Agarwal was taxablewithin the meaning of Income Tax Act for the relevant assessment year2013-14 and as such he had to file his income tax return in due time i.e.within 15 days of receipt of notice under Section 153A dated 04.09.2014before the Income Tax Department, Central Circle, Dhanbad. The accusedwas fully aware of the fact that he had to file his Income Tax return in duetime. He willfully, deliberately, knowingly and having mens rea in his mindfailed, neglected and avoided to file his Income Tax return for theassessment year 2013-14 within 15 days of notice under Section 153Adated 04.09.2014 with intent to escape from tax liabilities which waschargeable and imposable on him. The accused Suresh Kumar Agarwalultimately filed Income Tax return for the assessment year 2013-14 on04.02.2016 in ITR-4 showing total income from all sources atRs.81,63,930/- after lapse of almost 17 months without reasonable causeand excuse. The said assessee did not make any prayer along with the I.T.Return nor filed any petition for condonation of delay showing legal,reasonable and justified reasons as to why the delay of 17 months wascaused in filing return for the assessment year 2013-14. The complainantserved a notice dated 19.03.2015 fixing compliance on 06.04.2015 as towhy prosecution under Section 276 CC of the Income Tax Act should not belaunched against the accused. The accused kept mum from the date of the receipt of notice and no compliance was made. It was further alleged thatafter examining all the relevant documents, it is crystal clear that theaccused deliberately, willingly, intentionally, deliberately and having mensrea in his mind failed, neglected and avoided to file his return on income forthe assessment year 2013-14 in due time i.e. within 15 days of receipt ofnotice under Section 153A dated 04.09.2014. The Principal Commissioner ofIncome Tax (Central), Patna after considering all the facts andcircumstances applied his judicial mind and opined that the accused did notfile his return of income in due time i.e. within 15 days of receipt of noticeunder Section 153A dated 04.09.2014 rather filed his return on 04.02.2016without reasonable cause and excuse. The letter dated 10.08.2015 forinitiation of prosecution under Section 276CC of the Income Tax Act wasissued and the accused in response thereto vide letter dated 13.08.2015requested for 30 days time, which was duly considered and compliance wasfixed on 18.09.2015, but neither accused nor his authorized representativeappeared. The final show cause was issued on 29.09.2015 and in responsethereto, the accused vide letter dated 12.10.2015 requested for 20 daystime for preparation of return and filing of explanation and case wasadjourned to 27.10.2015. On 27.10.2015, the accused requested for onemonth more time showing festivals like Diwali and Chhath, but the samewas rejected by the Principal Commissioner of Income Tax (Central), Patna.The Principal Commissioner of Income Tax (Central), Patna vide letter dated02.11.2015 granted sanction under Section 279(1) of the Act for launchingprosecution under Section 276CC of the Income Tax Act. 4.Mr. D.V. Pathy, learned counsel for the petitioner submits that thedelay in filing the return was not intentional. He further submits that delay in filing the return was occurred due to death in the family and also notgetting photo copies of the papers and documents, which have been seizedby the Income Tax Department when the premises of the petitioner wassearched. He also submits that the return was filed and tax in accordancetherewith has been paid along with interest. The addition made by therespondent Assessing Officer in such assessment was also deleted in full bythe first appellate authority, namely, the Commissioner of Income Tax(Appeal) and no tax is due. He further submits that the petitioner has notreceived any notice in the second appeal. He further submits that while aprotective assessment is permissible, a protective recovery is not. Nopenalty can be imposed in case of a protective assessment. He furtherelaborates his argument by way of submitting that since no penalty fordelay in filing of the return has been imposed by the respondent AssessingOfficer, the whole of the tax payable as per return has been paid andnothing is due, the additions made by the respondent Assessing Officer hasbeen deleted in full by the first appellate authority, namely, theCommissioner of Income Tax (Appeal), the continuance of prosecutionunder Section 276CC of the Income Tax Act would only be vexatious andwould serve no useful purpose and, therefore, be an abuse of the processof the Court. He submits that willful default of payment of tax was thesubject matter before the Calcutta High Court in the case of Gopal JiShaw v. Income Tax Officer, Calcutta & others, reported in [1988]173 ITR 554 (Cal). 5.Relevant paragraphs of the said judgment are quoted herein below: “The Division Bench of this court held as follows:"In the facts of this case, it appears to us that interest"In the facts of this case, it appears to us that interesthaving been charged by the Income-tax Officer up to the date 5.Relevant paragraphs of the said judgment are quoted herein below: “The Division Bench of this court held as follows:"In the facts of this case, it appears to us that interest"In the facts of this case, it appears to us that interesthaving been charged by the Income-tax Officer up to the date of the filing the return, the principles laid down by theSupreme Court in M. Chandra Sekhar [1985] 151 ITR 433 areclearly attracted. The fact that such interest was waivedSubsequently by the Commissioner of Income-tax would makeno difference in principle inasmuch as it is the primary act ofthe Income-tax Officer in accepting the return filed andcharging interest up to the date of the filing which raises thepresumption of extension of time. What was waived by theCommissioner was interest which was already charged by theIncome-tax Officer. As held by the Gujarat High Court inLiberal Engineering Works' case [1986] 158 ITR 520, theIncome-tax Officer, having levied interest up to the date ofthe filing of the return, was not justified in further invokingthe penalty proceedings. We accept the contention of theassessee that even in the said three assessment years wheretime was in fact extended by the Income-tax Officer, thecharging of interest up to the dates of the filing of the returnsafter the extended period gives rise to a presumption offurther extension of time for filing of the returns," It is, therefore, contended that if for the delay in filing thereturn, no penalty can be imposed as interest was charged,no criminal prosecution can be initiated for such default either.It is contended on behalf of the respondents by Mr. MihirBhattacharjee, learned advocate, that since the prosecutionhas been launched and the learned Metropolitan Magistratehas taken cognizance of the same, this court should not atthis stage quash the proceeding. If the Department cannotprove the case, the petitioner will be acquitted. He hasSubmitted that the facts disclose an offence which should betried by the learned Metropolitan Magistrate. I am, however, unable to accept the contentions of Mr.Bhattacharjee. A criminal prosecution for an offence under a special statutemust not be initiated as a matter of course where theprosecution would involve intricate questions of interpretationof the Income TaxAct. The Department should not rush withthe prosecution without any determination by the Income-taxOfficer of the liability of the accused-assessee which is soughtto be made the basis for prosecution. In this case, thoughpenalty proceeding under Section271(1)(a) was initiatedagainst the petitioner for delay in filing the return, no orderhas been passed. In other words, the Income-tax Officer didnot find any reason to penalise the petitioner for delay in filingthe return. In Dooars Transport's case [1986] 162 ITR 383,this court held that once interest under section 139(8) of theAct has been charged up to the date of filing of the return, itmust be presumed that the time to file a return was in factextended. A proceeding under the Income-tax Act forimposition of penalty is quasi-criminal in nature. If the quasi-criminal proceeding, that is to say, the proceeding forimposition of penalty cannot be sustained when the Income-tax Officer, while making the assessment, charges interestunder Section 139(8) of the Act, on a parity of reasoning, nocriminal prosecution either can be launched in such a case. Inthe criminal proceeding, wilful default in filing the return has to be established. By charging interest under Section 139(8),the Income-tax Officer has impliedly extended the time to filethe return and the question, therefore, of wilful default infiling the return of income does not and cannot arise. As amatter of fact, although in this case, penalty proceeding wasinitiated, it was not proceeded with thereafter, which onlygoes to show that the Department did not consider itnecessary to impose any penalty after realisation of interestunder Section 139(8). to be established. By charging interest under Section 139(8),the Income-tax Officer has impliedly extended the time to filethe return and the question, therefore, of wilful default infiling the return of income does not and cannot arise. As amatter of fact, although in this case, penalty proceeding wasinitiated, it was not proceeded with thereafter, which onlygoes to show that the Department did not consider itnecessary to impose any penalty after realisation of interestunder Section 139(8). In a criminal case, it is not for the accused to establish hisinnocence. The onus is on the prosecution to bring home theguilt of the accused. Mens rea is an essential ingredient of acriminal offence. The fact of extension of time to file thereturn excludes the element of mens rea inasmuch as it mustbe presumed that the Income-tax Officer, being satisfied thatthere was ground for delay in filing the return, had extendedthe time. The object of launching criminal prosecution for wilfuldefault in complying with the provisions of the Income-tax Actis to prevent evasion of tax. But in each and every case,without looking into the gravity of offence and withoutconsidering the attending circumstances, no prosecutionshould be launched. Unless there is wilful default in filing thereturn, no prosecution can be launched. From the complaintthat has been filed in this case, it appears that no case ofwilful default has been made out.” 6.By way of referring this judgment, learned counsel for the petitioner submits that a criminal prosecution for an offence under a special statutemust not be initiated as a matter of course where the prosecution wouldinvolve intricate questions of interpretation of the Income Tax Act. Theobject of launching criminal prosecution for willful default in complying withthe provisions of the Income Tax Act is to prevent evasion of tax. 7.Learned counsel for the petitioner further submits that willful failureon the part of the defaulter and the nature of penalty was again the subjectmatter before the Hon'ble Supreme Court in the case of GujratTravancore Agency v. Commissioner of Income-Tax, Kerala,reported in [1989] 177 ITR 455. 8.Relevant paragraphs of the said judgment are quoted herein below: “Learned counsel for the assessee has addressed anexhaustive argument before us on the question whether a 7.Learned counsel for the petitioner further submits that willful failureon the part of the defaulter and the nature of penalty was again the subjectmatter before the Hon'ble Supreme Court in the case of GujratTravancore Agency v. Commissioner of Income-Tax, Kerala,reported in [1989] 177 ITR 455. 8.Relevant paragraphs of the said judgment are quoted herein below: “Learned counsel for the assessee has addressed anexhaustive argument before us on the question whether a penal- ty imposed under s. 271(1)(a) of the Act involves theele- ment of mens rea and in support of his submission that itdoes he has placed before us several cases decided by thisCourt and the High Courts in Order to demonstrate that theproceedings by way of penalty under s. 271(1)(a) of the Actare quasi criminal in nature and that therefore the element ofmens rea is a mandatory requirement before a penalty can beimposed under s. 271(1)(a). We are relieved of the necessityof referring to all those decisions. Indeed, many of them wereconsidered by the High Court and are referred to in thejudgment under appeal. It is sufficient for us to refer to s.271(1)(a), which provides that a penalty may be imposed ifthe Income Tax Officer is satisfied that any person haswithout reasonable cause failed to furnish the return of totalincome, and to s. 276C which provides that if a person wilfullyfails to furnish in due time the return of income requiredunder s. 139(1), he shall be punishable with rigorousimprisonment for a term which may extend to one year orwith fine. It is clear that in the former case what is intended isa civil obligation while in the latter what is imposed is acriminal sentence. There can be no dispute that having regardto the provisions of s. 276C, which speaks of wilful failure onthe part of the defaulter and taking into consideration thenature of the penalty, which is punitive, no sentence can beimposed under that provision unless the element of mens reais established. In most cases of criminal liability, the intentionof the Legislature is that the penalty should serve as adeterrent. The creation of an offence by Statute proceeds onthe assumption that society suffers injury by and the act oromission of the defaulter and that a deterrent must beimposed to dis- courage the repetition of the offence. In thecase of a proceeding under s. 271(1)(a), however, it seemsthat the intention of the legislature is to emphasise the fact ofloss of Revenue and to provide a remedy for such loss,although no doubt an element of coercion is present in thepenalty. In this connection the terms in which the penalty fallsto be measured is significant. Unless there is something in thelanguage of the statute indicating the need of establish theelement of mens tea it is generally sufficient to prove that adefault in complying with the statute has occurred. In ouropinion, there is nothing in s. 271(1)(a) which requires thatmens tea must be proved before penalty can be levied underthat provision. We are supported by the statement in CorpusJuris Secundum, volume 85, page 580, paragraph 1023: "A penalty imposed for a tax delinquency is a civilobligation, remedial and coercive in its nature, and isfar different from the penalty for a crime or a fine orforfeiture provided as punishment for the violation ofcriminal or penal laws." Accordingly, we hold that the element of mens rea was notrequired to be proved in the proceedings taken by theIncome tax Officer under s. 271(1)(a) of the Income-tax Actagainst the assessee for the assessment years 1965-66 and1966-67.” 9.By way of referring this judgment, learned counsel for the petitionersubmits that the Hon'ble Supreme Court has held that in most cases ofcriminal liability, the intention of the Legislature is that the penalty shouldserve as a deterrent. He submits that in the case in hand, no penalty hasbeen imposed under the provisions of the statute. Accordingly, we hold that the element of mens rea was notrequired to be proved in the proceedings taken by theIncome tax Officer under s. 271(1)(a) of the Income-tax Actagainst the assessee for the assessment years 1965-66 and1966-67.” 9.By way of referring this judgment, learned counsel for the petitionersubmits that the Hon'ble Supreme Court has held that in most cases ofcriminal liability, the intention of the Legislature is that the penalty shouldserve as a deterrent. He submits that in the case in hand, no penalty hasbeen imposed under the provisions of the statute. 10.Learned counsel for the petitioner submits that willful failure ofpayment of tax was also the subject matter before the Andhra Pradesh HighCourt in the case of Income-Tax Officer v. Autofil & others, reported in [1990] 184 ITR 47 (AP). 11.Relevant paragraph of the said judgment is quoted herein below: “Therefore, wilfulness contemplates some element of evilmotive and want to justification. In CIT v. Patram Dass RajaRam Beri [1981] 132 ITR 671, a Full Bench of the Punjab andHaryana High Court, considering the term "wilful failure"occurring in section 276CC of the Income-tax Act, held that"willfulness certainly brings in the element of guilt" and thusthe requirement of mens rea. Our Supreme Court in GujaratTravancore Agency v. CIT, has observed that the creation ofan offence by statute proceeds on the assumption that societysuffers injury by the act or omission of the defaulter and thata deterrent must be imposed to discourage the repetition ofthe offence. It also observed that. In most cases of criminalliability, the intention of the Legislature is that the penaltyshould serve as a deterrent.” 12.Learned counsel for the petitioner further submits that when theappellate authority has set aside the further imposition of tax, the criminalprosecution is bad in law. To buttress this argument, he relied upon thejudgment passed by the Hon'ble Supreme Court in the case of G.L.Didwania & another v. Income-Tax Officer & another, reported in [1997] 224 ITR 687 (SC). 13.Relevant paragraph of the said judgment is quoted herein below: “In the instant case, the crux of the matter is attracted andwhether the prosecution can be sustained in view of the orderpassed by the Tribunal. As noted above, the assessing authority held that the appellant-assessee made a falsestatement in respect of income of Young India and TransportCompany and that finding has been set aside by the Income-tax Appellate Tribunal. If that is the position then we areunable to see as to how criminal proceedings can besustained.” 14.On the same point, learned counsel for the petitioner submits that iffurther penalty has been struck down, the criminal case cannot survive. Herelied upon the judgment passed by the Hon'ble Supreme Court in the case of K.C. Builders & another v. Assistant Commissioner of Income- Tax, reported in [2004] 265 ITR 562 (SC). 15.Relevant paragraphs of the said judgment are quoted herein below: authority held that the appellant-assessee made a falsestatement in respect of income of Young India and TransportCompany and that finding has been set aside by the Income-tax Appellate Tribunal. If that is the position then we areunable to see as to how criminal proceedings can besustained.” 14.On the same point, learned counsel for the petitioner submits that iffurther penalty has been struck down, the criminal case cannot survive. Herelied upon the judgment passed by the Hon'ble Supreme Court in the case of K.C. Builders & another v. Assistant Commissioner of Income- Tax, reported in [2004] 265 ITR 562 (SC). 15.Relevant paragraphs of the said judgment are quoted herein below: “The above judgment squarely applies to the facts andcircumstances of the case on hand. In this case also, similarly,the application was moved by the assessee before theMagistrate to drop the criminal proceedings which weredismissed by the Magistrate and the High Court also on apetition filed under Sections 397 and 401 of the Code ofCriminal Procedure, 1973 to revise the order of the AdditionalChief Metropolitan Magistrate has also dismissed the sameand refused to refer to the order passed by the competentTribunal. As held by this Court, the High Court is not justifiedin dismissing the criminal revision vide its judgment ignoringthe settled law as laid down by this Court that the finding ofthe appellate Tribunal was conclusive and the prosecutioncannot be sustained since the penalty after having beencancelled by the complainant following the appellate Tribunal'sorder, no offence survives under the Income Tax Act and thusquashing of prosecution is automatic. In the instant case, thepenalties levied under Section 271(1)(c) were cancelled by therespondent by giving effect to the order of the Income TaxAppellate Tribunal in I.T.A. Nos. 3129-3132. It is settled lawthat levy of penalties and prosecution under Section 276C aresimultaneous. Hence, once the penalties are cancelled on theground that there is no concealment, the quashing ofprosecution under Section 276C is automatic. In our opinion, the appellants cannot be made to sufferand face the rigorous of criminal trial when the same cannotbe sustained in the eyes of law because the entire prosecutionin view of a conclusive finding of the Income Tax Tribunal thatthere is no concealment of income becomes devoid ofjurisdiction and under Section 254 of the Act, a finding of theAppellate Tribunal supersedes the order of the AssessingOfficer under Section 143(3) more so when the AssessingOfficer cancelled the penalty levied. In our view, once the finding of concealment andsubsequent levy of penalties under Section 271(1)(c) of the In our opinion, the appellants cannot be made to sufferand face the rigorous of criminal trial when the same cannotbe sustained in the eyes of law because the entire prosecutionin view of a conclusive finding of the Income Tax Tribunal thatthere is no concealment of income becomes devoid ofjurisdiction and under Section 254 of the Act, a finding of theAppellate Tribunal supersedes the order of the AssessingOfficer under Section 143(3) more so when the AssessingOfficer cancelled the penalty levied. In our view, once the finding of concealment andsubsequent levy of penalties under Section 271(1)(c) of the Act has been struck down by the Tribunal, the AssessingOfficer has no other alternative except to correct his orderunder Section 154 of the Act as per the directions of theTribunal. As already noticed, the subject matter of thecomplaint before this Court is concealment of income arrivedat on the basis of the finding of the Assessing Officer. If theTribunal has set aside the order of concealment and penalties,there is no concealment in the eyes of law and, therefore, theprosecution cannot be proceeded with by the complainant andfurther proceedings will be illegal and without jurisdiction. TheAssistant Commissioner of Income Tax cannot proceed withthe prosecution even after the order of concealment has beenset aside by the Tribunal. When the Tribunal has set aside thelevy of penalty, the criminal proceedings against theappellants cannot survive for further consideration. In ourview, the High Court has taken the view that the charges havebeen framed and the matter is in the stage of further cross-examination and, therefore, the prosecution may proceed withthe trial. In our opinion, the view taken by the learnedMagistrate and the High Court is fallacious. In our view, if thetrial is allowed to proceed further after the order of theTribunal and the consequent cancellation of penalty, it will bean idle and empty formality to require the appellants to havethe order of Tribunal exhibited as a defence documentinasmuch as the passing of the order as aforementioned isunsustainable and unquestionable.” 16.By way of referring this judgment, learned counsel for the petitionersubmits that once the penalties are cancelled on the ground that there is noconcealment, the quashing of prosecution under Section 276CC is automaticand the petitioner cannot be made to suffer and face the rigorous ofcriminal trial when the same cannot be sustained in the eyes of law becausethe entire prosecution in view of a conclusive finding of the Income TaxTribunal that there is no concealment of income becomes devoid ofjurisdiction and under Section 254 of the Act, a finding of the appellateauthority supersedes the order of the Assessing Officer under Section143(3) and more so when the Assessing Officer cancelled the penaltylevied. 17.Learned counsel for the petitioner further submits that protectivemeasure because of similar penalty was the subject matter before the Punjab and Haryana High Court in the case of Commissioner of Income-Tax, Patiala-II v. Behari Lal Pyare Lal, reported in [1983] 141 ITR32 (P&H). 18.Relevant paragraph of the said judgment is quoted herein below: 17.Learned counsel for the petitioner further submits that protectivemeasure because of similar penalty was the subject matter before the Punjab and Haryana High Court in the case of Commissioner of Income-Tax, Patiala-II v. Behari Lal Pyare Lal, reported in [1983] 141 ITR32 (P&H). 18.Relevant paragraph of the said judgment is quoted herein below: “The penalty was imposed by the IAC as a protectivemeasure because a similar penalty had already been imposedon the two partners for concealment of the said income. TheTribunal found that, under law, a protective order ofassessment can be passed but not of penalty. The learnedcounsel for the Revenue was unable to challenge this view ofthe Tribunal and frankly conceded that he was not able to citeany provision of law or decided case which warranted aprotective order of penalty. That apart, no finding wasrecorded by the IAC that there was any wilful concealment ofthe income and in the absence of such a finding, the order ofpenalty would be unsustainable. The other reason given fordeleting the penalty was that the income did not accrue to thepresent firm. As is apparent from the facts stated above, theamount received by the firm was not credited in its accountand instead credited to the accounts of Lachhman Dass andSat Parkash who were partners in the earlier firm. Theassessee-firm, therefore, did not treat the said amount as itsown and it being a firm different from the one to whom therefund had been made could not be held guilty of anyconcealment. The Tribunal, therefore, rightly deleted thepenalty and questions Nos. 1 and 3 are accordingly answeredagainst the Revenue and in favour of the assessee.” 19.By way of relying these judgments and by way of referring relevantorders particularly the Commissioner's order, which has been annexed withthe supplementary affidavit, learned counsel for the petitioner submits thatsubsequently further penalty has been set aside by the first appellateauthority, there is no reason to allow to continue the criminal proceedingsparticularly in the facts and circumstances that the entire tax has been paidalong with interest. 20.Per contra, Ms. Amrita Sinha, learned counsel for the opposite partiesdraws attention of the Court to Section 276CC of the Income Tax Act andsubmits that there is provision of initiating proceedings for non-filing of 19.By way of relying these judgments and by way of referring relevantorders particularly the Commissioner's order, which has been annexed withthe supplementary affidavit, learned counsel for the petitioner submits thatsubsequently further penalty has been set aside by the first appellateauthority, there is no reason to allow to continue the criminal proceedingsparticularly in the facts and circumstances that the entire tax has been paidalong with interest. 20.Per contra, Ms. Amrita Sinha, learned counsel for the opposite partiesdraws attention of the Court to Section 276CC of the Income Tax Act andsubmits that there is provision of initiating proceedings for non-filing of return of income tax. She submits that the petitioner willfully failed to filereturn on time and the authorities have given ample opportunity to thepetitioner to file the return and in spite of that, the petitioner failed to filethe return and that is why the case has been instituted against him. Shefurther submits that search and seizure operation was conducted on19.02.2014 and subsequent dates and notice under Section 153A of theIncome Tax Act dated 04.09.2014 was issued to the petitioner whereinrequest was made to file return within 15 days and in spite of that thepetitioner failed to comply the said notice. She also submits that vide letterdated 19.03.2015, a show cause notice for initiating proceedings underSection 276CC of the Act for non-filing of the return of income for theassessment year 2013-14 was issued to the petitioner and once again thepetitioner has not complied the same. On 21.07.2015, a proposal wasforwarded to the Principal Commissioner of Income Tax (Central), Patna foraccording sanction under Section 279(1) of the Act to prosecute thepetitioner for willful attempt to fail to file the return of income even afterexpiry of due time as fixed by the notice under Section 153A of the Act. Shefurther submits that a letter for initiation of prosecution under Section276CC of the Act was issued by the office of the Principal Commissioner ofIncome Tax (Central), Patna dated 10.08.2015 and in response to that, aletter was written on behalf of the petitioner on 13.08.2015 requested toprovide 30 days time on the ground that the petitioner is out of station onaccount of death of his cousin. She submits that this was the first responseby the petitioner. She further submits that the request of the petitioner wasaccepted vide letter dated 11.09.2015 and the date was fixed for nextcompliance on 18.09.2015, however, the petitioner failed to furnish any explanation in this regard. She also submits that a final show cause dated29.09.2015 for initiating prosecution under Section 276CC of the Act wasissued to the petitioner by the Principal Commissioner of Income Tax(Central), Patna giving last opportunity to the petitioner to show cause as towhy sanction under Section 279(1) for launching prosecution under Section276CC of the Act be not granted and vide reply dated 12.10.2015, thepetitioner requested further period of 20 days for filing of return of incomeand explanation. On such request, one more opportunity was granted to thepetitioner to file the return, however, the petitioner again failed to file thereturn. She further submits that vide letter dated 24.10.2015, the petitioneragain requested for providing further one month time in preparing and filingthe returns for the last six years. However, the authority concerned hasrejected the request considering that in light of Section 153A of the Act, theassessment is required to be done within two years. She further submitsthat vide letter dated 02.11.2015, the sanction was accorded by thecompetent authority. She submits that the petitioner failed to file the returnand therefore vide letter dated 02.11.2015, the sanction was accorded forlaunching prosecution under Section 276CC of the Act against the petitioner.She further submits that on 14.02.2016, the petitioner filed return showingincome of Rs.81,63,930/- which includes disclosure of additional income ofRs.80 Lakhs pursuant to search. On 26.02.2016, the petitioner has alsodisclosed an additional income of Rs.17,50,000/-. Thus, total undisclosedincome of the petitioner comes to Rs.97,50,000/-, which has beenconcealed during the assessment year. She further submits that what is thewillful delay in filing the return is the subject matter of trial and all thesecan be looked into by the learned trial court and this Court cannot interfere at this stage under Section 482 Cr.P.C. She also took the Court to therequest letters annexed with the petition by which the petitioner hasrequested for extension of time for filing of the return. On these grounds,she submits that there is willful delay and second appeal against the orderpassed by the first appellate authority has also been filed by thedepartment, which is still pending. She further submits that it is well settledthat on protective assessment, the penalty is not prescribed under thestatute, which has been considered by the Punjab & Haryana High Court inthe case of Commissioner of Income-Tax, Patiala-II v. Behari Lal Pyare Lal(supra) as relied by the learned counsel for the petitioner. 21.By way of reply, Mr. D.V. Pathy, learned counsel for the petitionersubmits that it has been admitted that since time for assessment was goingto be lapsed as prescribed under the statute, the authority has proceeded tofile the case against the petitioner. He further submits that in light ofSection 144 of the Act, the authority concerned is competent to proceedeven ex-parte for recovery of the income tax, in accordance with law. Onthese grounds, he submits that to allow the criminal proceedings tocontinue will amount to abuse of process of law. 22.In view of the above facts and considering the submissions ofthe learned counsel for the parties, the Court has gone through thematerials on the record and also examined the judgments relied bythe learned counsel for the petitioner. It is an admitted fact that thepetitioner's premises was searched on a particular date subsequent thereto,certain documents have been seized. The petitioner has not filed returnon time. The detail of dates and facts have been noted herein above in thearguments of Ms. Amrita Sinha, learned counsel for the opposite parties. 22.In view of the above facts and considering the submissions ofthe learned counsel for the parties, the Court has gone through thematerials on the record and also examined the judgments relied bythe learned counsel for the petitioner. It is an admitted fact that thepetitioner's premises was searched on a particular date subsequent thereto,certain documents have been seized. The petitioner has not filed returnon time. The detail of dates and facts have been noted herein above in thearguments of Ms. Amrita Sinha, learned counsel for the opposite parties. It is also an admitted fact that the petitioner has filed the return along withinterest, which has been accepted by the authority concerned.The subsequent protective assessment has been laid upon the petitioner,which was the subject matter before the first appellate authority, whichhas exonerated entire further assessment of the petitioner vide order dated03.07.2019, which has been brought on record by way of filingsupplementary affidavit. This is a case arising out of the Special Actstatute. Admittedly, no penalty proceeding has been initiated againstthe petitioner. There is provision of initiation of penalty proceeding.However, the Department has not chosen to invoke Section 271(1)(A) underthe statute. 23.It has been held by the Calcutta High Court in the case of Gopal JiShaw (supra), the Department should not rush with the prosecution withoutany determination by the Income Tax Officer of the liability of the accused-assessee, which is sought to be made the basis for prosecution and mensrea is one of the essential ingredient of a criminal offence. In the case inhand, the petitioner has already deposited the tax as well as the interest inlight of the statute. When the Income Tax Officer has levied interest onfiling of the return, it must be presumed that the Income Tax Officer hasextended the time for filing the return after satisfying himself that there wasground for delay in filing the return, as has been held by the Calcutta HighCourt in the case of Gopalji Shaw (supra). 24.When the amount in question along with the interest has alreadybeen paid, no sentence can be imposed under that provision unless theelement of mens rea is established and the intention of the Legislature isthat the penalty should serve as a deterrent. In the Act, it has been provided how to proceed if a particular assessee is not filing the return ontime, which suggests that it is civil obligation. 25.It has been held by the Andhra Pradesh High Court in the case ofIncome Tax Officer v. Autofil (supra) that the willful failure occurring inSection 276CC of the Income Tax Act held that willfulness certainly brings inthe element of guilt and thus the requirement of mens rea will come intoforce. 26.In the case of Gujrat Travancore Agency (supra), the Hon'bleSupreme Court has observed that the creation of an offence by statuteproceeds on the assumption that the society suffers injury by the act ofomission of the offence. It has also been observed in most of the cases ofcriminal liability, the intention of the Legislature is that the penalty shouldserve as a deterrent. 27.In the case in hand, the first appellate authority has set aside thefurther assessment and it is an admitted fact as to whether the criminalproceedings can be sustained or not. In the similar circumstance, in thecase of G.L. Didwania (supra), the Hon'ble Supreme Court has held that ifthat is the position then the Court is unable to see as to how criminalproceedings can be sustained. The same view was again taken in the caseof K.C. Builders (supra). 27.In the case in hand, the first appellate authority has set aside thefurther assessment and it is an admitted fact as to whether the criminalproceedings can be sustained or not. In the similar circumstance, in thecase of G.L. Didwania (supra), the Hon'ble Supreme Court has held that ifthat is the position then the Court is unable to see as to how criminalproceedings can be sustained. The same view was again taken in the caseof K.C. Builders (supra). 28.The argument of Ms. Amrita Sinha, learned counsel for the oppositeparties about willful delay in filing the return has been considered by theCalcutta High Court in the case of Gopal Ji Shaw (supra). Identical is thesituation here as the authority concerned has accepted the return alongwith interest filed by the petitioner and subsequently the first appellateauthority has set aside the further assessment. 29.As a cumulative effect of the above facts, reasons and analysis, toallow the criminal proceedings to continue will amount to abuse of processof law. Accordingly, the entire criminal proceedings including the ordertaking cognizance dated 18.03.2016 passed by the learned Special Judge,Economic Offence, Dhanbad in connection with Complaint Case being C.O.Case No.01 of 2016, pending in the court of the learned Special Judge,Economic Offence, Dhanbad is, hereby, quashed. 30.Resultantly, this petition stands allowed and disposed of. 31.Interim order dated 05.12.2016 stands vacated. Ajay/ (Sanjay Kumar Dwivedi, J.)