M/S. S.r.s. Projects v. Ravi Kumar, I.e., Petitioner

IN THE HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD TUESDAY, THE SECOND DAY OF APRILTWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SMT JUSTICE K. SUJANACRIMINAL PETITIQN NO: 11775OF 2023 Between: 1. M/s. S.R.S. Projects, having its Regd Office at 15, Survey No.283, Peart'sValley, Nizampet, Kukatpally, Hyderabad-s0O 090 Represented by itsManaging Partner V. Ravi Kumar, i.e., Petitioner no.2Valley, Nizampet, Kukatpally, Hyderabad-s0O 090 Represented by itsManaging Partner V. Ravi Kumar, i.e., Petitioner no.2 2. V. Ravi Kumar, S/o. Kamaiah Naidu Vadlamudi, Aged about 4'l years,H.No.34-78-2, Vivekandapuram Colony, Near Neredemet X Roads,Sainikpuri, Secunderabad -500094H.No.34-78-2, Vivekandapuram Colony, Near Neredemet X Roads,Sainikpuri, Secunderabad -500094 3. V. Suresh Kumar, Sh. Kamai Naklu Vadamudi, Aged about 39 years, PlotNo.15, Green Avenue, Rasi Developers, Beside K.A. Sagham, Nizampet,Hyderabad-S0O 072.No.15, Green Avenue, Rasi Developers, Beside K.A. Sagham, Nizampet,Hyderabad-S0O 072. 4. Sreevidya Vadlamudi, D/o. Venkateswara Swamy Soorapaneni, Aged about32, Plot no. 15, Green Arenue, Rasil Devetopers, Beside K.A Sagham,Nizampet, Hyderabad-s00 072.32, Plot no. 15, Green Arenue, Rasil Devetopers, Beside K.A Sagham,Nizampet, Hyderabad-s00 072. 5. Swapna Vadlamudii, D/o. Brabhakar Naidu Boyapati, Aged about 38 years,34-78-2, Vivekandapuram Colony, Near Neredemet X Roads, Sainikpuri,Secunderabad -50009434-78-2, Vivekandapuram Colony, Near Neredemet X Roads, Sainikpuri,Secunderabad -500094 ...PETITIONER/ACCUSED Nos. 1 to 5 AND The Dy. Commissioner of lncome Tax, Circle-11(1), Raum Na 1012, 10thFloor, Signature Towers, Opp- Botanical Garden, Kondapur, Hyderabad ...RESPONDENTS/COMPLATNANT Petition under Section 482 of Cr.P.C praying that in the circumstancesstated in the Memorandum of Grounds of Criminal Petition, the High Court maystated in the Memorandum of Grounds of Criminal Petition, the High Court maybe pleased to quash C.C.NO.268/2017 on the fib of SPECIAL JUDGE FORECONOMIC OFFENCES AT HYDERABAD and quash the Charges under Sec.276C(2) rtw 2788 OF THE INCOME TAX ACT, 1961 against the Accused. l.A. NO:2OF 2023 Petition under Section 482 of cr.p.c praying that in the circumstancesstated in the Memorandum of Grounds of criminal petition, the High court maybe pleased to stay all the iurther proceedings in c.c.No.268 t2017 on the file ofSPECIAL JUDGE FOR ECONOMIC OFFENCES AT HYDERABAD. This Petition coming on for hearing, upon perusing the Memorandum of Grounds of criminal Petition and upon hearing the arguments of sri G. ANILKIRAN KUMAR, Advocate for thE [petitioner ]and of Sri sUNDAR| R. ptsupATl,Sr. SC for lT Department for the Respondent No. 2.Sr. SC for lT Department for the Respondent No. 2. The Gourt made the following: ORDER THE HONOURABLE SMT. JUSTICE K. SUJANACRIMINAL PETITION No. 1 1775 of 2o23 ORDER: . This Criminal Petition is frled under Section 482 of the Codeof Criminal Procedure, 1973 (for short 'Cr.P.C.J to quash theproceedings against the petitioners/accused Nos.l to 5 inC.C.No.268 of 2017, on the file of the learned Special Judge forEconomic Offences, Hyderabad, registered for the offencespunishable under Section 276 C (21 read with 278 B of the IncomeTax Act, 1961(for short the ActJ. Grounds of criminal Petition and upon hearing the arguments of sri G. ANILKIRAN KUMAR, Advocate for thE [petitioner ]and of Sri sUNDAR| R. ptsupATl,Sr. SC for lT Department for the Respondent No. 2.Sr. SC for lT Department for the Respondent No. 2. The Gourt made the following: ORDER THE HONOURABLE SMT. JUSTICE K. SUJANACRIMINAL PETITION No. 1 1775 of 2o23 ORDER: . This Criminal Petition is frled under Section 482 of the Codeof Criminal Procedure, 1973 (for short 'Cr.P.C.J to quash theproceedings against the petitioners/accused Nos.l to 5 inC.C.No.268 of 2017, on the file of the learned Special Judge forEconomic Offences, Hyderabad, registered for the offencespunishable under Section 276 C (21 read with 278 B of the IncomeTax Act, 1961(for short the ActJ. 2. Brief facts of the case are that respondent No.2lde factocomplainant, who is the Deputy Commissioner of Income Tax,Hyderabad, lodged a complaint against the petitioners/accusedNos. lto 5 stating that petitioner No. I i.e., M/s S.R.S. Projects,represented by its Managing Partner i.e., petitioner No.2, isrunning construction business etc., and petitioner Nos.2 to 5 arethe partners of petitioner No.1-Company and they are responsiblefor ttre day to day affairs of the company. On 3 1. I 1.2014, the saidcompany frled original return of income for the Assessment year2014-15 declaring the total income as Rs.Sl,7O,8 20 / - and the taxliability as per the return filed by the petitioners wasRs. 18, 16,670/-. It is further stated that the petitioners without srs,JCrl.P.No.71775 [of 2023] of [tax, Iiled ][rerurns.]Thereafter, a showmaking any [payment ]cause notice was issued by the [offrce ][of]the respondent topetitionerNo.l-Company. Basing on the [said ][complaint,]respondentNo.2 filed a charge sheet vide [C.C.No.268 ][of ][2Ol7]before thelearned Special Judge for Economic [C)ffences,]Hyderabad for the offences [punishable ][under ][Seclions ][276 ] [(21]read with 278 B of the Act. 3. Heard Sri G. Anil Kiran Kumar, [learned ][counsel appearing ][on]behalf of the petitioners as well as Ms. Sundari [R. ][Pisupati, ][learned]Senior Standing Counsel for Income [Tax appearing on behalf of ][the]respondent. 4. Irearned counsel for the petitioners submitted that [petitioner]No. t has to pay the entire tax amount of Rs. 18,16,670 l- [in]November 2014. Petitioner No. 1 was under the impression [that ][its]auditor has paid the tax amount to the [Income ][Tax ][Department.]I-.a.ter, it came to the notice of [petitioner ][No. ]I that its [auditor ][did]not pay the said amount. Then, petitioner [No. ]1 [paid]Rs.1O,0O,OOO/- and sought time for pa5rment of remaining amount.In the meantime, the offrce of respondent initiated assessmentproceedings and directed pelitioner No. 1 to Pay a sum ofRs.28,51,270 l- by way of assessment order dated 30.11.2016 andthe same was also paid on 3O.f 0.2018. [,earned counsel further submitted that it is the mistake [of ][the ]auditor of the company andthere was no willful [evasion ]of tax by [petitioner ]No.1-Company.Hence, [prayed ]the Court to [quash ]the [proceedings ]against thepetitioners. 5. In support of his submissions, learned counsel for thepetitioners relied on the Judgment of Madras High Court inMls. Bejan Singh [Ege ][Hospltal ]hrt. Ltd ts. Income [Tdx]Depdrtmentt, [wherein ][it ][is held ][in ][paragraph ][No.S, ][as follows:] "5. The issue is no longer res integra. Tle learned counxlappeaing for the [petitioner ]dreut mg attention to the [deci.sion]made bg thE Hon'ble Kamataka High Court in [Crl.P.No.4891 ]of2014, dated 14.06.2019. Tle [Hon'ble ]Kanataka [High Couft ][in]the aforesaid decision [held ][as ]follows: submitted that it is the mistake [of ][the ]auditor of the company andthere was no willful [evasion ]of tax by [petitioner ]No.1-Company.Hence, [prayed ]the Court to [quash ]the [proceedings ]against thepetitioners. 5. In support of his submissions, learned counsel for thepetitioners relied on the Judgment of Madras High Court inMls. Bejan Singh [Ege ][Hospltal ]hrt. Ltd ts. Income [Tdx]Depdrtmentt, [wherein ][it ][is held ][in ][paragraph ][No.S, ][as follows:] "5. The issue is no longer res integra. Tle learned counxlappeaing for the [petitioner ]dreut mg attention to the [deci.sion]made bg thE Hon'ble Kamataka High Court in [Crl.P.No.4891 ]of2014, dated 14.06.2019. Tle [Hon'ble ]Kanataka [High Couft ][in]the aforesaid decision [held ][as ]follows: "ln the instant case, the onlg circumstance relied.on bg the respondent in suPport of th.e [charge]leue^ed. against tLre [petitioenrs ]is tlmt, etEn tloughaccused filed the retumq Uet, it failed to [pay ][the]sell-assessrnenl tax along uith the returns. [The]circumstance euen if [accepted ][as true, ]tle [safi].€ ][daes]not constitute the [offencc und.er ][Section ][276C(2) ][of]the Act. The act [of ]filing [the ][retunls ]by [itself ][cannot]be construed as an attenpt [to ][euade ]tax [rather ][the]submission of ttrc retums uould' [suggest ][that]petitioner No-l lad uoluntdrilA d.eclared [his ]intentionto paA tax- The act of [submilting ][retun6 ][is ][not]connected. uith tle [euasion ]of [tox- ][ft is ][onlg ][an ][act]uhich is closlg [coruEcted ][with ][the intended ][crime']thol can be @nstrued. [o,s ][an ][act ][in ][attefiWt ][of ][tlle]intended offence. In the backdrop [of ][this ][legal]pnnciple, the Hon'ble Suprem-e Ca.rt in tte [case ][of]Prem Dass vs. [Income Tax ]Offuer [cited ][supra. ][t'a,s]hed tat a posititn [act on ][tle ][part ][of ][tLE ]is^cansed reqired to [be ]establistred [to bring ][fome ][tte ][charge]agdinst the rccused for [the ][olfence ][urder ][*ction]276 C [(2) ]of [the ][Act.'] 'crl.o.p.(tvto)no. [t:383 ][of ][2019 ][decidedon ][L2'03'2020] srs,JCrl.P.No.7 7775 of 2O23 6. On the other hand, learned Senior Standing Counsel forIncome Tax submitted that without paying the tax the pelitionersfiled returns and he relied upon Section 278 E of the Act, whichprovides for a statutory presumption of the culpable mental stateand contended that it is for the petitioners to establish in defencethat they did not have the culpable mental state in causing thedelay in filing the returns and paying the tax, that it can be doneonly in the course of trial and cannot be decided in a petition filedunder Section 482 Cr.P.C. Therefore, he prays for dismissal of thecriminal petition. 7. Having regard to the rival submissions made to the rival submissions made the rival submissions made submissions made by both theboth thethelearned counsel and having gone through the material available onrecord, it is to be noted that the prime allegation against thepetitioners is that without paying the tax they filed returns, assuch, the oflice of the respondent ha.s initiated assessmentproceedings and directed petitioner No.l to pay a sum ofRs.28,51,270/-. learned counsel for the petitioners has submittedthat it is tJle mistake of auditors and they are under theimpression that they paid the tax amount, as such, they frted thereturns. When it came to the notice of the petitioners, they paid theentire amount as alleged by respondent No.2. Therefore, there isno intention to evade the tax. Having regard to the rival submissions made to the rival submissions made the rival submissions made submissions made by both theboth thethe n 1' srs,J CrLP.No.11775 oJ 2O2O 8. As per the principle laid down by the Madras High Court inM/s. Bejan Slngh Ege Hospltat hrt. Ltd (Supra), a positive act onttre part of the accused is required to be established to bring homethe charge against the accused for the offence punishable underSecLion 276 C (21of the Act. Having regard to the rival submissions made to the rival submissions made the rival submissions made submissions made by both theboth thethe n 1' srs,J CrLP.No.11775 oJ 2O2O 8. As per the principle laid down by the Madras High Court inM/s. Bejan Slngh Ege Hospltat hrt. Ltd (Supra), a positive act onttre part of the accused is required to be established to bring homethe charge against the accused for the offence punishable underSecLion 276 C (21of the Act. 9. In view of the observation in the above Judgment, in tl,re caseon hand the petitioner has already paid retums wittrout paying thetax. When it comes to the notice of the petitioner, he filed taxalong with interest. Since the pelitioners have cleared the duesalong wittr interest and as there is no intention to evade the tax,the Court cannot presume culpable mental state, as such, theproceedings again st the petitioners are liable to be quashed. 10. Accordingly, ttre Criminal petiLion is allowed and theproceedings against the petitioners/accused Nos. 1 to S inC.C.No.268 of 2OlT on the lile of theSpecial Judge for EconomicOffences, Hyderabad are hereby quashed. Miscellaneous applications, if any pending, shall also standclosed.closed. Sd/. A.V.S, PRASADASSISTANT //TRUE COPY/ SECTION OFFICER To, 1. The Special [Judge for Economic ][offen@s ][at Hyderabad] 2. One CC to SRl. [G. ] [KIRAN KUMAR, Advocate ] 3. One CC to SRl. SUNDARI [PISUPATI' ][Sr SC ][for ][lncorne ][Tax ][Dept ] 4. Two CD C.opies R-;x" HIGH COURT DATED: 021A4t2024 ORDERGRLP.No.11775 of 202t ALLOWNG THEcRtMtNAl ceunou I {q),1uI -.._.ar- [:::-\]f i -,,,1. ' \()('i:..\..,'r, ,\\o-J\o0 0 i:r [:"14]rla)'/.,.:.' '.!