Ward-2, Ajmer (Raj v. Rajendra Prasad Vaish

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Criminal Appeal No. 543/1991 The Income Tax Officer, Ward-2, Ajmer (Raj.) ----Appellant Versus Rajendra Prasad Vaish, S/o Shri Banshidhar Vaish,Resident of 4, Gulraj Quarters, Nasirabad Road, District Ajmer(Raj.) ----Respondent For Appellant(s) : Mr. Siddharth Bapna, Adv.For Respondent(s): Mr. Shiv Pratap Singh Rathore, Adv. HON'BLE MR. JUSTICE ANOOP KUMAR DHAND Order 02/04/2024 Reportable 1.Present appeal has been preferred against the impugnedjudgment dated 31.08.1991, passed by the Special Magistrate(Economic Offences), Rajasthan, Jaipur by which the accused-respondent therein after referred as ‘the respondent’ has beenacquitted of the charge under Section 276 CC of the Income TaxAct, 1961 (for short “the Act of 1961”). 2.Facts in brief of the case are that the Income Tax Officerafter getting sanction from the Commissioner of Income Taxsubmitted a criminal complaint against the respondent underSection 276 CC of the Act and it was alleged that the respondentdid not submit his Income Tax Returns under Section 139(1) ofthe Act of 1961, within the stipulated time on or before31.07.1978 and the assessee filed his returns on 31.12.1980. Thereafter, proceedings under Section 271(1) of the Act of 1961,were initiated vide notice dated 31.12.1981, but the respondentfailed to submit any explanation. Then a reminder was issued butno reply was submitted. Thereafter the Income Tax Officerimposed penalty of Rs.2200/- on the respondent under Section271(1) of the Act of 1961, vide order dated 10.11.1984. 3.In support of the complaint, the appellant examined PW-1D.P Govil. Thereafter charges were framed against the respondentunder Section 276 CC of the Act of 1961. The accused-respondentdenied the charges and claimed trial. Thereafter statements ofPW-1 D.P Govil were again recorded with PW-2 H.C Nagpal.Thereafter explanation of the respondent was recorded underSection 313 Cr.P.C. The respondent denied the allegations but nodefence evidence was produced. The respondent was acquittedvide judgment dated 31.08.1991. 4.Learned counsel for the appellant submits that the allegationagainst the respondent was that a delayed income tax return,pertaining to the assessment year 1978-79 was submitted by himafter a lapse of more than 28 months and this fact has also beenestablished on the record, by way of leading evidence furnished bythe Income Tax Department. Counsel submits that under thesecircumstances there was no reason or occasion available with theTrial Court to acquit the respondent from the above charges.Counsel submits that under these circumstances interference ofthis Court is warranted. 5.Per contra, learned respondent opposed the argumentsraised by the counsel for the petitioner and submitted that though there was some delay in filing the income tax return but the delaywas neither willful nor any intention was there which attracts theprinciple of ‘mensrea’. Counsel submits that after appreciating theevidence available on the record, a cogent & reasoned judgmenthas been passed in favour of the respondent by giving him benefitof doubt. Hence under these circumstances interference of thiscourt is not warranted. 6.Heard and considered the submissions made at Bar andperused the material available on the record. 7.The sole case of the prosecution is that the respondent hasfailed to comply with the provisions contained under Section139(1) of the Act of 1961 and he has submitted the income taxreturns after a delay of 28 months which amounts to an offenceunder Section 276CC of the Act, 1961. It is relevant to extract theprovisions under Sections 139(1) and 276CC of the Act of 1961,hereunder:- “—139. Return of income. (1) Every person,— (a) being a company or a firm]; or 6.Heard and considered the submissions made at Bar andperused the material available on the record. 7.The sole case of the prosecution is that the respondent hasfailed to comply with the provisions contained under Section139(1) of the Act of 1961 and he has submitted the income taxreturns after a delay of 28 months which amounts to an offenceunder Section 276CC of the Act, 1961. It is relevant to extract theprovisions under Sections 139(1) and 276CC of the Act of 1961,hereunder:- “—139. Return of income. (1) Every person,— (a) being a company or a firm]; or (b) being a person other than a company or afirm, if his total income or the total income of anyother person in respect of which he is assessableunder this Act during the previous year exceededthe maximum amount which is not chargeable toincome-tax, shall, on or before the due date, furnish a return of hisincome or the income of such other person during theprevious year, in the prescribed form and verified in theprescribed manner and setting forth such otherparticulars as may be prescribed. 276CC. Failure to furnish returns of income. If aperson wilfully fails to furnish in due time the return offringe benefits which he is required to furnish undersub-section (1) of section 115-WD or by notice givenunder sub-section (2) of the said section or section115-WH or the return of income which he is required tofurnish under sub-section (1) of section 139 or bynotice given under clause (i) of sub-section (1) ofsection 142 or section 148 or section 153-A he shall bepunishable, (i) in a case where the amount of tax, whichwould have been evaded if the failure had notbeen discovered, exceeds one hundred thousandrupees, with rigorous imprisonment for a termwhich shall not be less than six months but whichmay extend to seven years and with fine; (ii)in any other case, with imprisonment for aterm which shall not be less than three monthsbut which may extend to two years and with fine: Provided that a person shall not be proceeded againstunder this section for failure to furnish in due time thereturn of fringe benefits under sub-section (1) ofsection 115-WD or return of income under sub-section(1) of section 139] (i) for any assessment year commencing prior tothe 1[st] day of April, 1975; or (ii) for any assessment year commencing on orafter the 1[st] day of April, 1975, if- (a) the return is furnished by him before theexpiry of the assessment year [or a return isfurnished by him under sub-section (8A) ofsection 139 within the time provided in thatsub-section]; or (b) the tax payable by such person, notbeing a company, on the total incomedetermined on regular assessment, asreduced by the advance tax or self-assessment tax, if any, paid before theexpiry of the assessment year, and any taxdeducted or collected at source, does notexceed ten thousand rupees.” 8.The above provision applies to the situations where anassessee has failed to file the return of income as regulated under (ii) for any assessment year commencing on orafter the 1[st] day of April, 1975, if- (a) the return is furnished by him before theexpiry of the assessment year [or a return isfurnished by him under sub-section (8A) ofsection 139 within the time provided in thatsub-section]; or (b) the tax payable by such person, notbeing a company, on the total incomedetermined on regular assessment, asreduced by the advance tax or self-assessment tax, if any, paid before theexpiry of the assessment year, and any taxdeducted or collected at source, does notexceed ten thousand rupees.” 8.The above provision applies to the situations where anassessee has failed to file the return of income as regulated under Section 139(1) of the Act of 1961. The proviso to Section 276CCof the Act of 1961 gives same relief to the genuine assessee. Theclause (ii)(b) of the proviso to Section 276CC of the Act of 1961provides that if the tax determined by the regular assessment hasreduced to advance tax paid and tax deducted at source does notexceed Rs3,000/-, such an assessee shall not be prosecuted fornot furnishing the return under Section 139(1) of the Act of 1961.Therefore, this proviso takes care of genuine assessee who eitherfile the returns belatedly but within the end of the assessmentyear or those who have paid substantial amounts of their tax dueby pre-paid taxes from the rigour of the prosecution under Section276CC of the Act of 1961. As per the defence set up by therespondent, as per his return the payable tax was Rs.1,279/- butthe same was in excess to the agreed assessment, hence, hisdisassessment was against the agreed assessment, therefore,treating the same as the matter finally decided, the returns weresubmitted with slight delay bonafidely and there was no ill motiveor bad intention behind it. There was no ‘mens rea’ on the part ofthe respondent in submitting the delayed returns. 9.Legislature in its wisdom by the Tax Law Amendment andMiscellaneous Provisions Act, 1986 added Section 278E to the Actw.e.f. 10[th] September, 1986. It provides that in any prosecutionfor the offence under this Act which requires “culpable mentalstate” on the part of the accused, the Court shall presume theexistence of such mental State. The burden is shifted to theaccused to prove that he had no such mental state. As per theexplanation, the culpable state would include “intention”, “motive” and “knowledge”. It further provide that the absence of suchculpable mental state shall have to be proved by the accused indefence beyond reasonable doubt. 10.For bringing home the charge against the accused for hisconviction under Section 276CC of the Act of 1961, it is essentialon the part of the Income Tax Department to prove that there waswillful attempt to evade any tax, penalty or interest chargeable.The High Court of Karnataka has dealt with this issue inCrl.R.P.No.329/2019 and has held as under:- “The gist of the offence under Section 276C(1) is thewillful attempt to evade any tax, penalty or interestchargeable or impossible or under reports of theincome. What is made punishable is “attempt to evadetax, penalty or interest” and not the “actual evasion ofthe tax”. The expression “attempt” is nowhere definedunder the Act or IPC. In legal parlance, an “attempt” isunderstood to mean “an act or movement towardscommission of an intended crime”. It is doing“something in the direction of commission of offence”.Viewed in that sense “in order to render theaccused/respondent guilty of attempt to evade tax,penalty or interest, it must be shown that he has donesome positive act with an intention to evade any tax,penalty or interest” as held by the Hon’ble SupremeCourt in PREM DAS V/s. INCOME TAX OFFICER (1999)5 SCC 241 that a positive act on the part of theaccused is required to be established to bring home thecharge against the accused for the offence undersection 276C(2) of the Act” 11.Hon’ble Supreme Court of India in the case of Suresh Kumar Agarwal Vs. Union of India reported in (2023) 146taxmann.com 27(Jharkhand), has held that when the incometax officer has levied interest on filing of the return, it must bepresumed that the income tax officer has extended the time forfiling the return after satisfying himself that there was ground fordelay in filing the return. Therefore, no sentence can be imposed under that provision unless the element of mens rea is establishedand the intention of the legislature is that the penalty should serveas a deterrant. 12.While dealing with Section 276C(2) of the Act of 1961, theHon’ble Apex Court in the case of Prem Das Vs. Income Tax Officer reported in (1999) 5 SCC 241 has held as under:- “Willful attempt to evade any tax, penalty or interestchargeable or imposable under the Act under Section276-C is a positive act on the part of the accused whichis required to be proved to bring home the chargeagainst the accused” It has been held by the Apex Court that for holding anaccused guilty under Section 276CC of the Act of 1961, ‘mens rea’is a necessary ingredient. Hence, in absence of proof of ‘mens rea’and on the basis of mere presumption under Section 132(4-A),the conviction cannot be sustained. 13.In the above case, the Hon’ble Apex Court has clearly heldthat the complainant in order to bring home the guilt of theaccused for the offence punishable under Section 276C of the Actof 1961 has to prove the mens rea of the accused for non-payment of tax or attempt to evade the tax. But in the presentcase, the accused respondent has explained the reasons, in detail,about the delay in filing the income tax returns and depositing theentire tax amount with penalty subsequently. Therefore, thecomplainant/ appellant has failed to prove that the respondenthad mens rea to evade the payment of tax. Accordingly, theIncome Tax Department has failed to prove the guilt of theaccused respondent beyond all the reasonable doubts. 14.Considering all the above factual aspects of the matter, thetrial Judge came to the conclusion that even no notice was givento the respondent prior to filing of the complaint against him.Hence, it was found that the offence under Section 276CC of theAct of 1961 was not found to be proved against the respondent. 15.It is the settled principle of law that while appreciating theevidence, in an appeal against acquittal, if the appellate Courtfinds that two views are plausible, then the view favouring theinnocence of an accused must be taken into consideration. 16.In view of the above, this Court does not find any perversityin the findings arrived at by the trial Court in acquitting theaccused under the aforesaid offences. 17.Accordingly, the instant Criminal Appeal is dismissed. Thejudgment of acquittal of the accused respondent, passed by theCourt below, is upheld. 18.The record of the Court below be sent back forthwith. Diksha/5 (ANOOP KUMAR DHAND),J