Delhi High Court
V.P. Punj vs Asst. Commisioner Of Income-Tax & ... on 3 August, 2001
Equivalent citations: 94(2001)DLT156
ORDER
S.K. Agarwal. J.
1. This petition u/s. 482 of the Criminal Procedure Code, 1973 (for short, Cr.P.C.), is directed against the order dated 26th July, 1998 passed by the Court of Sh. Ravi Kumar, Additional Sessions Judge, Delhi dismissing Revision against the order framing charge u/s. 276CC of Income Tax Act, 1962 (for short, 'the Act') in the complaint titled "Prabodha Seth Vs. Cornelia Investment Private Limited and Ors."
2. Facts in brief are: that petitioner no 3 is a company registered under the Company Act, 1956, petitioners no. 1 and 2 were its directors during the relevant period. Income Tax return of the company, for the assessment year (1990-91) was not filed within the prescribed period i.e. 31.2.1990. The return could be filed uptil 31.3.1991, under clause (a) of proviso of Section 276CC, of the Act to avoid prosecution. It was actually filed on 17.6.1991, the tax and interest thereon was also deposited. On 20th February, 1992 notice was issued to petitioners, by respondent No. 1, to show cause why prosecution under section 276CC of the Act, should not be initiated against them. The petitioners in their reply dated 27th February, 1992, informed the department that there was no "deliberate" or "willful" default. The wife of petitioner No.1 was suffering from cancer and gravely sick, therefore, the return could not be filed in time. Not satisfied with the reply, one 15th October, 1992, criminal complaint under section 276CC of the Act was filed against the petitioners alleging:-
5. "That a show cause notice why the prosecution under Section 276CC should not be launched was served upon the accused, in reply whereof, the accused submitted that there is no willful default as the wife of the one of the Director V.P. Punj died in November, 1990. The assessing officer found the explanation given by the accused after though and not tenable in law as such this complaint is being filed under section 276CC."
3. Petitioners were summoned; prosecution led pre-charge evidence and vide orders dated 9th December, 1997 the Court of Sh.M.K. Gupta, ACMM framed charge under section 276CC. Petitioners' revision against the order framing charge which was dismissed, on 26th July, 1998. Now, they have assailed the legality and validity of the order framing charge as well as the order dated 26.7.1998 dismissing their revision.
4. Learned counsel for the petitioners argued that the Income Tax return was filed voluntarily on 17th June, 1991 before the issuance of show cause notice dated 20th February, 1992 and that petitioners' not only filed the income tax return, but had also paid Rs. 61617/-, towards income tax, interest and penalty, out of total taxable income of Rs. 67370/- which by itself substantiates their bona fide. It is thus argued that there was no "deliberate" on "willful default" which is an essential ingredient of the offence. it was further argued that the allegations contained in the complaint are vague from the mere failure to file income-tax return in time, no presumption that the same 'willfully' filed late can be raised. In support of its submission reliance was placed on a decision of Calcutta High Court in Gopalji Shaw v. Income-Tax Officer, Calcutta, ITR (Vol. 173) 554 wherein it was observed "In a criminal case, it is not for the accused to establish his innocence. The onus is on the prosecution to bring home the guilt of the accused. means read is an essential ingredient of a criminal offence. The fact of extension of time to file the return excludes the element of means read inasmuch as it must be presumed that the Income-tax officer, being satisfied that there was ground for delay in filing the return, had extended the time". Learned counsel for the respondents argued to the contrary.
5. In order to appreciate the arguments reference to some of the Sections of the Act is necessary. Section 139(1) mandates that the income-tax return must be filed before due date. Section 139(8) provides that where the return is furnished after the specified date, the assessed shall be liable to pay the interest. Section 276C provides punishment for willful attempt to evade tax. Section 276CC provides punishment for "willful" failure to furnish the returns of income in due time. However, under sub-clause (a) of clause (ii) of the proviso to Section 276CC provides that such a person is not liable to be prosecuted under this Section for his failure to furnish the return by due date (a) if the return is furnished before the expiry of the assessment year or (b) if the tax payable after deduction of the advance tax etc, does not exceed Rs.3,000/-. Thus, if Section 276CC of the Act is read in isolation then mens-rea is an essential requirement of law and that it would be for the prosecution to lead evidence to prove that the return was willfully filed late. However, it is not so.
6. Legislature in its wisdom by the Tax Law Amendment and Miscellaneous Provisions Act, 1986 added Section 278E to the Act w.e.f. 10th September, 1986. It provides that in any prosecution for the offence under this Act which requires "culpable mental state" on the part of the accused, the Court shall presume the existence of such mental state. The burden is shifted to the accused to prove that he had no such mental state. As per the explanation, the culpable state would include "intention", "motive" and "knowledge". It further provides that the absence of such culpable mental state shall have to be proved by the accused in defense beyond reasonable doubt. Section 278E reads:--
Presumption as to culpable mental state. "(1) In any prosecution for any offence under this Act which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state but it shall be a defense for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution.
Explanation.- In this sub-section, "culpable mental state" includes intention, motive or knowledge of a fact or belief in, or reason to believe, a fact.
(2) For the purposes of this section, a fact is said to be proved only when the court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability."
7. By this Section the rules of evidence stand altered. In any prosecution for any offence under this Act, the Court has to presume the existence of means rea. It is for the accused to prove to the contrary and that too beyond reasonable doubt. Further the Act also does not differentiate in any way between natural or juristic person. Applying these principles to the facts of this case, admittedly the petitioner could file the return on or before 31st March, 1991 to avoid prosecution. The return was filed on 17th June, 1991. In reply to the show cause notice prior to the launching of the prosecution, petitioner No. 1 stated that his wife was suffering from cancer who died in November, 1990 and that the entire family was upset, thus the delay in filing the income tax return was not deliberate. From the reply, it cannot be inferred that the petitioners have succeeded in proving their defense beyond reasonable doubt. This is a question of fact, regarding which no finding can be recorded at the stage of framing the charge. As per the settled law, charge can be framed even on the basis of a strong suspicion. The Supreme Court in the recent decision in Smt. Om Wati and another v. State through Delhi Administration, 2001 Crl.L.J. 1723 made the following observations:-
"We would again remind the High Courts of their statutory obligation to not to interfere at the initial stage of framing the charges merely on hypothesis, imagination and far-fetched reasons which in law amount to interdicting the trial against the accused persons. Unscrupulous litigants should be discouraged from protracting the trial and preventing culmination of the criminal cases by having resort to uncalled for and unjustified litigation under the cloak of technicalities of law."
8. For the foregoing reasons, there is no merit in the petition and the same is dismissed.