Delhi District Court
Income Tax Office vs Manoj Hora on 18 December, 2024
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IN THE COURT OF MAYANK MITTAL
ADDL. CHIEF JUDICIAL MAGISTRATE (Spl. Acts)
CENTRAL, TIS HAZARI COURTS, DELHI
INCOME TAX OFFICE vs. MANOJ HORA
CC No. : 3283/201
CNR No. : DLCT02-007664-2019
Date of Institution : 28.03.2019
Name of the complainant : Income Tax Office
its registered office through
Shri Naveen Kumar, ACIT
Central Circle-05, New Delhi
Name of accused : Manoj Hora
her parentage and residence R/o G-604, Sai Baba Apartment
Sector-9, Rohini, Delhi
Offence complained of : U/s. 276C(1)/276CC of The Income
Tax Act, 1961
Date of Reservation : 31.08.2024
Date of Judgment : 19.09.2024
Plea of accused : Pleaded not guilty.
Final Judgment : Convicted u/s 276CC of IT Act and
acquitted u/s 276C(1) of IT Act
Brief facts and reasons for decision of the case:-
1 That the case of the complainant is that on AIMS module of ITBA
information was found that accused had entered into huge
transaction of money during F.Y. 2016-17 and had assessable
taxable income and notices under Section 142(1) of The Income Tax
Act, 1961 (hereinafter referred to as The Act) dated 10.03.2018 and
26.03.2018 were issued to accused which were duly served on him
for filing his return of income for the A.Y. 2017-18 on or before
31.03.2018. However, neither reply was filed by the accused nor he
bothered to file return till 31.03.2018. That proposal for prosecution
under Section 276(1) and 276CC of The Act was forwarded on
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30.08.2018 by the complainant. Thereafter, show cause notice under
Section 279(1) read with Section 276CC and 276C(1) of The Act
dated 28.11.2018 was issued to accused which was replied by
accused vide e-mail dated 07.12.2018 wherein accused had staed
that he was in the business of transportation and after suffering
losses therein he closed down the business and due to which he
could not file his return. However, the plea taken by accused was
not found satisfactory by Pr. CIT and passed sanction dated
18.02.2019 agaisnt the accused for not furnishing income tax return
willfully, hence the present complaint.
2 The recording of pre-summoning evidence was dispensed with, in
terms of proviso (a) of section 200 of The Code of Criminal
Procedure, 1973 (hereinafter called 'Cr.P.C') as the AR of
complainant was a government servant who filed the complaint in
discharge of his official duties. Vide summoning order dated
03.05.2019, the accused was summoned. Upon appearance, copy of
complaint and supporting documents were supplied to the accused.
After recording of pre-charge evidence, charge was framed against
accused on 04.01.2023 to which he pleaded not guilty and claimed
trial.
3 The complainant examined two witnesses to substantiate the
allegations levelled against the accused. Sh. Naveen Kumar as CW-
1 whereas Sh. Gaurav Sharma was examined as CW2 as follows:-
3.1 CW-1: Sh. Naveen Kumar deposed that as per information
available on AIMS module of ITBA Ex. CW 1/1 accused Manoj
Hora had entered into huge transaction of money during F.Y.
2016-17 and had taxable income. That CW-1 had taken print out
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of the tax module from his office computer system. In support
of said print out CW-1 had filed certificate under Section 65B of
The Indian Ex. CW 1/2. CW-1 further deposed that Sh. Gaurav
Sharma, DCIT, Central Circle-5 had issued notices to accused on
10.03.2018Ex. CW 1/3 and another notice under Section 142(1) of The Act dated 26.03.2018 Ex. CW 1/4 and also placed on record proof of delivery of notices is Ex. CW 1/5 after taking print out from the website of itba.incometax.gov.in. Witness in support of said print out also filed certificate under Section 65B of The Indian Evidence Act Ex. CW 1/6. CW-1 Naveen Kumar has further deposed that accused had failed to file his return of income and willfully attempted to evade the tax, hence he furnished proposal for launching prosecution vide letter dated 30.08.2018 Ex. CW 1/7 and after receiving proposal Sh. B.K. Pandya, PCIT, Central-01 issued show cause notice dated 28.11.2018 to accused Ex. CW 1/8. That accused in response to show cause notice submitted reply vide e-mail dated 07.12.2018 Ex. CW 1/9. It is further deposed that after considering the entire material and the facts of the case, as well as the reply of the accused, the PCIT, Central-01 vide sanction dated 18.02.2019 Ex. CW 1/10 sanctioned the prosecution of the accused under Section 276CC and 276C(1) of The Act and authorized CW-1 to file the present complaint Ex. Cw 1/11. CW-1 identified signature of Sh. B.K. Pandya as he was his senior and supervisory officer and seen him writing and signing in his official capacity. That accused was assessed by CW-1 under section 144 of the Act as he failed to comply with any of the CC No. 3283/2019 4 of 20 notice issued by the complainant department and had failed to file his return of income. Hence, the assessment order was passed on 31.12.2019 assessing the income of accused as Rs.1,59,24,740/- and digitally signed the assessment order Ex. CW 1/12 and also issued demand notice dated 31.12.2019 under Section 156 of The Act raising the demand of Rs.1,64,23,809/- Ex. CW 1/13.
3.1.1 CW-1 in his cross examination stated that the amount qua the claimed huge transactions was not mentioned in the complaint. (Vol. The assessment order has already been enclosed as part of the complaint, wherein the income was assessed @ Rs.1,59,24,742/-.). CW-1 admitted that they have not filed anything on record to show how the claimed income of Rs.1,59,24,742/- except the assessment order (Vol. There is detailed discussion in the assessment order and the documents which are relied upon in assessment order, are available in the official record.). CW-1 in his cross stated that he had to check from the ITD database to find out the return income of the tax payer for earlier year i.e. F.Y. 2015-2016, if the return was filed by the tax payer and further that he has to check from the records that if the accused filed his return of income for FY 2015-2016 & FY 2017-2018. (Vol. The same is not relevant for the assessment year in question.) CW-1 denied the suggestion that It is incorrect to suggest that he was intentionally avoiding giving answer to the previous question apprehending that the same will go against the prosecution story. CW-1 admitted the suggestion that there CC No. 3283/2019 5 of 20 was no reference of any company being run by the accused or that there no reference of VAT number of any company alloted to the accused. It is further admitted by witness that that complaint Ex CW1/11 was filed before the court prior to passing of assessment order & computation i.e. Ex CW1/12 and demand notice Ex CW1/13. (Vol. Assessment was completed on 31.12.2019 and at the time of filing of the present complaint, passing of assessment order was not required since the offence of not filing the return in response to the notice u/s 142(1) of IT Act had already been committed. Also there was information in possession of the department which shows that the total income of the assessee exceeded the maximum amount of income not chargeable to tax and the same constituted reasonable belief that the accused had attempted to evade taxes as envisaged under section 276C(1) of the IT Act.). CW-1 denied the suggestion that he was intentionally giving false volunteer statement just to make improvement and fill up the lacuna in the case or that the complaint has been filed pre-maturely without compliance of mandatory provisions of law. Sh. Naveen Kumar further denied the suggestion that the present complaint has been filed without there being mandatory documents / compliances. CW-1 admitted that no postal receipt of service of notice has been placed on record. (Vol. Notices has been served electronically through ITBA which is a software and valid mode of service as per Income Tax rules) or that in the complaint or in his examination in chief CC No. 3283/2019 6 of 20 he had no where stated that the accused was served the notice electronically through ITBA further that he was intentionally giving false explanations to fill up the lacuna in this regard. CW-1 further denied the suggestion that no notice dated 10.03.2018 and 26.03.2018 were sent or served upon the accused or that as no notice dated 10.03.2018 & 26.03.2018 were served on accused, no delivery proof or receipt has been filed on record. (Vol. The document ExCW1/5 is the proof of delivery.) It is wrong to suggest that ExCW1/5 is not a proof of delivery. CW-1 was put the following questions:
Q. I put it to you that in e-mail dated 07.12.2018, the accused has stated that he has appeared before Mr. Gaurav Sharma (concerned Officer) and has submitted documents and his explanation in regard to the assessment of the year 2017-2018 but there is no reference of the said meeting and submissions of document by you in the complaint. What do you have to say?
CW-1 has replied that the relied upon document is response of the accused to the Principal CIT, Central-1, Delhi in response to opportunity afforded to him before granting sanction u/s 279 of the IT Act. The sanctioning authority has considered the response of the accused before granting sanction.
CW-1 further admitted that the show cause notice Ex CW1/8 is dated 28.11.2018 and denied the suggestion that he was authorized by the PCIT-1, New Delhi vide sanction dated 18.02.2019 Ex CW1/10. CW-1 admitted that the proposal for CC No. 3283/2019 7 of 20 launching prosecution was sent by him through letter dated 30.08.2018 Ex CW1/7. Witness further denied that he had sent the proposal for prosecution without any authority and prematurely or that show cause notice dated 28.11.2018 has been issued after completion of proceedings just to fill up the lacuna or that he was not authorized in the present case to file the present complaint or to issue notices or letters or prosecution. CW-1 admitted that no bank statement of the accused was filed by him in the present case. Sh. Naveen Kumar denied the suggestion that the assessment order or the computation sheet or the demand notice has been filed on record just to fill up the lacuna or that the assessment order, computation sheet and the demand notice have been prepared malafidely after realizing the loopholes in the filing of the present complaint or that the accused has not committed any defaults or that the income tax department had not intentionally filed the documents as submitted by the accused during the meeting with Sh. Gaurav Sharma or that the assessment order, computation sheet and the demand notice have been passed / issued without there being any authentic document / bank statement / proof of income on record with the department. CW-1 further denied that it is a false case and he was deposing falsely.
3.2 CW-2: Sh. Gaurava Sharma deposed that he was posted as DCIT, Central Circle-5, Delhi and had the jurisdiction of the assessee Manoj Hora having PAN AAXPH6926M. That the case of assessee was centralized and same was within his jurisdiction CC No. 3283/2019 8 of 20 for the purpose of assessment. That accused was served with a notice under Section 142(1) of The Income Tax Act dated 10.03.2018 Ex. CW 1/3 thereby directing him to furnish his return of income for the A.Y. 2017-18. That the return of income was supposed to be filed on or before 31.03.2018, however, assessee did not file any return of income and was served with another notice dated 26.03.2018 Ex. CW 1/4 so that he can file the return of income on or before 31.03.2018. That notices were duly served through e-mail and the service of notices were done through ITBA Portal, which shows the time and delivery of the e-mail Ex. CW 1/5. CW-2 deposed that acused Manoj Hora did not file the return of income by the due date or thereafter, as he was transferred from his charge in July, 2018 and Sh. Naveen Kumar took the charge of the office.
3.2.1 CW-2 during his cross examination stated that he did not remember, if he ever had one to one meeting with accused in his official capacity. CW-2 denied the suggestion that notice under Section 142(1) of The Income Tax Act, 1961 was issued without any basis and for the said reason no document in this regard has been filed on record or that said notices were issued without applicability of mind. CW-2 stated that he could not comment whether accused had informed the department about the financial losses suffered by him during the relevant financial year. Witness further stated that he could not comment whether the accused had not filed the ITR as he had suffered financial losses. Witness denied the suggestion that he was not authorized to issue CC No. 3283/2019 9 of 20 notice under Section 142(1) of The Income Tax Act, 1961 or that the relevant document filed by accused showing his losses during the relevant financial year has not been placed on record for malafide reasons or that witness was deposing falsely.
4 Upon conclusion of post charge evidence, statement of accused was recorded u/s 313 Cr.P.C on 20.07.2024. The accused elected to lead defence evidence and examined himself in defence evidence as DW-1.
4.1 DW-1 Manoj Hora while recording his testimony has deposed that he was running a transport business since 2011-2012 for the same business, he along with his son Karan has purchased 16 trucks in total i.e. 9 commercial trucks were in the name of accused and 7 trucks were in the name of his son. That all these trucks were purchased by accused and his son by getting it financed from different financial institution. That DW-1 was an Income Tax assessee since year 2000 and was paying tax regularly and he had paid tax for more than one crore for the financial year 2011-2012 upto FY 2015-2016, but unfortunately in FY 2016-2017, he suffered huge losses and as such DW-1 had not filed the ITR for the financial year 2016-2017. That, thereafter, accused had closed his business and had not earned even a single rupee during the F.Y. 2016-2017 or any year thereafter. DW-1 further stated that he had sold off his trucks during the financial year 2016-2017 and whatever revenue was generated by selling the trucks either in cash or through banking channel was deposited in bank accounts of accused to clear the CC No. 3283/2019 10 of 20 bank loans and dues of different vendors (for petrol / diesel / salaries /repairs etc.). DW-1 further stated that he is surviving on the earning of his wife and son. That DW-1 received e-mail intimation asking him to appear before Sh. Gaurav Sharma, ACIT to appear before him and pursuant to said e-mail, accused appeared before Sh. Gaurav Sharma and submitted his entire documents showing losses during the financial year 2016-2017 and that same were taken on record by Sh. Gaurav Sharma, despite that he received the summons from this hon'ble court on the false complaint filed by Income Tax department. That present complaint is without any basis and by not filing the documents already submitted by accused. It is also worth mentioning that during F.Y. 2016-2017, he had not a single rupee and suffered losses to the tune of several lacs of rupees.
DW-1 further stated that he had not received any show cause notice and the entire story in the complaint is forged and fabricated and based upon false documents and further that he has been falsely framed in the present case and that it is a false case and he is innocent.
4.1.1 DW-1 during his cross examination admitted that he had not placed on record in court any such record showing the losses occurred to him during the relevant financial years. (Vol. I had submitted the same to Sh. Gaurav Sharma). DW-1 denied the suggestion that he was deposing falsely with respect to submission of documents to Sh. Gaurav Sharma or that it is false and concocted story made by witness to get free from the procedure of law. DW-1 admitted that he had CC No. 3283/2019 11 of 20 not placed on record before this court or Sh. Gaurav Sharma any document / agreement / receipt regarding sell of the alleged trucks. (Vol. Sh. Gaurav Sharma has never asked me the same). DW-1 denied the suggestion that Income Tax department had asked him to furnish all the relevant documents with respect to relevant financial year with his reply, which he did not furnish. DW-1 stated that he was not aware whether any assessment order in the present case has been passed by the department against him. Accused denied the suggestion that he was deliberately showing his unawareness about the assessment order in his attempt to evade the procedure of law. That wife of accused used to run boutique till 2005-2006, she was homemaker till 2018 after that. After 2018 wife of accused has been doing the work of trading of herbs and spices. That wife and son of accused filed income tax returns as per law. After showing certified copy of assessment order for F.Y. 2016-2017 Ex CW1/12 has been shown to witness, on which witness has admitted his name and three bank account numbers, however, denied the suggestion that he was having the sufficient funds and the same was deposited by him in his different accounts for the relevant financial year, however, he had deliberately not filed Income Tax return in due time as prescribed by Income Tax department. DW-1 further denied the suggestion that he had not complied the notices issued by Income Tax department or that that he had received the show cause notices and had not CC No. 3283/2019 12 of 20 replied the same or that he had deposed falsely with respect to non receiving of notices or that deposing falsely. 5 I have already heard the arguments perused the record including the written submissions and case law filed by parties. 6 During final arguments, it is submitted by Ld. SPP that present complaint has been filed against the accused person under Section 276CC of the IT Act for not filing the income tax return for annual year 2017-18 despite earning the income which is more than the maximum limit on which income tax is not payable and despite the fact that a notice under Section 142 of IT Act was issued and delivered to accused and under Section 276C(1) of IT Act for willfully attempting to evade tax. It is submitted that complainant has examined two witnesses CW-1 Sh. Naveen Kumar and CW-2 Sh. Gaurav Sharma to prove the documents relied upon by the complainant so as to prove the case of complainant. The complainant has proved all the documents and its case beyond reasonable doubt against the accused and request has been made to convict and punish the accused accordingly.
7 Ld. Counsel for accused has vehemently opposed the case of complainant and has submitted that accused is liable to be acquitted as complainant has miserably failed to prove the case against the accused person. It is submitted that complaint is bad as it is not supported by an affidavit of complainant as directed by Hon'ble Apex Court in case of Priyanka Srivastava Vs. State of Uttar Pradesh; (2015) 6 SCC 287. Further, it is submitted that complaint has not been filed by the authorised person as same is filed by Sh. B.K.S. Pandiya, though he was not authorised to file the present CC No. 3283/2019 13 of 20 complaint. The Ld. Counsel for accused has also argued that present case/complaint is a bogus complaint as there is mismatch in the date of notices and notices have been issued just to complete the formalities. It is further submitted that notices under Section 142 IT Act have been allegedly issued by Mr. Naveen Kumar, however, on the date of notice he has not even joined the office. It is submitted that in fact no notice under Section 142 of IT Act has been delivered to the accused and the proof of service has been concocted by the Department. Further, it is submitted that falsity of the case of complainant, can be inferred from the fact that assessment order has been passed later on, however, sanction has been issued, even before that. Further, it is submitted that the accused was not bound to file return of income for the annual year 2017-18 as he has suffered the huge losses in annual year 2017-18. It is submitted that complaint is liable to be dismissed both under Section 276CC and Section 276C(1) of IT Act.
8 Before proceeding ahead, the court deems it appropriate to reproduce the relevant provisions of law, which will help in deciding the case as well:
139.Return of income.
(1) Every person,--
(a) being a [company or a firm]; or
(b) being a person [other than a company or a firm], if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-
tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed Provided that a person referred to in clause (b), who is not required to furnish a return under this sub-section and residing in such area as may be specified by the Board in this behalf by notification in the Official Gazette, and who[during the previous year incurs an expenditure of fifty thousand rupees or more towards consumption of electricity or] at any time during the previous year fulfils any one of the following conditions, namely :--
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(i) is in occupation of an immovable property exceeding a specified floor area, whether by way of ownership, tenancy or otherwise, as may be specified by the Board in this behalf; or
(ii) is the owner or the lessee of a motor vehicle other than a two-wheeled motor vehicle, whether having any detachable side car having extra wheel attached to such two-wheeled motor vehicle or not; or
(iii)[***]
(iv) has incurred expenditure for himself or any other person on travel to any foreign country;or
(v)n is the holder of a credit card, not being an "add-on" card, issued by any bank or institution; or
(vi)is a member of a club where entrance fee charged is twenty-five thousand rupees or more, shall furnish a return, of his income[during any previous year ending before the 1st day of April, 2005], on or before the due date in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed:
Provided further that the Central Government may, by notification in the Official Gazette, specify the class or classes of persons to whom the provisions of the first proviso shall not apply:
Provided also that every company[or a firm] shall furnish on or before the due date the return in respect of its income or loss in every previous year :
[Provided also that a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6,who is not required to furnish a return under this sub-section and who atany time during the previous year,--
(a) holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India or has signing authority in any account located outside India; or
(b) is a beneficiary of any asset (including any financial interest in any entity) located outside India, shall furnish, on or before the due date, a return in respect of his income or loss for the previous year in such form and verified in such manner and setting forth such other particulars as may be prescribed:
Provided also that nothing contained in the fourth proviso shall apply to an individual, being a beneficiary of any asset (including any financial interest in any entity) located outside India where, income, if any, arising from such asset is includible in the income of the person referred to in clause (a) of that proviso in accordance with the provisions of this Act;] Provided also that every person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, whether incorporated or not, or an artificial juridical person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year, without giving effect to the provisions of section 10Aorsection 10Borsection 10BAor Chapter VI-A exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed.CC No. 3283/2019
15 of 20 Explanation 1.--For the purposes of this sub-section, the expression "motor vehicle"
shall have the meaning assigned to it in clause (28) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988).
Explanation 2.--In this sub-section, "due date" means,--(a)where the assessee [other than an assessee referred to in clause (aa)] is--(i)a company [***]; or (ii) a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; or(iii)a working partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force,the [30th day of September] of the assessment year;1Substituted with effect from April 1. 2016 276C. (1) If a person wilfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable [or imposable, or under reports his income,] under this Act, he shall, without prejudice to any penalty that may be [or imposable, or under-reports his income,] on him under any other provision of this Act, be punishable,-
(i) in a case where the amount sought to be evaded [or tax on under-reported income] exceeds [twenty-five] hundred thousand rupees], with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine;
(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to [two years] and with fine.............."
"276CC. Failure to furnish return of income.- If a person wilfully fails to furnish in due [the return of fringe benefits which he is required to furnish under sub-section (1) of Section 115WD or by notice given under Sub-section (2) of the said section or section 115WH or] time the return of income which he is required to furnish under sub-section (1) of section-139 or by notice given under [clause (i) of sub-section (1) of Section 142] or [section 148 or section 153A], he shall be punishable,--
(i) in a case where the amount of tax, which would have been evaded if the failure had not been discovered, exceeds [twenty-five hundred thousand rupees], with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine;
(ii) in any other case, with imprisonment of 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 due time the [return of fringe benefits under sub-section (1) of Section 115WD or return of income under sub-section (1) of section-139]--
(i) for any assessment year commencing prior to the 1st day of April, 1975; or ( ii) 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; or
(b) the tax payable by him on the total income determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source, does not exceed three thousand rupees.]"
9 From the consideration of arguments advanced and from the perusal of record, it can be noted that present complaint has been filed on behalf of the Income Tax Department by Sh. Naveen Kumar, the CC No. 3283/2019 16 of 20 then ACIT. The perusal of sanction order EX. CW-1/10 shows that he has been authorised for filing the present complaint by the sanctioning authority Sh. B.K.S Pandiya, the then Principal Commissioner of Income Tax in his name as well as designation. The court does not see any defect in the present complaint on the ground that complainant was not authorised to file the present complaint. As far as the non-filing of the affidavit supporting the present complaint is concerned, Cr.P.C does not mandates supporting of a complaint under Section 200 Cr.P.C by affidavit of the complainant. Hon'ble Apex Court in Priyanka Srivastava (supra) (relied upon Ld. Counsel for accused) has directed that the filing of application under Section 156(3) Cr.P.C should be supported by affidavit of applicant. However, the said direction as well as finding is limited to the filing of the application under Section 156(3) Cr.P.C only. The Hon'ble Apex Court has not directed the filing of affidavit along with complaint. The relevant portion of judgment is hereby quoted:
27. In our considered opinion, a stage has come in this country where Section 156(3) Cr.P.C. applications are to be supported by an affidavit duly sworn by the applicant who seeks the invocation of the jurisdiction of the Magistrate. That apart, in an appropriate case, the learned Magistrate would be well advised to verify the truth and also can verify the veracity of the allegations. This affidavit can make the applicant more responsible. We are compelled to say so as such kind of applications are being filed in a routine manner without taking any responsibility whatsoever only to harass certain persons. That apart, it becomes more disturbing and alarming when one tries to pick up people who are passing orders under a statutory provision which can be challenged under the framework of said Act or under Article 226 of the Constitution of India. But it cannot be done to take undue advantage in a criminal court as if somebody is determined to settle the scores. We have already indicated that there has to be prior applications under Section 154(1) and 154(3) while filing a petition under Section 156(3). Both the aspects should be clearly spelt out in the application and necessary documents to that effect shall be filed. The warrant for giving a direction that an the application under Section 156(3) be supported by an affidavit so that the person making the application should be conscious and also endeavour to see that no false affidavit is made. It is because once an affidavit is found to be false, he will be liable for prosecution in accordance with law. This will deter him to casually invoke the authority of the Magistrate under Section 156(3). That apart, we have already CC No. 3283/2019
17 of 20 stated that the veracity of the same can also be verified by the learned Magistrate, regard being had to the nature of allegations of the case. We are compelled to say so as a number of cases pertaining to fiscal sphere, matrimonial dispute/family disputes, commercial offences, medical negligence cases, corruption cases and the cases where there is abnormal delay/laches in initiating criminal prosecution, as are illustrated in Lalita Kumari are being filed. That apart, the learned Magistrate would also be aware of the delay in lodging of the FIR.
Offence of not filing of Income Tax Return under Section 276CC of IT Act:-
10 From the perusal of record and consideration of submissions, it can be noted that accused was required to furnish his return of income as per Section 139(1) of the IT Act upto 31.07.2017 for the annual year 2017-18, however, the accused had not furnished its return within time prescribed as per Section 139(1) of IT Act despite the fact that as per information received by the Department, there has been huge transaction of cash deposit in his account during the FY 2016-17.
The record shows that two notices 10.03.2018 and 26.03.2018 under Section 142 of IT Act had been served on accused through email by the ITBA module of the Income Tax Department. Though, accused has denied receiving of any such notices, however, CW-1/5 filed on behalf of complainant clearly shows that these notices have been delivered to the accused on his email ID provided by him to the Department. In fact, accused has admitted receiving of a later email on the same email ID to which he had also filed reply. From the perusal of record, there is no iota of doubt that notice under Section 142 of IT Act had been delivered to the accused through email. 11 The question to be considered by this Court at this stage is whether accused can be exonerated from his liability to file income tax return merely on the ground that he had suffered losses in the relevant assessment year, despite the fact that two notices under Section CC No. 3283/2019 18 of 20 142(1) had been issued and delivered to the accused as per law. On a plain reading of Section 276CC, it is noted that in case of non-filing of return as per Section 139(1) of IT Act, the proviso provides exoneration to the assessee in some cases mentioned therein, however, where notice has been served under Section 142(1) of IT Act, there is no saving from the applicability of penal provisions of Section 276CC of IT Act in case of non-filing of return of income within the time limit mentioned in notice under Section 142(1) of IT Act.
12 In the case at hand, the court has found as mentioned above that notices under Section 142 of IT Act dated 10.03.2018 and 26.03.2018 requiring the accused to file return of income by 31.03.2018 have been delivered to the accused through email, however, admittedly accused has not filed return of income by 31.03.2018 or any time afterwards. The alleged losses suffered by accused or any other ground does not come to the rescue of accused in case of non-filing of return on service of notice under Section 142 of IT Act. From the above discussion, the complainant has been able to prove the guilt of accused beyond reasonable doubt under Section 276CC of IT Act in non-filing of return, despite service of notice under Section 142 of IT Act.
Offence of willful attempt to evade tax under Section 276C(1): 13 The case of complainant under Section 276C(1) of IT Act against the accused is that accused has not filed the return of income under Section 276CC of IT Act so as to evade the taxes payable to the Department. It is submitted on behalf of complainant that as per information received from the banks of the accused, he had made a CC No. 3283/2019 19 of 20 cash deposit of Rs.1,31,23,867/- however, for reasons best known to the accused, he had not file the return of income. It is submitted that accused has not filed return of income despite service of notice under Section 142 of IT Act. It has been argued on behalf of accused that the cash deposit has been done by the accused as he had suffered losses in transportation business and sold his trucks to make payment to his creditors. It is submitted that the proceed of sale of trucks has been deposited in the account by the accused and it was not his income.
14 It is noted that for proving the allegations against the accused under Section 276C(1) of IT Act, no additional fact has been brought on record by the complainant. The complainant is merely relying upon the fact of non-filing of return by the accused to assert that return has not been filed by the complainant to conceal his income and evade the taxes. It is important to point out that in cases of willfully attempt to evade tax under Section 276C(1) of IT Act, apart from the mere non-disclosure of income, some overt act is required to be proved to prove that act of accused is willful so as to fall within Section 276C(1) of IT Act. The presumption under Section 278E of IT Act shall be applicable only on proving the foundational overt act on the part of accused. The Hon'ble Apex Court in Prem Dass vs. ITO (1999) 236 ITR 683 has observed :
"Wilflful attempt to evade any tax, penalty or interest chargeable or imposable under the Act under Section 276C is a positive act on the part of the accused which is required to be proved to bring home the charge against the accused. Similarly a statement made by a person in any verification under the Act can be an offence under Section 277 if the person making the same either knew or believe the same to be false or does not believe to be true. Necessary mensrea, therefore, is required to be established by the prosecution to attract the provisions of Section 277. We see nothing in Section 132(4)(A) which would establish the ingredients of aforesaid two criminal offence contemplated under Sections 276C and 277 of the Indian Income Tax Act. It may be noticed at this point of time that the Tribunal while interfering with the penalty CC No. 3283/2019 20 of 20 imposed under section 271(1)© of the Act came to a positive finding that there is no act of concealment on the part of the assessee and he had returned the income on estimate basis. The Tribunal, further found that it is a case purely on difference of opinion as to the estimates and not a case of concealment of income or even furnishing of inaccurate particulars of income."
15 As discussed above, the complainant has not brought on record any overt act or positive act on the part of accused so as to prove willful attempt to evade tax by the accused. In the absence of any such positive act on the part of accused, it cannot be concluded that there was any concealment of income on the part of accused. 16 Accordingly, the complainant could not prove its case of willful attempt to evade tax against accused under Section 276C(1) of IT Act.
17 On the basis of above discussion, the accused is convicted under Section 276CC of IT Act for non-furnishing return of income despite service of notice under Section 142 of IT Act. Accused is acquitted for offence under Section 276C(1) of IT Act for attempt to evade tax.
Announced in Open Court on 18th December, 2024 MAYANK MITTAL ACJM(Special Acts), CENTRAL TIS HAZARI COURTS DELHI This judgment consists of 20 pages and each and every page of this judgment is signed by me.
Digitally signed by MAYANK MAYANK MITTAL
MITTAL Date:
2024.12.18
17:27:05 +0530
CC No. 3283/2019