Punjab-Haryana High Court
Income-Tax Officer vs Mukesh Kumar on 22 October, 2001
Equivalent citations: [2002]254ITR409(P&H)
Author: Ashutosh Mohunta
Bench: Ashutosh Mohunta
JUDGMENT
1.The Income-tax Officer, Jalandhar, filed a complaint under Section 276CC of the Income-tax Act, 1961, against the respondent. The Cheif Judicial Magistrate after examination of the evidence has found that "the complainant has utterly failed to prove on file that the notice exhibit P-3 under Section 148 of the Income-tax Act was ever served... upon the accused". Thus, the assessee was acquitted of the charge. Aggrieved by the order, the Revenue has filed this petition for the grant of leave to appeal.
2. Mr. Sawhney, learned counsel for the petitioner, contends that the departmental authorities had held the respondent-assessee guilty of delay in filing the return. A penalty had been imposed. The order had attained finality. Thus, the court could not have gone into the question of service of the notice.
3. A perusal of the order passed by the Chief Judicial Magistrate, Jalandhar, shows that the complaint had been filed in respect of the assessment year 3976-77. The assessee had initially filed his return on August 28, 1976. He had not mentioned the income from the house property. Proceedings under Section 147 were initiated against him. A notice under Section 148 of the Act was allegedly sent to him on March 22, 1980. The assessee had filed a return on December 15, 1980. Even in this return he had declared a net loss of Rs. 20,930. It is in this situation that it was alleged that there was a delay of seven months in filing the return after the service of the notice under Section 148 of the Act. Was the notice actually served as alleged ?
4. Mr. Sawhney contends that the findings recorded by the Revenue were binding on the trial court. Is it so ?
5. Section 276CC of the Act provides as under :
"If a person wilfully fails to furnish in due time the return of income which he is required to furnish under Sub-section (1) of Section 139 or by notice given under Sub-section (2) of Section 139 or Section 148, he shall be punishable ..."
6. Thus, the penal consequences of punishment under Section 276CC can ensue only when it is proved as a fact that the assessee has wilfully failed to furnish the return in due time after service of notice under Section 148 of the Act. The service of notice is a condition precedent before proceeding to punish the assessee under the aforesaid provision. The provision does not envisage that the finding recorded by the Assessing Officer or any other authority would be binding on the court. Equally, the provision also does not show that once a penalty is imposed for delay in filing the return, the trial court shall be bound by that order. At best, the orders passed by the authorities under the Act may be evidence. However, the findings cannot be said to be conclusive and binding. That would reduce the trial to a formality. It cannot be so. The factum of service of notice under Section 148 of the Act has to be clearly and categorically established by the complainant.
7. What is the position in the present case ?
8. On a thorough examination of the evidence the trial court has found that on a perusal of the alleged notice which was produced as exhibit P-3 "it is not clear who has signed, as to on whom he has effected the service of the notice". Still further, it has been observed that there was no endorsement to show that "the said notice was entrusted to Tarsem Lal by any of the officials of the Income-tax Department to get service effected upon the accused Mukesh Kumar. There is nothing on file that Subash Chander was ever authorised by Mukesh Kumar to receive the said notice". Even at the hearing today, nothing has been pointed out to show that merely because Subash Chander was working as a chartered accountant for the assessee he had the authority to accept notice on behalf of Mukesh Kumar or that service of notice on the accountant shall be deemed to be service on the assessee. If the contention of Mr. Sawhney is accepted, the result can be unfair. The accountant may be negligent. He may not even inform the assessee. Yet, he would be liable.
9. The court has come to a positive conclusion that the notice under Section 148 of the Act is not proved to have been served on the assessee. In fact, even on the Department's own showing, it was served only on Subash Chander. In this situation, we find that the view taken by the learned trial court was a possible one. In any case, it was not perverse. It is not contrary to the evidence on record. Thus, no ground for the grant of leave is made out.