Jharkhand High Court
Gunwant Singh Saluja vs The State Of Jharkhand on 29 August, 2023
Author: Sanjay Kumar Dwivedi
Bench: Sanjay Kumar Dwivedi
1 [Cr.M.P. No. 1245 of 2017]
IN THE HIGH COURT OF JHARKHAND, RANCHI
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Cr.M.P. No. 1245 of 2017
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1.Gunwant Singh Saluja
2.Balvinder Singh Saluja alias Balvinder Singh .... Petitioners
-- Versus --
1.The State of Jharkhand
2.Union of India .... Opposite Parties
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CORAM: HON'BLE MR. JUSTICE SANJAY KUMAR DWIVEDI
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For the Petitioners :- Mr. Sumeet Gadodia, Advocate Mr. Ranjeet Kushwaha, Advocate Mr. Prakash Narayan, Advocate For the Income-tax Deptt.:- Mr. R.N. Sahay, Sr.S.C. Mr. Anurag Vijay, Jr.S.C. For the State :- Mrs. Priya Shrestha, Spl.P.P.
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8/29.08.2023 Heard Mr. Sumeet Gadodia, the learned counsel appearing on behalf of the petitioners, Mr. R.N. Sahay, the learned counsel appearing on behalf of the respondent-Income Tax Department (UOI) and Mrs. Priya Shrestha, the learned counsel appearing on behalf of the respondent State.
2. This petition has been filed for quashing of the entire criminal proceeding arising out of Complaint Case No.08 of 2012, including the order taking cognizance dated 07.09.2012 passed by learned Special Judge, Economic Offences, Ranchi whereby cognizance has been taken under section 276 CC of the Income Tax Act, 1961, pending in the court of learned Special Judge, VII, Economic Offences, Ranchi.
3. The complaint case has been filed alleging therein that a complaint case being Complaint Case No. 08 of 2012 has been filed by 2 [Cr.M.P. No. 1245 of 2017] Opposite Party No.2 against one M/s Santpuria Alloys Pvt. Ltd., in which the present petitioners are Directors. In the said complaint case, commission of offence under section 276 CC has been alleged on the following allegations:-
(i) It has been alleged that a search under section 132 of the Income Tax Act was undertaken in Mongia Group of cases by the Investigation Wing, Jharkhand and during the course of search operation, various incriminating documents relating to M/s Santpuria Alloys Pvt. Ltd, were found and seized.
(ii) It has been further alleged that notices under section 153A of the Income Tax Act for filing of returns of income for the Assessment Years 2005-06 to 2009-10 and 2010-11 were issued by the Assistant Commissioner of Income Tax, Central Circle, Dhanbad and the same were served on 15.02.2011 for compliance within 30 days from the receipt of the notice.
(iii) It has been further alleged that the assessee- company, on 15.02.2011, had requested for the copy of the stock statement during the search and survey operation, which was duly provided to the Assessee-company on 16.03.2011.
(iv) It has been further alleged that after providing the aforesaid document, the Assessee-company was requested to furnish returns by 15.04.2011 but there was no compliance. Again, a letter dated 25.04.2011 was issued for submitting returns, but there was no compliance.
(v) It has been further alleged that under the aforesaid circumstances the Assessing Officer issued a show cause notice on 19.07.2011 under section 276CC of the Income Tax Act for initiation of proceeding for non-filing of return but there was no reply to the said show cause notice.
(vi) While proposal for initiating proceeding under section 276CC was under active consideration, the Assessing Officer of the Assessee-company reported, vide its letter dated 30.09.2011, that the Assessee-company had filed its returns of income for the Assessment Years in question.
(vii) It has been alleged that after carefully 3 [Cr.M.P. No. 1245 of 2017] considering the facts of the case, the sanctioning authority i.e. Commissioner of Income Tax, Central, Patna accorded sanction for prosecution against the Assessee-company under section 279 of the Income Tax Act, vide his order dated 08.12.2011.
(viii) In view of the aforesaid facts and circumstances, it has been alleged that the Assessee- company has willfully committed offence under section 276CC of the Income Tax Act as it has not filed its returns of income within the statutory period without reasonable cause.
(ix) On the basis of the aforesaid allegations, Complaint Case No. 08 of 2012 has been filed by Opposite Party No.2 in the court of learned Special Judge, Economic Offence, Ranchi.
4. Mr. Gadodia, the learned counsel appearing on behalf of the petitioners submits that a search and seizure operation under section 132(1) of the Income Tax Act, 1961 was carried out in business as well as residential premises of Mongia Group of Companies on 16.09.2009. He submits that notices under section 153A of the said Act and filing of the return of income tax of assessment years 2005-06 to 2010-11 was issued by the Income Tax Department, Dhanbad on 15.02.2011. The assesse company namely M/s Santpuria Alloy Private Limited requested for copy of stock statement of search and seizure operation and the same was provided to the assesse company on 16.3.2011. On 15.04.2011, notices issued under section 142(1) and 153(C), however, the same has not been complied. Notices issued on 25.4.2011 for submitting the returns by 05.05.2011 but the same was not complied by the assessee company. On 19.07.2021, a show cause notice under section 276 CC of the said Act was issued by the assessing officer to M/s Santpuria Alloys Private Limited which was not complied with. The assessee company filed return for the period 2005-06 and 2010-11 on 22.8.2011, 02.09.2011 and 20.09.2011 respectively. He submits that despite after filing of the returns the assessing officer submitted a proposal by letter dated 4 [Cr.M.P. No. 1245 of 2017] 30.09.2011 for initiation of prosecution. He submits that the assessing officer itself informed the Commissioner of Income Tax, Central, Patna that the assessee has filed its returns and said communication was made by letter dated 14.10.2011. He submits that inspite of that, the sanction was accorded under section 279 of the Income Tax Act by Commissioner of Income Tax, Central, Patna on 08.12.2011. He submits that on 31.01.2012 the complaint case no.08 of 2012 was filed by the O.P.no.2. He further submits that the said complaint was filed only against the assessing company namely M/s Santpuria Alloys Private Limited and the Directors were not impleaded as accused and the petitioners were not the accused. However, on 04.06.2012, an application was filed by learned lawyer appearing for the complainant giving details of present petitioners for being impleaded as an accused in the complaint petition and on the strength of the said application, on 07.09.2012 the petitioners were made accused. He submits that the learned court has been pleased to take cognizance on 07.09.2012. He submits that by way of Annexure-R/J-1 series in the rejoinder filed by the petitioners, the assessment to the tune of Rs.70,65,88/- for the assessment years 2005-06 to 2010-11 was made. He submits that the said assessment order passed by the assessing officer was challenged before the Commissioner of Income Tax (Appeal)-III, Patna and vide order dated 24.09.2015 the assessment order for the assessment years 2005-06, 2006-07, 2007-08 and 2008-09 allowed by the appellate authority. He submits that since the amount for the period 2009-10 was 'nil', there was no occasion to file any appeal. He further submits that for assessment year 2010-11 the Commissioner of Income Tax allowed the appeal in part by order dated 04.03.2014. He further submits that the assessing company namely Santpuria Alloys Private Limited challenged the appellate order before the Income Tax Appellate Tribunal (ITAT), Ranchi Bench, Ranchi and by order dated 28.02.2018 the appeal was allowed and full relief was granted to the 5 [Cr.M.P. No. 1245 of 2017] petitioners. He submits that since no additional tax liability was fastened upon the assessee company namely M/s Santpuria Alloys Private Limited on 23.09.2019 the said company filed application for compounding of the offence. He further submits that for compounding of the offence, the arbitrary figure was provided by the Income Tax Department to the tune of Rs.1,00,31,800/- and for that, the company objected and they were not ready to pay the said compounding amount as it was arbitrary. He submits that in this background when the tax was already been paid and in the proceeding no penalty was assessed against the petitioners and in view of section 278(B) of the said Act, the role of the Directors has not been made in the complaint petition and there is no averment to that effect. No case is made out. In view of this, the entire criminal proceeding may kindly be quashed.
5. On the other hand, Mr. Sahay, the learned counsel appearing on behalf of the respondent Income Tax Department submits that a show cause notice was already issued to the petitioners. He submits that if the case under section 276 CC of the said Act is made out, the case can go on as has been held by the Hon'ble Supreme Court in the case of Sasi Enterprises v. Assistant Commissioner of Income Tax, (2014) 5 SCC 139 and relied on paragraph nos.28, 29, 30 and 32 of the said judgment, which are quoted below:
"28. We have indicated that on failure to file the returns by the appellants, the Income Tax Department made a best judgment assessment under Section 144 of the Act and later show-cause notices were issued for initiating prosecution under Section 276-CC of the Act. The proviso to Section 276-CC nowhere states that the offence under Section 276-CC has not been committed by the categories of assessees who fall within the scope of that proviso, but it is stated that such a person shall not be proceeded against. In other words, it only provides that under specific circumstances subject to the proviso, prosecution may not be initiated. An assessee who comes within clause (ii)(b) to the proviso, no doubt has also committed the offence under Section 276-CC, but is exempted from prosecution since the 6 [Cr.M.P. No. 1245 of 2017] tax falls below Rs 3000. Such an assessee may file belated return before the detection and avail the benefit of the proviso. The proviso cannot control the main section, it only confers some benefit to certain categories of assessees. In short, the offence under Section 276-CC is attracted on failure to comply with the provisions of Section 139(1) or failure to respond to the notice issued under Section 142 or Section 148 of the Act within the time-limit specified therein.
29. We may indicate that the above reasoning has the support of the judgment of this Court in Prakash Nath Khanna [Prakash Nath Khanna v. CIT, (2004) 9 SCC 686] . When we apply the above principles to the facts of the case in hand, the contention of the learned Senior Counsel for the appellant that there has not been any wilful failure to file their return cannot be accepted and on facts, offence under Section 276-CC of the Act has been made out in all these appeals and the rejection of the application for the discharge calls for no interference by this Court.
30. We also find no basis in the contention of the learned Senior Counsel for the appellant that pendency of the appellate proceedings is a relevant factor for not initiating prosecution proceedings under Section 276-CC of the Act. Section 276-CC contemplates that an offence is committed on the non-filing of the return and it is totally unrelated to the pendency of assessment proceedings except for the second part of the offence for determination of the sentence of the offence, the Department may resort to best judgment assessment or otherwise to past years to determine the extent of the breach. The language of Section 276-CC, in our view, is clear so also the legislative intention. It is trite law that as already held by this Court in B. Premanand v. Mohan Koikal [(2011) 4 SCC 266 : (2011) 1 SCC (L&S) 676] that: (SCC p. 272, para 19) "19. '19. It is a well-settled principle in law that the court cannot read anything into a statutory provision which is plain and unambiguous. The language employed in a statute is the determinative factor of legislative intent. ...' *Ed.: As observed in Shiv Shakti Coop. Housing Society v. Swaraj Developers, (2003) 6 SCC 659, p. 669, para 19.+ "
If it was the intention of the legislature to hold up the prosecution proceedings till the assessment proceedings are completed by way of appeal or otherwise the same would have been provided in Section 276-CC itself. Therefore, the contention of the learned Senior Counsel for the appellant that no prosecution could be initiated till the culmination of assessment proceedings, especially in a case where the appellant had not filed the return as per Section 139(1) of the 7 [Cr.M.P. No. 1245 of 2017] Act or following the notices issued under Section 142 or Section 148 does not arise.
32. Section 278-E deals with the presumption as to culpable mental state, which was inserted by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986. The question is on whom the burden lies, either on the prosecution or the assessee, under Section 278-E to prove whether the assessee has or has not committed wilful default in filing the returns. The Court in a prosecution of offence, like Section 276-CC has to presume the existence of mens rea and it is for the accused to prove the contrary and that too beyond reasonable doubt. Resultantly, the appellants have to prove the circumstances which prevented them from filing the returns as per Section 139(1) or in response to notices under Sections 142 and 148 of the Act."
6. Relying on this judgment, he submits that the case of the petitioners is fit to be rejected. He further submits that the penal provisions are required to be considered strictly and literally as has been held in the case of U.S. Technologies International Pvt. Ltd. v. Commissioner of Income Tax, 2023 SCC OnLine SC 387 and he relied on paragraph no.30 of the said judgment, which is quoted below:
"30. As per Section 271C(1)(a), if any person fails to deduct the whole or any part of the tax as required by or under the provisions of Chapter XVIIB then such a person shall be liable to pay by way of penalty a sum equal to the amount of tax which such person failed to deduct or pay as aforesaid. So far as failure to pay the whole or any part of the tax is concerned, the same would be with respect to Section 271C(1)(b) which is not the case here. Therefore, Section 271C(1)(a) shall be applicable in case of a failure on the part of the concerned person/assessee to "deduct" the whole of any part of the tax as required by or under the provisions of Chapter XVIIB. The words used in Section 271C(1)(a) are very clear and the relevant words used are "fails to deduct." It does not speak about belated remittance of the TDS. As per settled position of law, the penal provisions are required to be construed strictly and literally. As per the cardinal principle of interpretation of statute and more particularly, the penal provision, the penal provisions are required to be read as they are. Nothing is to be added or nothing is to be taken out of the penal provision. Therefore, on plain reading of Section 271C of the Act, 1961, there shall not be penalty leviable on belated remittance of the TDS after the same is 8 [Cr.M.P. No. 1245 of 2017] deducted by the assessee. Section 271C of the Income Tax Act is quite categoric. Its scope and extent of application is discernible from the provision itself, in unambiguous terms. When the non-deduction of the whole or any part of the tax, as required by or under the various instances/provisions of Chapter XVIIB would invite penalty under Clause 271C(1)(a); only a limited text, involving sub-section (2) of Section 115O or covered by the second proviso to Section 194B alone would constitute an instance where penalty can be imposed in terms of Section 271C(1)(b) of the Act, namely, on non-payment. It is not for the Court to read something more into it, contrary to the intent and legislative wisdom."
7. He further refers to section 278(B) of the Income Tax Act, 1961, and he submits that when the company is the offender, every person who is in-charge of the company are liable to be prosecuted. He submits that in view of that, the petitioners have been rightly prosecuted and this Court may not interfere at this stage and submits that the case is fit to be rejected.
8. In view of the above submission of the learned counsel for the parties, the Court has gone through the materials on record, including the contents of the complaint case, the order taking cognizance, the counter affidavit of the Income Tax Department and the rejoinder to the counter affidavit filed by the petitioners as well as the reply to the rejoinder filed by the Income Tax Department.
9. It is an admitted fact that for not filing the returns from 2005-06 to 2010-11, the present case has been filed. It is further an admitted fact that the return was filed by the petitioners on 22.8.2011, 02.09.2011 and 20.09.2011 respectively. However, the proposal for prosecution was initiated on 30.09.2011. The same was also informed by the assessing officer about the filing of the return by the petitioners to the Commissioner of Income Tax, Central, Patna, however, by order dated 08.12.2011 the sanction for prosecution under section 279 of the Income Tax Act was given against the petitioners. It is further the admitted facts- that the assessment order passed by the assessing officer 9 [Cr.M.P. No. 1245 of 2017] was challenged before the Commissioner of Income Tax (Appeal)-III, Patna and vide order dated 24.09.2015 the assessment order for the assessment years 2005-06, 2006-07, 2007-08 and 2008-09 allowed by the appellate authority and since the amount for the period 2009-10 was 'nil', there was no occasion to file any appeal. For assessment year 2010- 11 the Commissioner of Income Tax allowed the appeal in part by order dated 04.03.2014 and the assessee company namely Santpuria Alloys Private Limited challenged the appellate order before the Income Tax Appellate Tribunal (ITAT), Ranchi Bench, Ranchi and by order dated 28.02.2018 the appeal was allowed and full relief was granted to the petitioners. Thus, in view of the subsequent orders passed by the competent authority under the said Act, it appears that no additional tax liability was fastened upon the assessing company namely M/s Santpuria Alloys Private Limited.
10. In the above background, it appears that the tax was already deposited and thereafter, the prosecution has been initiated. This is not a case that after initiation of the prosecution the tax has been deposited. Further, in view of the subsequent orders passed by the competent authority, there is no tax liability against the petitioners who happened to be Directors of M/s Santpuria Alloys Private Limited. Looking into the averments made in the complaint petition, there is no disclosure of the fact as to how these two petitioners were looking into the day to day affairs of the company and section 278B of the said Act speaks of offences by the company whereas the liability has been fastened upon the person who is looking to day to day affairs of the company. If such mandate is there, and the prima facie role of the Directors or the persons who are looking into day to day affairs of the company is required to be disclosed in the complaint petition itself, which is lacking in the case in hand. Further even the petitioners have not been made accused in the complaint case, however, by way of the information provided along with 10 [Cr.M.P. No. 1245 of 2017] the letter, learned court has added these petitioners as accused in the complaint and the role how these petitioners are looking into the day to day affairs of the company is not disclosed and the requirement of disclosing the role with regard to day to day affairs of the company is one of the mandatory requirement, in view of the judgment of Hon'ble Supreme Court in the case of Sushil Sethi and Another v. State of Arunachal Pradesh and Others, (2020) 3 SCC 240 and the same was held in paragraph no.8.2 of the said judgment, which is quoted below:
"8.2. It is also required to be noted that the main allegations can be said to be against the company. The company has not been made a party. The allegations are restricted to the Managing Director and the Director of the company respectively. There are no specific allegations against the Managing Director or even the Director. There are no allegations to constitute the vicarious liability. In Maksud Saiyed v. State of Gujarat [Maksud Saiyed v. State of Gujarat, (2008) 5 SCC 668 : (2008) 2 SCC (Cri) 692] , it is observed and held by this Court that the Penal Code does not contain any provision for attaching vicarious liability on the part of the Managing Director or the Directors of the company when the accused is the company. It is further observed and held that the vicarious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute. It is further observed that the statute indisputably must contain provision fixing such vicarious liabilities. It is further observed that even for the said purpose, it is obligatory on the part of the complainant to make requisite allegations which would attract the provisions constituting vicarious liability. In the present case, there are no such specific allegations against the appellants being Managing Director or the Director of the company respectively. Under the circumstances also, the impugned criminal proceedings are required to be quashed and set aside."
11. The question remains that if the penalty has been struck off, whether a criminal case can survive or not, and this aspect of the matter was considered by the Hon'ble Supreme Court in the case of K.C. Builders and Another v. Assistant Commissioner of Income Tax, 2004 265 ITR 562 (SC), wherein at paragraph no.14, 15, 16 and 17 of 11 [Cr.M.P. No. 1245 of 2017] the said judgment, it has been held as under:
"14. Relevant paragraphs of the said judgment are quoted herein below:
"The above judgment squarely applies to the facts and circumstances of the case on hand. In this case also, similarly, the application was moved by the assessee before the Magistrate to drop the criminal proceedings which were dismissed by the Magistrate and the High Court also on a petition filed under Sections 397 and 401 of the Criminal Procedure Code, 1973 to revise the order of the Additional Chief Metropolitan Magistrate has also dismissed the same and refused to refer to the order passed by the competent Tribunal. As held by this Court, the High Court is not justified in dismissing the criminal revision vide its judgment ignoring the settled law as laid down by this Court that the finding of the appellate Tribunal was conclusive and the prosecution cannot be sustained since the penalty after having been cancelled by the complainant following the appellate Tribunal's order, no offence survives under the Income Tax Act and thus quashing of prosecution is automatic. In the instant case, the penalties levied under Section 271(1)(c) were cancelled by the respondent by giving effect to the order of the Income Tax Appellate Tribunal in I.T.A. Nos. 3129-3132. It is settled law that levy of penalties and prosecution under Section 276C are simultaneous. Hence, once the penalties are cancelled on the ground that there is no concealment, the quashing of prosecution under Section 276C is automatic.
In our opinion, the appellants cannot be made to suffer and face the rigorous of criminal trial when the same cannot be sustained in the eyes of law because the entire prosecution in view of a conclusive finding of the Income Tax Tribunal that there is no concealment of income becomes devoid of jurisdiction and under Section 254 of the Act, a finding of the Appellate Tribunal supersedes the order of the Assessing Officer under Section 143(3) more so when the Assessing Officer cancelled the penalty levied.
In our view, once the finding of concealment and subsequent levy of penalties under Section 271(1)(c) of the Act has been struck down by the Tribunal, the Assessing Officer has no other alternative except to correct his order under Section 154 of the Act as per the directions of the Tribunal. As already noticed, the subject matter of the complaint before this Court is concealment of income arrived at on the basis of the finding of the Assessing Officer. If the 12 [Cr.M.P. No. 1245 of 2017] Tribunal has set aside the order of concealment and penalties, there is no concealment in the eyes of law and, therefore, the prosecution cannot be proceeded with by the complainant and further proceedings will be illegal and without jurisdiction. The Assistant Commissioner of Income Tax cannot proceed with the prosecution even after the order of concealment has been set aside by the Tribunal. When the Tribunal has set aside the levy of penalty, the criminal proceedings against the appellants cannot survive for further consideration. In our view, the High Court has taken the view that the charges have been framed and the matter is in the stage of further cross-examination and, therefore, the prosecution may proceed with the trial. In our opinion, the view taken by the learned Magistrate and the High Court is fallacious. In our view, if the trial is allowed to proceed further after the order of the Tribunal and the consequent cancellation of penalty, it will be an idle and empty formality to require the appellants to have the order of Tribunal exhibited as a defence document inasmuch as the passing of the order as aforementioned is unsustainable and unquestionable."
15. By way of referring this judgment, learned counsel for the petitioner submits that once the penalties are cancelled on the ground that there is no concealment, the quashing of prosecution under Section 276CC is automatic and the petitioner cannot be made to suffer and face the rigorous of criminal trial when the same cannot be sustained in the eyes of law because the entire prosecution in view of a conclusive finding of the Income Tax Tribunal that there is no concealment of income becomes devoid of jurisdiction and under Section 254 of the Act, a finding of the appellate authority supersedes the order of the Assessing Officer under Section 143(3) and more so when the Assessing Officer cancelled the penalty levied.
16. Learned counsel for the petitioner further submits that protective measure because of similar penalty was the subject matter before the Punjab and Haryana High Court in the case of Commissioner of Income-Tax, Patiala-II v. Behari Lal Pyare Lal, reported in (1983) 141 ITR 32 (P&H).
17. Relevant paragraph of the said judgment is quoted herein below:
"The penalty was imposed by the IAC as a protective measure because a similar penalty had already been imposed on the two partners for concealment of the said income. The Tribunal found that, under law, a protective order of 13 [Cr.M.P. No. 1245 of 2017] assessment can be passed but not of penalty. The learned counsel for the Revenue was unable to challenge this view of the Tribunal and frankly conceded that he was not able to cite any provision of law or decided case which warranted a protective order of penalty. That apart, no finding was recorded by the IAC that there was any wilful concealment of the income and in the absence of such a finding, the order of penalty would be unsustainable. The other reason given for deleting the penalty was that the income did not accrue to the present firm. As is apparent from the facts stated above, the amount received by the firm was not credited in its account and instead credited to the accounts of Lachhman Dass and Sat Parkash who were partners in the earlier firm. The assessee-firm, therefore, did not treat the said amount as its own and it being a firm different from the one to whom the refund had been made could not be held guilty of any concealment. The Tribunal, therefore, rightly deleted the penalty and questions Nos. 1 and 3 are accordingly answered against the Revenue and in favour of the assessee."
12. Looking into the said ratio of the judgment of the Hon'ble Supreme Court, it appears that the case of the petitioners is fully covered as against the petitioners there is no penalty or assessment further in view of the subsequent orders passed by the competent authority in the said statute. There is no doubt that the willful failure occur in section 276 CC of the Income Tax Act, 1961, can attract if the willfulness brings in the element of guilt and thus, the requirement of mens-rea will come into force. In the case in hand, the petitioners have already deposited the tax and thereafter the said prosecution has been initiated.
13. The judgment relied by Mr. Sahay, the learned counsel for the respondent Income Tax Department in the case of Sasi Enterprises(supra), the proviso to section 276 CC was also considered and section 276 CC of the said statute is quoted below:
"276.-CC. Failure to furnish returns of income- If a person willfully 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 clause (i) of sub-section (1) of Section 142 or Section 148, he shall be punishable-
(i) In a case where the amount of tax which would 14 [Cr.M.P. No. 1245 of 2017] have been evaded if the failure had not been discovered, exceeds one 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 for a term which shall not be less than three months but which may extend to three 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 income under sub section (1) of Section 139-
(i)For any assessment year commencing prior to st the 1 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"
14. Looking into clause(ii)(b) of section 276 CC, it is crystal clear that if the tax payable determined on regular assessment is reduced by advance tax paid and the tax deducted at source does not exceed Rs.3,000/- such an assessee shall not be prosecuted for not furnishing the return under section 139(1) of the said Act. In the case in hand, in view of subsequent orders passed by the concerned authority under the statute, there is no assessment against the petitioners. Thus, the tax liability is not there even to the tune of Rs.3,000/- in view of the said proviso and this aspect of the matter has already been considered by the Hon'ble Supreme Court in the case of Sasi Enterprises(supra) on which much force has been made by the learned counsel for the Income Tax Department and the said aspect was discussed in paragraph no.25 of the said judgment which is quoted as under:
"25. Section 276-CC applies to situations where an assessee has failed to file a return of income as required under Section 139 of the Act or in response to notices issued to the assessee under Section 142 or Section 148 of the Act.15 [Cr.M.P. No. 1245 of 2017]
The proviso to Section 276-CC gives some relief to genuine assessees. The proviso to Section 276-CC gives further time till the end of the assessment year to furnish return to avoid prosecution. In other words, even though the due date would be 31st August of the assessment year as per Section 139(1) of the Act, an assessee gets further seven months' time to complete and file the return and such a return though belated, may not attract prosecution of the assessee. Similarly, the proviso in clause (ii)(b) to Section 276-CC also provides that if the tax payable determined by regular assessment as reduced by advance tax paid and tax deducted at source does not exceed Rs 3000, such an assessee shall not be prosecuted for not furnishing the return under Section 139(1) of the Act. Resultantly, the proviso under Section 276-CC takes care of genuine assessees who either file the returns belatedly but within the end of the assessment year or those who have paid substantial amounts of their tax dues by pre-paid taxes, from the rigour of the prosecution under Section 276-CC of the Act."
15. There is no doubt that the penal provision is required to be dealt with as it is, and the court is not required to shift the language of penal provision, however, in the case in hand, the facts are otherwise.
16. In view of the above discussion, reasons and analysis, entire criminal proceeding arising out of Complaint Case No.08 of 2012, including order taking cognizance dated 07.09.2012 passed by learned Special Judge, Economic Offences, Ranchi whereby cognizance has been taken under section 276 of CC of the Income Tax Act, 1961, pending in the court of learned Special Judge, VII, Economic Offences, Ranchi is quashed.
17. Cr.M.P. No.1245 of 2017 is allowed and disposed of.
18. Pending petition, if any, also stands disposed of.
( Sanjay Kumar Dwivedi, J.) SI/, A.F.R,