Patna High Court
Income-Tax Officer, Ward-C vs Taurus Equipment (P.) Ltd. And Anr. on 13 December, 1978
Equivalent citations: [1979]118ITR982(PATNA)
JUDGMENT M.P. Singh, J.
1. This is an appeal by the Income-tax Officer, Ward-C, Dhanbad, from an order of acquittal of the two respondents, M/s. Taurus Equipment (P.) Ltd. and its director, S.K. Agrawalla, dated 16th December, 1971. The two respondents were put on trial under Sections 276(b) and 276(d) of the I.T. Act, 1961 (briefly "the Act") for having failed to file the return for the financial year 1964-65, within the prescribed time limit as required by Section 206 of the Act read with Rule 35(1) of the I.T, Rules, 1962, and also for having failed to pay within the prescribed time the sum deducted as tax (Rs. 9,944.24) to the credit of the Central Government as required by Section 200 of the Act read with Rule 30(1)(b) of the said Rules. In short, the prosecution case was that the respondents had contravened the provisions of Sections 206 and 200 of the Act. The defence of the respondents was that they had not committed any offence. A further defence was taken by respondent No. 2, S.K. Agrawalla, that he was not the principal officer and he was, therefore, not liable to file the return under Section 206 of the Act.
2. It is contended on behalf of the appellant that although evidence is lacking on the point that S.K. Agrawalla was the principal officer, there is allegation and evidence against the company to the effect that the company failed to pay the sum deducted as tax to the credit of the Central Government and hence the company should be held liable and should be punished. On behalf of the respondents, Mr. Rajgarhia raised a law point that in view of the provisions of Section 276 of the Act, it must be held that no offence was committed by the respondents. It may be stated here that Section 276 has now been omitted by the Taxation Laws (Amendment) Act, 1975 (41 of 1975), (w.e.f. April 1, 1976). The portion relevant of Section 276 of the Act as it stood originally read as follows :
"If a person fails without reasonable cause or excuse--......
(b) to furnish in due time any of the returns or statements mentioned in Section 133, Sub-section (2) of Section 139, Section 206, Section 285 or Section 286.......
(d) to deduct and pay tax as required by the provisions of Chapter XVII-B or under Sub-section (2) of Section 226 ; or......
he shall be punishable with fine which may extend to ten rupees for every day during which the default continues. "
3. Mr. Rajgarhia appearing for the respondents had strenuously urged that mere late filing of the return or late deposit of the sum deducted as tax is no offence unless it is further proved by the department that the defaulter failed to do so without reasonable cause or excuse. In my opinion, this contention has merit and must be accepted as valid. It is supported by the plain provisions of Section 276 of the Act. The words "fails without reasonable cause or excuse" show that means rea is an ingredient to be proved by the department before punishing the defaulter. It must be shown that the default was deliberate and conscious. It is not enough for the department to show that the payment or return was not made or filed in time. It has to go further and prove that it was without reasonable cause or excuse. This onus which was on the department has not been discharged. In support of this principle, there is a wealth of weighty authorities (See All India Sewing Machine Co. v. CIT [1974] 96 ITR 206 (Mys), Dawn & Co. v. CIT [1973] 87 ITR 71 (Ker) and CIT v. Anwar Ali [1970] 76 ITR 696 (SC)). I am of the opinion that unless the prosecution proves by evidence that there was no reasonable cause or excuse for filing the return or to deposit the money within the prescribed time, no offence can be said to have been committed. Learned counsel appearing for the appellant argued that in the present case the defence of the respondents was that they had filed the return and deposited the money within time and this dishonest conduct leads to the conclusion that there was no reasonable cause or excuse for late filing of the return or late deposit of the money. I am not prepared to agree with this contention. There is absolutely no allegation in the complaint and there is also no evidence on record on the point as to whether the respondents acted without any reasonable cause or excuse. In the absence of any allegation and any evidence it is not possible for this court to come to the conclusion that the late filing of the return or late deposit of the money was the deliberate act of the respondents. The contention raised on behalf of the appellant must, therefore, be repelled. In the view which I have expressed, it is not necessary to embark upon a discussion of the other points raised by the parties in this case. For the reasons already expressed, I hold that the prosecution has failed to prove that any offence was committed by the respondents. Although this ground was not taken by the accused-respondents in the court below, I think the order of acquittal can be upheld on this ground alone. I, therefore, hold that the appeal has no merit. Accordingly, it fails and is dismissed.