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Now, the last and the highest sanction provided by the Act for the non-filing or the delayed furnishing of the return has been spelt out under s. 276CC of the Act. Only to highlight, it hears repetition that this section falls in Chap. 22, the very heading whereof indicates that is relates to offences and prosecutions. As a matter of legislative history, it may be noticed that s. 276CC was substituted for the earlier s. 276C by the T.L. (Amend.) Act, 1975, with effect from October 1, 1975. Its stringent provisions deserve notice in extenso :

(ii) in any other case, with imprisonment for a term which shall no 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."

It seems plain from the aforesaid provisions that herein the wilful failure to furnish returns of income is made a serious crime which, in its aggravated form, is punishable with the minimum sentence of six months rigorous imprisonment which may extend to sever years and in any there case again with fine. In this context, it deserves recalling that originally the word "wilfully" did not find place in the predecessor s. 276C of the Act. It was only after the Joint Select Committee had forcefully opined that "in accordance with the accepted canons of criminal jurisprudence, failure to furnish return or produce documents, etc., should be made punishable only when such failure is wilful", that the word "wilful" was introduced in s. 276C with effect from April 1, 1971, by Act No. 42 of 1970. It would thus be plain that the insertion of the word "wilful" had been deliberately made to incorporate into this statutory offence a clear requirement of a guilty mind or mens rea. When s. 276C came to be substituted by he present s. 276CC, the same mens rea was incorporated in the successor provision as well.

Now, it is against the aforesaid larger perspective of the basic scheme of the I.T. Act, 1961, for providing three distinct sanctions for the non-filing or delayed filing of returns that Mr. D. N. Awasthys contention on behalf of the revenue is to be tested. he had plausibly and forcefully contended that the doctrine of mens rea, which essentially is one from the realm of criminal law, can be strictly and directly attracted only under the last and the highest sanction provided by s. 276CC of the Act, which creates a statutory offence for this tax delinquency. Herein, both because the Legislature has chosen to make it a crime and also because in its wisdom, it has introduced the mental element of wilfulness in the section itself, a guilty state of mind or to put it technically mens rea is an essential ingredient of the offence under the aforesaid section. However, as regards the earlier two sanctions under s. 139 and s. 271(1)(a), these are neither crimes stricto sensu nor has the Legislature chosen to prescribe any mental element either identical or analogous to wilfulness in those provision. The word "wilfulness" or anything equivalent thereto is conspicuous by its absence in s. 271(1)(a) of the Act. Therefore, firstly, to invoke a doctrine derived entirely from the realm of criminal law into a provision for imposing penalties by way of civil and coercive sanctions would be unwarranted and, secondly, to thrust an element of wilfulness or contumacious conduct in the same provision when the Legislature has not employed by such word (in sharp contrast to s. 276CC), would be patently doing violence to the plain language of the statute. It was submitted that to introduce the requirement of wilfulness, contumacious conduct, or dishonest intention, in s. 271(1)(a), merely by a process of interpretation, when the Legislature itself has adversely avoided the use of any such terminology therein, would be an obvious infraction of the sound canons of interpretation. We find these submissions on behalf of the revenue, to be patently meritorious.

We take the view that the basic issue before us can be truly answered only when viewed against the larger perspective of the scheme and the provisions of the I.T. Act, 1961. It is manifest that the Act first prescribes the duty of filing the income-tax return within the prescribed time and then postulates three distinct sanctions for the enforcement of that statutory obligation. These are, by levying interest under s. 139 by imposing penalty, if the delay has been occasioned without reasonable cause under s. 271(1)(a), and by convicting the sentencing the assessee by treating such failure to file the returns as an offence, if it was proved that this was wilful. These are three distinct and varying degrees of non-filing of returns or filing them beyond the prescribed time and the statute clearly keeps up the distinctions at all stages between the three modes. While the Legislature has been content by imposing only a financial penalty on reaching satisfaction as to the absence of reasonable cause, it has prescribed the presence of wilful failure to furnish returns in due to make it an offence punishable with a minimum imprisonment added with fine. Equally significant is the distinction between the word "penalty" as contemplated by s. 271(1)(a) and the stringent punishments provided by s. 276CC. Reference to s. 271(1)(a)(i) of the Act would indicate that the Legislature itself viewed this "penalty" as an addition to the amount of tax, if any, payable by the assessee and the same is calculated in relation to the amount of the assessed tax. It would be thus obvious that the penalty imposed here is in a way related to tax and as was authoritatively said in C. A. Abrahams case [1961] 41 ITR 425 (SC) is part of the assessment proceedings. Now, what is imposed under s. 276CC of the Act is altogether different in nature. The proceedings therein are neither part of the assessment proceedings nor are they directly proportionate to the amount of tax leviable. The offender under cls. (i) and (ii) thereof can be visited with rigorous imprisonment which may extend to sever years or three years respectively with an addition of fine as well. It seems unnecessary to elaborate the point because the difference which the statute maintains between the penalty leviable under s. 271(1)(a) and the punishment imposable under s. 276CC of the Act, is demonstratively patent. Whilst for levying penalty, absence of reasonable cause as to be shown, for imposing punishment. wilful failure has to be established and as a settled cannon of criminal law, the burden to do so rests on the prosecution. Wilfulness certainly brings in the element of guilty mind and thus the requirement of a mens rea, but the presence or absence of a reasonable cause can be something wholly objective and far removed therefrom. Thus from the provisions of the Act itself, it irresistibly emerges that the element of mens rea is made an ingredient for the offence under s. 276CC of the Act and not for the mere penalty proceedings under s. 271(1)(a).