w w w . L a w y e r S e r v i c e s . i n



M/s. Forzza Projects Private Limited, Tirur, Represented by Its Managing Director & Principal Officer Vellakkat Niaz (Within The Limits of Tirur Police Station) & Others v/s Principal Commissioner of Income Tax, Office of The Principal Commissioner of Income Tax (Central), Kochi & Another


Company & Directors' Information:- C AND C PROJECTS LIMITED [Active] CIN = U74999HR2007PLC036644

Company & Directors' Information:- Y K M PROJECTS PRIVATE LIMITED [Active] CIN = U40109TG2008PTC057263

Company & Directors' Information:- T G R PROJECTS INDIA PRIVATE LIMITED [Active] CIN = U45200KA2012PTC062702

Company & Directors' Information:- S G PROJECTS LIMITED [Active] CIN = U65999WB1990PLC049684

Company & Directors' Information:- B C C PROJECTS PVT LTD [Active] CIN = U74899DL2001PTC112102

Company & Directors' Information:- J K S PROJECTS LIMITED [Active] CIN = U45400WB2011PLC157565

Company & Directors' Information:- D M P PROJECTS PVT LTD [Active] CIN = U27109WB2006PTC107513

Company & Directors' Information:- T & T PROJECTS LIMITED [Active] CIN = U45201AS2008PLC008641

Company & Directors' Information:- W AND W PROJECTS PRIVATE LIMITED [Active] CIN = U65910DL1989PTC036754

Company & Directors' Information:- E M C PROJECTS PVT LTD [Active] CIN = U29248WB1964PTC026261

Company & Directors' Information:- H AND V PROJECTS PRIVATE LIMITED [Active] CIN = U72400DL2011PTC220047

Company & Directors' Information:- M A PROJECTS PRIVATE LIMITED [Active] CIN = U70101DL2005PTC135093

Company & Directors' Information:- S. V. S. PROJECTS PRIVATE LIMITED [Active] CIN = U70100AP1998PTC029024

Company & Directors' Information:- M V PROJECTS (INDIA) PRIVATE LIMITED [Active] CIN = U45202KA2008PTC045272

Company & Directors' Information:- S V S PROJECTS INDIA PRIVATE LIMITED [Active] CIN = U45200AP2015PTC096787

Company & Directors' Information:- A T E PROJECTS PRIVATE LIMITED [Active] CIN = U74999DL1999PTC102246

Company & Directors' Information:- U W T PROJECTS LIMITED [Active] CIN = U45200AP2004PLC043198

Company & Directors' Information:- J J PROJECTS PVT LTD [Active] CIN = U24231WB1986PTC040246

Company & Directors' Information:- Z H PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45400WB2012PTC184307

Company & Directors' Information:- K & J PROJECTS PRIVATE LIMITED [Active] CIN = U45203MH2004PTC150165

Company & Directors' Information:- T & I PROJECTS LTD [Active] CIN = L29130WB1984PLC038232

Company & Directors' Information:- B 2 R PROJECTS PRIVATE LIMITED [Active] CIN = U45400WB2013PTC189971

Company & Directors' Information:- C M PROJECTS PRIVATE LIMITED [Active] CIN = U45201DL2004PTC130580

Company & Directors' Information:- N G PROJECTS LIMITED [Active] CIN = U45201GJ2003PLC042152

Company & Directors' Information:- E AND C PROJECTS PRIVATE LIMITED [Active] CIN = U29150DL2002PTC115297

Company & Directors' Information:- B. D. R. PROJECTS PRIVATE LIMITED [Active] CIN = U45202TG1998PTC028780

Company & Directors' Information:- J T L PROJECTS PRIVATE LIMITED [Active] CIN = U70101KL2006PTC019439

Company & Directors' Information:- V AND S PROJECTS PRIVATE LIMITED [Active] CIN = U70109DL1996PTC079487

Company & Directors' Information:- L S R PROJECTS PRIVATE LIMITED [Strike Off] CIN = U07010KA2005PTC036041

Company & Directors' Information:- V R PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45400AP2007PTC054901

Company & Directors' Information:- D C R PROJECTS PRIVATE LIMITED [Active] CIN = U45209TG2007PTC056307

Company & Directors' Information:- R. R. PROJECTS PVT LTD [Active] CIN = U45200TG1982PTC003711

Company & Directors' Information:- S H PROJECTS PRIVATE LIMITED [Active] CIN = U74996DL2006PTC149971

Company & Directors' Information:- S R PROJECTS INDIA PVT LTD [Active] CIN = U45207WB1981PTC033286

Company & Directors' Information:- L E PROJECTS PRIVATE LIMITED [Active] CIN = U45303WB2005PTC102555

Company & Directors' Information:- M. S. PROJECTS PRIVATE LIMITED [Active] CIN = U45400WB2009PTC131902

Company & Directors' Information:- J V PROJECTS PRIVATE LIMITED [Active] CIN = U74899DL1995PTC069037

Company & Directors' Information:- B N PROJECTS PRIVATE LIMITED [Active] CIN = U45201GJ2009PTC058067

Company & Directors' Information:- J P PROJECTS PRIVATE LIMITED [Active] CIN = U70109WB2011PTC165990

Company & Directors' Information:- R K PROJECTS PRIVATE LIMITED [Active] CIN = U74899DL1990PTC043660

Company & Directors' Information:- A B PROJECTS PRIVATE LIMITED [Active] CIN = U45200MH2004PTC149404

Company & Directors' Information:- A K PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45201TG1996PTC023179

Company & Directors' Information:- S N M PROJECTS PRIVATE LIMITED [Active] CIN = U70102UP2010PTC040243

Company & Directors' Information:- J AND H PROJECTS PRIVATE LIMITED [Active] CIN = U45200GJ2013PTC074010

Company & Directors' Information:- N S PROJECTS PRIVATE LIMITED [Active] CIN = U70101WB2007PTC117882

Company & Directors' Information:- H S PROJECTS PRIVATE LIMITED [Active] CIN = U45208DL2006PTC153706

Company & Directors' Information:- N M PROJECTS PRIVATE LIMITED [Active] CIN = U29219DL2009PTC186728

Company & Directors' Information:- K. V. PROJECTS PRIVATE LIMITED [Active] CIN = U70102WB2012PTC188439

Company & Directors' Information:- K R S PROJECTS PRIVATE LIMITED [Active] CIN = U70102AP2012PTC082232

Company & Directors' Information:- B S C PROJECTS PRIVATE LIMITED [Active] CIN = U45200DL2011PTC227768

Company & Directors' Information:- J K PROJECTS PRIVATE LIMITED [Active] CIN = U45203GJ2001PTC039576

Company & Directors' Information:- F C C PROJECTS PRIVATE LIMITED [Active] CIN = U29248UP1982PTC005786

Company & Directors' Information:- S N PROJECTS LIMITED [Active] CIN = U85110KA1996PLC021040

Company & Directors' Information:- B. D. PROJECTS PRIVATE LIMITED [Amalgamated] CIN = U45400WB2010PTC147620

Company & Directors' Information:- C & I PROJECTS PRIVATE LIMITED [Active] CIN = U29100DL2010PTC209136

Company & Directors' Information:- C & I PROJECTS PRIVATE LIMITED [Active] CIN = U74140DL2010PTC209136

Company & Directors' Information:- C B PROJECTS PRIVATE LIMITED [Active] CIN = U70109WB1997PTC085237

Company & Directors' Information:- G G PROJECTS PRIVATE LIMITED [Active] CIN = U45201DL1998PTC091501

Company & Directors' Information:- V M G PROJECTS (INDIA) PRIVATE LIMITED [Strike Off] CIN = U45400WB2011PTC164117

Company & Directors' Information:- M. L. PROJECTS PRIVATE LIMITED [Active] CIN = U45400WB2010PTC151513

Company & Directors' Information:- R N D PROJECTS PRIVATE LIMITED [Active] CIN = U70102DL1996PTC080051

Company & Directors' Information:- M. K. N. PROJECTS PRIVATE LIMITED [Active] CIN = U70101DL2009PTC196755

Company & Directors' Information:- M B R PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45300KA2009PTC049005

Company & Directors' Information:- G S P PROJECTS PRIVATE LIMITED [Active] CIN = U45201WB1992PTC057116

Company & Directors' Information:- K P S PROJECTS PRIVATE LIMITED [Active] CIN = U70102TG2005PTC046280

Company & Directors' Information:- E AND V PROJECTS PRIVATE LIMITED [Strike Off] CIN = U70102TG2004PTC042622

Company & Directors' Information:- T M R PROJECTS PRIVATE LIMITED [Active] CIN = U45400DL2010ULT211007

Company & Directors' Information:- S C T PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45201DL2008PTC184418

Company & Directors' Information:- P A PROJECTS PRIVATE LIMITED [Active] CIN = U45208WB1997PTC083907

Company & Directors' Information:- N K D PROJECTS PRIVATE LIMITED [Active] CIN = U45400WB2008PTC128819

Company & Directors' Information:- A I PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45203WB2000PTC091229

Company & Directors' Information:- P N PROJECTS PRIVATE LIMITED [Active] CIN = U45202DL2016PTC289494

Company & Directors' Information:- V AND M PROJECTS PRIVATE LIMITED [Active] CIN = U45201DL2005PTC139731

Company & Directors' Information:- K K PROJECTS PVT LTD [Strike Off] CIN = U70200WB1995PTC073058

Company & Directors' Information:- S L PROJECTS PRIVATE LIMITED [Active] CIN = U45400AN2009PTC000109

Company & Directors' Information:- PROJECTS PVT LTD [Strike Off] CIN = U45201WB1951PTC019759

Company & Directors' Information:- TIRUR PROJECTS PRIVATE LIMITED [Active] CIN = U70100KL2012PTC031077

Company & Directors' Information:- V K M PROJECTS PRIVATE LIMITED [Active] CIN = U45400UP2011PTC045725

Company & Directors' Information:- K P PROJECTS PVT LTD [Active] CIN = U70101WB1996PTC077397

Company & Directors' Information:- C R PROJECTS PRIVATE LIMITED [Active] CIN = U45400PB2009PTC032572

Company & Directors' Information:- N D B K PROJECTS (INDIA) PRIVATE LIMITED [Active] CIN = U27100PB2012PTC036987

Company & Directors' Information:- N P R PROJECTS INDIA PRIVATE LIMITED [Strike Off] CIN = U45400TN2012PTC086360

Company & Directors' Information:- G P N PROJECTS PRIVATE LIMITED [Strike Off] CIN = U18101TZ2006PTC012749

Company & Directors' Information:- D H V PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45200TG2005PTC045988

Company & Directors' Information:- V K R PROJECTS PRIVATE LIMITED [Active] CIN = U45200TG2005PTC046370

Company & Directors' Information:- I N C PROJECTS PRIVATE LIMITED [Active] CIN = U70109WB2005PTC101620

Company & Directors' Information:- J. S. PROJECTS PRIVATE LIMITED [Active] CIN = U45400WB2009PTC136510

Company & Directors' Information:- D J PROJECTS PRIVATE LIMITED [Active] CIN = U15201DL2005PTC134979

Company & Directors' Information:- M S C K PROJECTS PRIVATE LIMITED [Converted to LLP] CIN = U70101DL2005PTC135407

Company & Directors' Information:- B R T PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45203TG1996PTC025021

Company & Directors' Information:- T AND M PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45201KA2008PTC045199

Company & Directors' Information:- A C G PROJECTS PRIVATE LIMITED [Active] CIN = U45201UP1999PTC024162

Company & Directors' Information:- C K B PROJECTS INDIA LIMITED [Strike Off] CIN = U70102WB2012PLC188740

Company & Directors' Information:- N E PROJECTS LTD [Strike Off] CIN = U16009AS1999PLC005873

Company & Directors' Information:- D R PROJECTS PRIVATE LIMITED [Active] CIN = U74899DL2001PTC109612

Company & Directors' Information:- I J PROJECTS PRIVATE LIMITED [Strike Off] CIN = U70102KA2009PTC049320

Company & Directors' Information:- G C N PROJECTS PRIVATE LIMITED [Active] CIN = U45200KA2011PTC061371

Company & Directors' Information:- L N PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45200TG2004PTC043064

Company & Directors' Information:- H B PROJECTS PVT LTD [Amalgamated] CIN = U45201WB1993PTC058846

Company & Directors' Information:- I. T. G PROJECTS PRIVATE LIMITED [Active] CIN = U74899DL1994PTC063342

Company & Directors' Information:- P. S. PROJECTS PRIVATE LIMITED [Converted to LLP and Dissolved] CIN = U70109WB2011PTC170655

Company & Directors' Information:- A R N PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45202MH2010PTC199122

Company & Directors' Information:- H. K. PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45400WB2007PTC116467

Company & Directors' Information:- D M C PROJECTS PRIVATE LIMITED [Strike Off] CIN = U74140WB2005PTC105972

Company & Directors' Information:- S P PROJECTS (INDIA) PRIVATE LIMITED [Active] CIN = U45400DL2010PTC203910

Company & Directors' Information:- J R PROJECTS PRIVATE LIMITED [Strike Off] CIN = U70109HR2012PTC045119

Company & Directors' Information:- C N R PROJECTS INDIA PRIVATE LIMITED [Active] CIN = U45201KA2007PTC041355

Company & Directors' Information:- A J PROJECTS (INDIA) PRIVATE LIMITED [Strike Off] CIN = U45201MH2006PTC164622

Company & Directors' Information:- J M PROJECTS PRIVATE LIMITED [Active] CIN = U45200MP2007PTC019336

Company & Directors' Information:- L S S PROJECTS PRIVATE LIMITED [Active] CIN = U45400UP2013PTC059508

Company & Directors' Information:- A TO Z PROJECTS PRIVATE LIMITED [Strike Off] CIN = U70101DL1995PTC069527

Company & Directors' Information:- G I T T PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45201TG2006PTC051193

Company & Directors' Information:- Z & I PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45309TN2007PTC064972

Company & Directors' Information:- B. G. PROJECTS PRIVATE LIMITED [Active] CIN = U45400MH2012PTC231270

Company & Directors' Information:- P S R PROJECTS INDIA PRIVATE LIMITED [Active] CIN = U45400TG2015PTC101191

Company & Directors' Information:- E & E PROJECTS PRIVATE LIMITED [Active] CIN = U45400UP2015PTC075033

Company & Directors' Information:- B B R PROJECTS PRIVATE LIMITED [Active] CIN = U45200TG2005PTC045165

Company & Directors' Information:- M V R PROJECTS PRIVATE LIMITED [Active] CIN = U45200TG2005PTC045166

Company & Directors' Information:- L V S PROJECTS PRIVATE LIMITED [Under Process of Striking Off] CIN = U45200TG2010PTC068286

Company & Directors' Information:- R N V PROJECTS PRIVATE LIMITED [Active] CIN = U70102UP2011PTC044240

Company & Directors' Information:- K L PROJECTS PRIVATE LIMITED [Active] CIN = U27104DL2003PTC119655

Company & Directors' Information:- K S M PROJECTS PRIVATE LIMITED [Active] CIN = U45400DL2009PTC194824

Company & Directors' Information:- 3 G PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45400DL2015PTC276736

Company & Directors' Information:- I S R PROJECTS PRIVATE LIMITED [Active] CIN = U74140DL2005PTC138210

Company & Directors' Information:- L V PROJECTS PRIVATE LIMITED [Active] CIN = U74140DL2014PTC272838

Company & Directors' Information:- M K PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45201DL2002PTC117787

Company & Directors' Information:- B V M PROJECTS PRIVATE LIMITED [Active] CIN = U45201DL2004PTC131352

Company & Directors' Information:- K. J. S. PROJECTS PRIVATE LIMITED [Active] CIN = U70109DL2006PTC152898

Company & Directors' Information:- V N R PROJECTS PRIVATE LIMITED. [Active] CIN = U45400AP2008PTC060896

Company & Directors' Information:- C R R PROJECTS PRIVATE LIMITED [Active] CIN = U45400AP2015PTC097217

Company & Directors' Information:- A R P PROJECTS PRIVATE LIMITED [Active] CIN = U45200HR2012PTC044979

Company & Directors' Information:- H V PROJECTS PVT LTD [Active] CIN = U45202HR1997PTC033617

Company & Directors' Information:- V & V PROJECTS PRIVATE LIMITED [Strike Off] CIN = U70109KA2005PTC037578

Company & Directors' Information:- M S S PROJECTS PRIVATE LIMITED [Strike Off] CIN = U45202KA2005PTC037905

Company & Directors' Information:- C AND T PROJECTS PRIVATE LIMITED [Strike Off] CIN = U74140GJ2009PTC057480

Company & Directors' Information:- A AND B PROJECTS PRIVATE LIMITED [Active] CIN = U45201GJ2007PTC051077

Company & Directors' Information:- FORZZA PROJECTS PRIVATE LIMITED [Active] CIN = U70100KL2012PTC030660

Company & Directors' Information:- B. P. S. R. PROJECTS PRIVATE LIMITED [Active] CIN = U70109RJ2018PTC063238

Company & Directors' Information:- R M S PROJECTS PVT LTD [Strike Off] CIN = U74210DL1975PTC007946

Company & Directors' Information:- A. R. PROJECTS PRIVATE LIMITED [Strike Off] CIN = U40200DL2007PTC161559

    Crl. MC. Nos. 5669 & 5671 of 2020 (G)

    Decided On, 11 February 2021

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE P. SOMARAJAN

    For the Petitioners: Latha Anand, S. Vishnu (Arikkattil), M.N. Radhakrishna Menon, P.S. Sidharth, Advocates. For the Respondents: R1 & R2, P.K. Ravindranatha Menon, Sr. Advocate, Jose Joseph, SC, Christopher Abraham, Advocate, M.R. Dhanil, Public Prosecutor.



Judgment Text

1. The complaints alleging offence under Section 276 C (2) of the Income Tax Act are sought to be quashed on the ground that a mere failure to pay the income tax based on the self assessment would not constitute the offence under that section. Admittedly, at the time of submission of return based on self assessment tax, the tax was not remitted. Subsequently, it was remitted with interest by availing installment facility. Regarding the penalty imposed, an appeal was preferred, which is pending before the appellate authority.2. The petitioner seeks to quash the complaints and its further proceedings on the reason that there is only a failure to make payment of the tax in time as per the self assessment return and it will not fall under any of the clauses (i) to (iv) in the Explanation attached to Section 276 C of the Income Tax Act and hence, the criminal liability under that section cannot be fastened. But it was countered by the Income Tax Department stating that it is incumbent on the tax payer to remit the tax based on the self assessment and the non-payment would come under the expression “evade the payment of tax” as incorporated in sub-section (2) of Section 276 C of the Act and cannot seek protection under the Explanation, which is not applicable to that sub-section. It was brought to the notice of this Court that in sub-section (1), the words used are “evade any tax”, but the words “evade the payment of any tax” have been incorporated in subsection (2). It is submitted that the word “payment” is conspicuously absent in sub-section (1) and the Explanation attached thereto and that what is dealt under the Explanation is with regard to “evade any tax” and not with respect to “evade the payment of tax” as incorporated in subsection (2) and hence the Explanation attached must be understood only relating to the cases, which would fall under sub-section (1) and not subsection (2) and took support from G.Viswanathan v. Income Tax Officer, A-Ward, Parameswar Nagar (1987 Vol. 167 ITR 103). The relevant portion of the said judgment is extracted below for reference :“Sub-sections (1) and (2) of Section 276C deal with two different situations. Sub-section (1) deals with 'evasion of tax, penalty or interest chargeable or imposable under the Act'. Therefore, evidently, what is contemplated is evasion before charging or imposing tax, penalty or interest. That may include wilful suppression in the returns before assessment and completion. But sub-section (2) deals with evading 'the payment of tax, penalty or interest under the Act'. The words 'chargeable' or 'imposable' are not there. What sub-section (2) says is 'without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable.....'. Therefore, evidently, sub-section (2) takes in cases of tax evasion after 'charging' or 'imposition'. Evasion after completion of assessment also comes within the operation of the sub-section. We are concerned in these cases with such alleged evasion.What the Explanation to Section 276C deals with is “wilful attempt to evade any tax, penalty or interest chargeable or imposable under this Act or payment thereof” contemplated by sub-section (1) and not “payment of any tax, penalty or interest under this Act' as contemplated in subsection (2). Therefore, the Explanation concerns only subsection (1) and not sub-section (2). Further the Explanation is only inclusive and not exhaustive. Item (iv) of the Explanation also makes this position clear. Sub-section (2) is so clear that at any rate it takes in the cases of evasion of tax, penalty or interest after assessments were made. Avoidance of tax is avoidance of tax liability under some manner as distinguished from evasion of tax whether before or after charging or imposition. It is not illegal as distinguished from penal evasion. Section 276C(2) deals with evasion after quantification. It becomes applicable only after income is assessed and the assessee attempts to evade payment.”3. Section 276 C of the Income Tax Act is extracted below for reference :“276C. Wilful attempt to evade tax, etc – (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.(2) If a person wilfully attempts in any manner whatsoever to evade the payment of any tax, penalty or interest under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to [two years] and shall, in the discretion of the court, also be liable for fine.Explanation – For the purposes of this section, a wilful attempt to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof shall include a case where any person-(i) has in his possession or control any books of account or other documents (being books of account or other documents relevant to any proceeding under this Act) containing a false entry or statement, or(ii) makes or causes to be made any false entry or statement in such books of account or other documents; or(iii) wilfully omits or causes to be omitted any relevant entry or statement in such books of account or other documents; or(iv) causes any other circumstance to exist which will have the effect of enabling such person to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof.”4. A mere perusal of the said provision would show that the Explanation was given after sub-section(1) and (2) and not before subsection (2). It would prima facie show that the legislative intention is to make the Explanation applicable to both sub-section (1) and (2), otherwise, the Explanation would have been incorporated before sub-section (2). A conjoint reading of sub-sections (1) and (2) with clauses (i) to (iv) in the Explanation would show that the legislature never intended to exclude sub-section (2) from the operation of Explanation.5. Earlier, an issue regarding difference of opinion as to the estimate and non-payment of tax came up for consideration before the Apex Court in Prem Dass v. Income Tax Officer [AIR 1999 SC 1079 = (1999) 5 SCC 241], and it was held that there should be concealment of income or furnishing of inaccurate particulars of income in order to attract Sections 276 C and 277 of the Income TAx Act . Paragraphs 8 and 9 of the said judgment are extracted below for reference:“8. wilful attempt to evade any tax, penalty or interest chargeable opposable 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 mens rea, 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 imposed under Section 271(1)(C) 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.9. In the aforesaid premises, the High Court was totally in error in interfering with the order of acquittal passed by the learned Sessions Judge by an elaborate and well reasoned judgment. We have no hesitation to come to the conclusion that the ingredients of offence under Sections 276C and 277 of the Income Tax Act have not been established by the prosecution beyond reasonable doubt, and therefore, the appellant cannot be convicted of the offence under the said Sections.”(emphasis supplied)6. In view of the legal position settled by the Apex court in Prem Dass's case (supra) , it cannot be held that the legal position laid down by this Court in G.Viswanathan's case (supra) is good law. In the instant case, admittedly there is no concealment of any source of income or taxable item, inclusion of a circumstance aimed to evade tax or furnishing of inaccurate particulars regarding any assessment or payment of tax. What is involved is only a failure on the part of the petitioner to pay the tax in time, which was later on paid after availing installment facility with interest. The penalty imposed is now pending consideration before the appellate authority. So it would not fall under the mischief of Section 276 C of the Income Tax Act.7. Yet another argument was also advanced based on the deeming provision – Section 278 E of the Income Tax Act regarding the presumption as to existence of culpable mental state on a prosecution for any offence under the Act. It was argued that any failure or non-payment of tax, penalty or interest must always be construed with the application of Section 278 E of the Act by presuming a culpable mental state and even an act of failure would stand with the necessary mens rea by virtue of the presumption available under that section, though it is rebuttable and relied on Praksh Nath Khanna and Ors. v. Commissioner of Income Tax and Ors. [2004 Vol. 266 ITR 1 = (2004) 9 SCC 686]8. Section 278 E is extracted below for reference :“278E – Presumption as to culpable mental state – (1) In any prosecution for any offence under this Act which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution.Explanation – In this sub-section, “culpable mental state” includes intention, motive or knowledge of a fact, or belief in, or reason to believe, a fact.(2) For the purposes of this section, a fact is said to be proved only when the court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability.”(emphasis supplied)9. A 'culpable mental state' which can be presumed under Section 278E of the Act would come into play only in a prosecution for any offence under the Act, when the said offence requires a 'culpable mental state' on the part of the accused. Section 278 E of the Act is really a Rule of Evidence regarding existence of mens rea by drawing a presumption though rebuttable. That does not mean that the presumption would stand applie

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d even in a case wherein the basic requirements constituting the offence are not disclosed. The presumption can be applied only when the basic ingredient which would constitute any offence under the Act is disclosed. Then only the rule of evidence under Section 278 E of the Act regarding rebuttable presumption as to existence of culpable mental state on the part of accused would come into play. As such there is no scope for applying the rebuttable presumption under Section 278E of the Act in the instant case.10. What is dealt with in Prakash Nath Khanna's case is the criminal liability that can be fastened under Section 276CC of the Act when there is wilful failure to furnish return. The expression “failure” used in Section 276 CC of the Act is with respect to submission of assessment and return and the same cannot be equated with any failure to pay the tax in time and the liability under Section 276 C of the Act. A mere failure to pay the amount due (tax, interest or penalty) will not satisfy the requirement which would constitute the offence under Section 276C(2) of the Income Tax Act. Hence the crime registered and the further proceedings thereof will not serve any purpose, if it is proceeded further. The same is quashed.Both the Crl.M.Cs are allowed accordingly.
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