M/S.AMALGAM NUTRIENTS AND FEEDS LTD. V. INCOME TAX OFFICER,

Crl.MC/7484/2019

AI Insights

This case involves a criminal miscellaneous application filed by M/s. Amalgam Aquaculture Applications Ltd. and its directors against the orders in two criminal cases (CC 258/2017 and CC 259/2017) by the Additional Chief Judicial Magistrate, Ernakulam. The cases were initiated under Section 276 C(2) of the Income Tax Act, alleging failure to pay tax based on self-assessment returns. The petitioners challenged the cognizance taken under this section, arguing that mere non-payment of tax assessed through self-assessment does not constitute an offense under the said section. The High Court of Kerala, referencing a previous decision in Crl.M.C.No.5669/2020 and the Supreme Court's judgment in Prem Dass v. Income Tax Officer, agreed with the petitioners and quashed the proceedings.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 762855 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 09-03-2021
• Assessment Year: misc
• Other Referred Cases: Prem Dass v. Income Tax Officer, G.Viswanathan v. Income Tax Officer, A-Ward, Parameswar Nagar
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH; E C BINEESH; RAMESH CHAND
• Assessee Lawyers: S RAJEEV; K K DHEERENDRAKRISHNAN; V VINAY; D FEROZE; K ANAND
• Keywords: Criminal Miscellaneous Case; Quashing of proceedings; Self-assessment return; Tax non-payment
• Section: 276-C(2)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE P.SOMARAJAN TUESDAY, THE 09TH DAY OF MARCH 2021 / 18TH PHALGUNA, 1942 Crl.MC.No.7481 OF 2019(E) AGAINST THE ORDER/JUDGMENT IN CC 258/2017 OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE (EO),ERNAKULAM PETITIONERS/ACCUSED NO.1 TO 5: 1 M/S.AMALGAM AQUACULTURE APPLICATIONS LTD. PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003, REP. BY ITS MANAGING DIRECTOR AND PRINCIPAL OFFICER, ABRAHAM JOHN THARAKAN. 2 ABRAHAM JOHN THARAKAN. AGED 78 YEARS S/O.MR.JOHN THARAKAN MANAGING DIRECTOR AND PRINCIPAL OFFICER, M/S.AMALGAM AQUACULTURE APPLICATIONS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003. 3 JANI UTHUP CHACKO AGED 74 YEARS S/O.CHIRAKAROTE CHACKO UTHUP, DIRECTOR, M/S.AMALGAM AQUACULTURE APPLICATIONS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003. 4 RAJU MATHEW DIRECTOR, M/S.AMALGAM AQUACULTURE APPLICATIONS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003. 5 MATHEW JOSE DIRECTOR, M/S.AMALGAM AQUACULTURE APPLICATIONS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003. BY ADVS. SRI.S.RAJEEV SRI.K.K.DHEERENDRAKRISHNAN SRI.V.VINAY SRI.D.FEROZE SRI.K.ANAND (A-1921) Crl.MC.7481/2019 & Crl.MC.7484/2019 2 RESPONDENTS/STATE/COMPLAINANT: 1 INCOME TAX OFFICER, CORPORATE WARD 1(1), KOCHI, OFFICE OF THE ADDL. COMMISSIONER OF INCOME TAX , CORPORATE RANGE-I, KOCHI, 5TH FLOOR, C.R.BUILDING, I.S.PRESS ROAD, KOCHI-682018. 2 STATE OF KERALA, REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM-682031. R1 BY ADV.SRI.JOSE JOSEPH, SC, FOR INCOME TAX R2 BY ADV.SRI.E.C.BINEESH, PUBLIC PROSECUTOR THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 09.03.2021, ALONG WITH CRL.MC.7484/2019(E), THE COURT ON THE SAME DAY PASSED THE FOLLOWING: Crl.MC.7481/2019 & Crl.MC.7484/2019 3 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE P.SOMARAJAN TUESDAY, THE 09TH DAY OF MARCH 2021 / 18TH PHALGUNA, 1942 Crl.MC.No.7484 OF 2019(E) AGAINST THE ORDER/JUDGMENT IN CC 259/2017 OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE (EO),ERNAKULAM PETITIONERS/ACCUSED NO.1 TO 6: 1 M/S.AMALGAM NUTRIENTS AND FEEDS LTD. PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003, REP. BY ITS MANAGIANG DIRECTOR & PRINCIPAL OFFICER, KEYA THARAKAN, AGED 39 YEARS, D/O.ABRAHAM JOHN THARAKAN. 2 KEYA THARAKAN AGED 41 YEARS D/O.SHRI ABRAHAM THARAKAN, MANAGING DIRECTOR, M/S.AMALGAM NUTRIENTS AND FEEDS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003. 3 JANI UTHUP CHACKO AGED 74 YEARS S/O.CHIRAKAROTE CHACKO UTHUP, DIRECTOR, M/S.AMALGAM NUTRIENTS AND FEEDS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003. 4 ABRAHAM JOHN THARAKAN AGED 78 YEARS S/O.MR.JOHN THARAKAN, DIRECTOR, M/S.AMALGAM NUTRIENTS AND FEEDS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003. Crl.MC.7481/2019 & Crl.MC.7484/2019 4 5 THEKKEY KOTIAZHATH VENUGOPAL AGED 75 YEARS DIRECTOR, M/S.AMALGAM NUTRIENTS AND FEEDS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003. 6 MATHEW JOSE AGED 75 YEARS DIRECTOR, M/S.AMALGAM NUTRIENTS AND FEEDS LTD., PLOT NO.9XXIV/1604, AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN-682003. BY ADVS. SRI.S.RAJEEV SRI.K.K.DHEERENDRAKRISHNAN SRI.V.VINAY SRI.D.FEROZE SRI.K.ANAND RESPONDENTS/STATE/COMPLAINANT: 1 INCOME TAX OFFICER, CORPORATE WARD 1(1), KOCHI, OFFICE OF THE ADDL. COMMISSIONER OF INCOME TAX CORPORATE RANGE-I, KOCHI, 5TH FLOOR, C.R.BUILDING, I.S.PRESS ROAD, KOCHI-682018. 2 STATE OF KERALA, REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM-682031. R1 BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX R2 BY ADV. SRI. RAMESH CHAND, PUBLIC PROSECUTOR THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 09.03.2021, ALONG WITH CRL.MC.7481/2019(E), THE COURT ON THE SAME DAY PASSED THE FOLLOWING: Crl.MC.7481/2019 & Crl.MC.7484/2019 5 ORDER Following the legal position settled by the Apex Court in Prem Dass v. Income Tax Officer [AIR 1999 SC 1079 = (1999) 5 SCC 241] this Court in Crl.M.C.No.5669/2020 dated 11.02.2021 had laid down that a mere failure to pay the tax based on self assessment return will not attract the mischief under Section 276 C(2) of Income Tax Act and also laid down that the decision rendered by this Court in G.Viswanathan v. Income Tax Officer, A-Ward, Parameswar Nagar (1987 Vol. 167 ITR 103) is not good law. The relevant portion of the judgment in Crl.M.C.No.5669/2020 is extracted below for reference: “4. A mere perusal of the said provision would show that the Explanation was given after sub- section(1) and (2) and not before sub- section(2). It would prima facie Crl.MC.7481/2019 & Crl.MC.7484/2019 6 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 .........” The issue involved in the instant case is with respect to the failure to pay tax based on a self assessment return and cognizance Crl.MC.7481/2019 & Crl.MC.7484/2019 7 taken thereof under Section 276 C(2) of the Income Tax Act. Hence the complaint and the further proceedings are hereby quashed. Crl.M.Cs. are allowed accordingly. Sd/- P.SOMARAJAN JUDGE SPV Crl.MC.7481/2019 & Crl.MC.7484/2019 8 APPENDIX OF Crl.MC 7481/2019 PETITIONERS' EXHIBITS: ANNEXURE I CERTIFIED COPY OF THE COMPLAINT ALONG WITH DOCUMENTS IN C.C.NO.258/2017 ON THE FILE OF THE ADDL. CHIEF JUDICIAL MAGISTRATE COURT (EO) ERNAKULAM. ANNEXURE II TRUE COPY OF THE JUDGMENT DATED 4.6.2019 IN WPC.NO.3278/19 PASSED BY THIS HON'BLE COURT. RESPONDENTS' EXHIBITS: NIL //TRUE COPY// PA TO JUDGE Crl.MC.7481/2019 & Crl.MC.7484/2019 9 APPENDIX OF Crl.MC 7484/2019 PETITIONER'S/S EXHIBITS: ANNEXURE I CERTIFIED COPY OF THE COMPLAINT ALONG WITH DOCUMENTS IN C.C.NO.259/2017 ON THE FILE OF THE ADDL. CHIEF JUDICIAL MAGISTRATE COURT (EO) ERNAKULAM. ANNEXURE II TRUE COPY OF THE JUDGMENT DATED 4.6.2019 IN WPC.NO.3278/19 PASSED BY THIS HON'BLE COURT. RESPONDENTS' EXHIBITS: NIL //TRUE COPY// PA TO JUDGE "