ANIL KUMAR V. THE UNION OF INDIA THROUGH THE COMMISSIONER OF INCOME TAX DEPARTMENT RANCHI

Cr.M.P./4352/2018

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The case involves petitioners Anil Kumar, Rajan Prasad, and Smt. Abha Prasad, directors of M/s Sparkle World Private Ltd., who were accused of failing to file an income tax return on time for the assessment year 2015-16, which led to allegations of tax evasion under Sections 276CC and 278B of the Income Tax Act. The Income Tax Department initiated criminal proceedings after receiving contradictory replies from the petitioners regarding a notice issued under Section 148 of the Income Tax Act. The petitioners later filed the return and paid the due taxes, which led to the court suggesting a compromise and referral to Lok Adalat.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 672331 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 15-05-2023
• Assessment Year: misc
• Other Referred Cases: Sasi Enterprises Versus Assistant Commissioner of Income Tax, (2014) 5 SCC 139
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: R N SAHAY; ANURAG VIJAY
• Assessee Lawyers: RAHUL KUMAR; ZAID AHMED
• Keywords: Cognizance; Compounding of Offence; Income Tax Return; Lok Adalat; Tax Evasion
• Section: 148; 276CC; 278B

Judgement Text

"IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr.M.P. No. 4352 of 2018 ------ 1. Anil Kumar 2. Rajan Prasad 3. Smt. Abha Prasad .... .... …. Petitioners Versus 1. The Union of India through the Commissioner of Income Tax Department, Ranchi 2. Sri Ramadhin Rabidas .... .... .... Opp. Parties CORAM: HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY For the Petitioners : Mr. Rahul Kumar, Advocate Mr. Zaid Ahmed, Advocate For the Income Tax : Mr. R.N. Sahay, Sr. S.C. Mr. Anurag Vijay, A.C. to Sr. S.C. ------ Order No.08 Dated : 15.05.2023 Instant petition has been filed for quashing the order taking cognizance dated 06.11.2017 passed by learned Special Judge, Economic Offences, Dhanbad in C.O. Case No.07 of 2017 whereby and whereunder cognizance has been taken under Sections 276CC and 278B of the Income Tax Act. 2. The gist of the prosecution case is that the petitioners are Directors of M/s Sparkle World Private Ltd. which is a Company carrying business of trading jewellery having PAN AARCS5815P having its office at Shashtri Nagar, Bank More, Dhanbad which deliberately neglected to file Income Tax Return for the assessment year 2015-16 in due time without any reasonable excuse with intent to evade tax liabilities. There was a transaction of Rs.1,29,67,027/- during assessment year 2015-16. A notice was issued by the Assessing Officer on 23.08.2017 which was duly served and two replies were received on 09.10.2017 & 20.10.2017. The two replies which were filed, were contradictory statement and a product of afterthought. The petitioners had not informed about the change of business from jewelleries to sand and mining contract and their return was not filed with ulterior motive of tax evasion. In view of violation of Section 276CC of the Income Tax Act, on the basis of official complaint, cognizance under Sections 276CC and 278B of the Income Tax Act which is under challenge in the instant petition. 3. It is submitted by learned counsel on behalf of petitioners that notice under Section 148 of the Income Tax Act was issued on 23.08.2017. The reply was submitted on 09.10.2017 & 20.10.2017. 4. After filing of the reply, the petitioners also filed return on 29.01.2018 in which the tax of Rs.1,65,620/- was paid for the Assessment Year 2015-16. 5. It is submitted by the learned counsel, Mr. Anurag Vijay on behalf Income Tax Department that taxes were indeed paid in this case, but only after the official Complaint was filed and the criminal law was set into motion. It is submitted that in this circumstance where return has been filed after institution of the complaint, the cognizance cannot be quashed in view of ratio decided in Sasi Enterprises Versus Assistant Commissioner of Income Tax, (2014) 5 SCC 139, para 24, 28. It is submitted that a supplementary counter affidavit has been filed regarding Central Board of Direct Tax, Compounding Guidelines, 2014 wherein detailed procedures for compounding of offence by the competent authority have been laid down. 6. After having considered the rival submission advanced on behalf of both sides, there appears to be an element of settlement considering the fact that there was no delay in reply to the notice issued, Income Tax Return have been filed and the Income Tax for the relevant year has also been paid. Instant petition is disposed of with this observation and the learned Court below is directed to explore the possibility of compromise between parties and refer the matter to Lok Adalat as the offences are compoundable in nature. (Gautam Kumar Choudhary, J.) Anit "