Chetu Sao V. Union of India, through the Assistant Commissioner of Income tax, Central Circle, Dhanbad and Ashok Kumar Mandal, Assistant Commissioner of Income Tax, Central Circle, Dhanbad

Cr.M.P./2836/2014

AI Insights

The case revolves around a criminal proceeding initiated against Chetu Sao, the director of M/s. Lal Ferro Alloys Company Private Limited, for failing to file Income Tax Returns (ITR) on time for the assessment years 2005-06 to 2010-11, under section 276 CC of the Income Tax Act, 1961. The complaint was filed by the Union of India through the Income Tax Department. Subsequently, the petitioner sought to compound the offence, which was accepted by the Director General of Income Tax (Inv.), Patna, following the guidelines of the CBDT Circular No. 25/2019. The compounding involved the payment of a fee and was officially recorded, leading to the quashing of the criminal proceedings by the High Court.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 814340 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 31-03-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ADITYA MOHAN KHANDELWAL AMRITA SINHA
• Assessee Lawyers: ASHISH SHEKHAR
• Keywords: Compoundable offence; Compounding application; Income Tax Act; Quashing of criminal proceeding; ITR non-filing
• Section: 276 CC; 279(2)

Judgement Text

" IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr. M.P. No. 2836 of 2014 ------ Chetu Sao … ... Petitioner Versus 1. Union of India, through the Assistant Commissioner of Income tax, Central Circle, Dhanbad, Room No. 406, City Centre, Lubi Circular Road, P.O. + P.S. Dhanbad-826001 2. Ashok Kumar Mandal, son of late PanchanandMandal, Assistant Commissioner of Income Tax, Central Circle, Dhanbad, P.O.+P.S. Dhanbad, Room No. 406, City Centre, Lubi Circular Road, Dhanbad. … … Opp. Parties -------- CORAM: HON’BLE MR. JUSTICE NAVNEET KUMAR -------- For the Petitioner : M/s. Ashish Kr. Shekhar, Adv. For the Opp. Parties : M/s. Aditya Mohan Khandelwal Amrita Sinha, Advocates -------- Order No. 05: Dated: 31st March, 2022 1. Learned counsel for the parties is present. 2. Heard the parties. 3. It has been pointed out by the learned counsel for the petitioner that this Criminal Miscellaneous Petition has been preferred for quashing the entire criminal proceeding arising out of the Complaint Case No. 7 of 2012 including the order taking cognizance dated 07.09.2012 passed by the learned Special Judge, Economic Offence, Ranchi, by which the cognizance for the alleged offence u/s 276 CC of Income Tax Act, 1961 has been taken against the petitioner Chetu Sao being the Director of M/s. Lal Ferro Alloys Company Private Limited, as the Complaint Case No. 7 of 2012 was filed by the opposite party nos. 1 & 2 against the petitioner alleging therein that being the director of the said company M/s. Lal Ferro Alloys Company Private Limited committed the offence u/s 276 CC of Income Tax Act as he has not filed the ITR in due time for the assessment year 2005-2006 to 2010-11. 4. Now, it has been submitted that since the alleged offence under section 276 CC of Income Tax Act is compoundable offence and the matter has now been compounded by the competent authority which is evident from the Annexure-A of the I.A. No. 4743 of 2020 which has been filed on behalf of the petitioner and available on record. 5. On the other hand, learned counsel for the Opposite Parties Nos. 1 & 2 of the Income Tax Department did not controvert the facts that the offence which was alleged against the petitioner was compoundable in nature and it has been compounded by the competent authority and admitting the genuineness and correctness of the Annexure A of I.A. No. 4743 of 2020. 6. Having heard the parties, perused the record of the case. 7. It is found that the learned court below has taken cognizance against the accused petitioner for the offence punishable u/s 276 CC of Income Tax Act which is a compoundable offence. In the capacity of being the director of M/s. Lal Ferro Alloys Company Private Limited, petitioner had not filed the ITR for the assessment year 2005-06 to 2010-11 in due time. Thereafter, it appears that the petitioner being the director of the said company has made an application for compounding the offence before the Director General of Income Tax (Inv.) Patna being the competent authority. The said application for compounding the offence which is at Annexure A of the I.A. No. 4743 of 2020 and the competent authority, after verification of the case of the M/s. Lal Ferro Alloys Company Private Limited, accepted the prayer of the petitioner for compounding the offence on 22.11.2019 in the light of the CBDT Circular No. 25/2019 dated 09.09.2019. Further, it is found from the I.A. 4743 of 2020, filed on behalf of the petitioner, that vide letter dated 13.12.2019 M/s. Lal Ferro Alloys Company Private Limited, was directed to deposit a sum of Rs. 61,000/- (Rupees Sixty One Thousand Only) as compounding fees as per compounding guidelines and after receiving the said letter, the petitioner has deposited the compounding fee and submitted a copy of challan before the concerned authority. 8. Further it is manifest that the concerned authority after being satisfied that it is a fit case for compounding the offence, the Director General Income Tax (Inv.) Patna, in exercise of the powers vested by virtue of the provision of Sub-section 2 of section 279 of the Income Tax Act, 1961 compounded the offence u/s 276 CC of Income Tax Act for the assessment year 2005-06 to 2010-11 committed by M/s. Lal Ferro Alloys Company Private Limited (PAN-AABCL1243J). 9. It is further found that since the competent authority namely Director General of Income Tax (Inv.) Patna u/s 279(2) of Income Tax Act has compounded the offence u/s 276 CC of Income Tax Act of M/s. Lall Ferro Alloys Company Private Limited, against the petitioner then it is found that it is just and fair to quash the entire criminal proceeding arising in the wake of the Complaint Case No. 7/2012 including the order dated 07.09.2012 passed by the learned court below against the petitioner . 10. In the backdrop, this Criminal Miscellaneous Petition is allowed and impugned order dated 07.09.2012 and the subsequent proceedings thereof against the petitioner passed by the learned Special Judge, Economic Offence, Ranchi in Complaint Case No. 7/2012 is set aside against the petitioner. 11. I.A. No. 4743 of 2020 also gets disposed of. 12. Let a copy of this order along with the order of compounding of the offence passed by the concerned authority of the income tax department, which is at Annexure – A, of I.A. No. 4743 of 2020 be sent to the concerned court below. (Navneet Kumar, J.) MM "