DR. MAHENDRA HARBOLA V. UNION OF INDIA

A482/21579/2021

AI Insights

Dr. Mahendra Harbola, a reputed doctor from Gorakhpur, filed an application under Section 482 of the Cr.P.C. to quash a non-bailable warrant and the proceedings of a complaint case against him under Section 276CC of the Income Tax Act. The complaint was filed by the Union of India, alleging failure to file income tax returns for several assessment years. Dr. Harbola contended that due to his father's prolonged illness, he was unable to file the returns on time, although he had been regular in filing them since 1990. He argued that all due taxes and interests were paid upon receiving notices under Section 148 of the Income Tax Act. The court decided to remand the case for a decision on the pending compounding application, keeping the non-bailable warrants in abeyance.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 725663 (HC-VARANASI)
• Appeal Type: Others
• Pronouncement Date: 02-12-2021
• Assessment Year: misc
• Other Referred Cases: Income-Tax Officer vs. Autofill And Ors. 1990 184 ITR 47 AP
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: GAURAV MAHAJAN
• Assessee Lawyers: ANIKET GUPTA; ONKAR NATH VISHWAKARMA
• Keywords: Compounding application; Income Tax Return; Mens Rea; Non-bailable warrant; Quash
• Section: 148; 276CC

Judgement Text

"Court No. - 77 Case :- APPLICATION U/S 482 No. - 21579 of 2021 Applicant :- Dr. Mahendra Harbola Opposite Party :- Union of India Counsel for Applicant :- Aniket Gupta,Onkar Nath Vishwakarma,Sr. Advocate Counsel for Opposite Party :- Gaurav Mahajan Hon'ble Gautam Chowdhary,J. Heard learned counsel for the applicant, Shri Ashish Agarwal, learned counsel for the Department. The present 482 Cr.P.C. application has been filed with the prayer to quash the non bailable warrant issued against the applicant as well as proceedings of Complaint Case no.1030 of 2019 (Union of India Vs. Mahendra Harbola), u/s 276CC of the Income Tax Act pending before Special Chief Judicial Magistrate, Varanasi. Learned counsel for the applicant submits that the applicant is a reputed doctor of district Gorakhpur. Further submission is that the applicant started his medical practice in the year 1990 and used to file his income tax regularly. Contention is that due to some unavoidable circumstances, he could not file his return for the assessment years 2011-12 to 2014-15 which fact has been clearly stated in the assessment order passed by the assessing authority on 08.12.2018. It is also submitted that the applicant's father was ailing from a neurological disorder and was bed ridden for a period of five years and therefore the applicant could not get sufficient time for his professional practice as well as for the necessary compliances required under the income tax laws. Submission is that the all deposition of tax was made without any prior intimation or notice by the department. Learned counsel for the applicant also submits that after deposition of taxes by the applicant, notices u/s 148 of the Income Tax Act were issued to the applicant on 26.03.2018 for the AY 2011-12, 2012-13, 2013-14, 2014-15 respectively. Next submitted that immediately after receiving the aforesaid notices the applicant deposited the interest amount for AY 2012-13, 2013-14, 2014-15 on 07.04.2018. Further contention is that the assessee/ applicant has already deposited all the tax along with interest with the department. It is also contended that a complaint in this regard was filed against the applicant and after coming to the knowledge of the filing of the complaint the applicant filed a compounding application dated 08.08.2019 before the learned Chief Commissioner of Income Tax, Allahabad praying for compounding of the offence alleged to have been committed u/s 276CC of the Income Tax Act. Learned counsel for the applicant in this regard has also placed reliance upon the judgment of Andhra High Court in the case of Income-Tax Officer vs. Autofill And Ors. 1990 184 ITR 47 AP which are as under :- \"5. It is thus in rare and exceptional cases where penalty under section 271(1)(a) of the Income-tax Act is found to be not sufficiently deterrent and that mens rea was present that conviction under section 276CC is called for and not otherwise. In the instant case. The respondents filed an explanation stating that their clerk, one Hanumanth Rao, was not well and, therefore, the day-to-day accounts could not be finalised and the profit and loss account could not be drawn up so as to file the return in time. They have also stated that they were not conversant with the preparation of the profit and loss account and the balance-sheet and thus the delay was neither willful nor wanton. No doubt, this explanation was not accepted by the court below, but the question that still remains is, whether there is mens rea present to warrant a conviction for the offence for which the respondents were prosecuted. In the present case, there is no dispute that advance tax was paid and thus there was no evasion in payment of tax. Further, they have paid penalty for delayed filing of return apart from penal interest on the differential amount between the tax assessed and the tax paid. Conviction under section 276CC is an extreme and exceptional resort and gets warranted only when wilfulness in failure to submit the return in time is established beyond all reasonable doubt and there should be the presence of mens rea, a bad motive and a guilty mind. In the absence of this, no conviction shall follow the prosecution under section 276CC of the Income-tax Act, there is a clear explanation given by A-3 that he was not conversant with the preparation of the profit and loss account and the balance-sheet. Equally so is his colleague. Satyanarayana. Their clerk happened to fall ill. Even if, for any reason, the explanation does not receive acceptance, still the conduct of the respondents in paying the advance tax. The penal interest and penalty and want of mens rea absolve them from criminal liability. I, accordingly, find no merit in these appeals. The appeals are, therefore, dismissed.\" Learned counsel for the applicant argued that the application dated 8.8.2019 is still pending and before deciding the application the court below proceeded and the applicant has been summoned. Both the counsel agreed upto this extent and counsel for the opposite party no.2 submits that the compounding application dated 8.8.2019 may be decided. Considering the facts and circumstances of the case, this court feels that an adequate opportunity should be provided before passing of such orders. Hence, the application is partly allowed and matter is remanded back to the court below to pass appropriate orders on the compounding application dated 8.8.2019 within a period of two months without granting any unnecessary adjournments to either of the parties, in accordance with law. Till the disposal of the compounding application dated 8.8.2019 the non-bailable warrants issued against the applicant shall be kept in abeyance. With the aforesaid observations this applications is finally disposed of. Order Date :- 2.12.2021 shiv "