SHRI. C.P. GANGADHARESHWARA V. THE INCOME TAX DEPARTMENT

CRL.P/1999/2016

AI Insights

This case involves a criminal petition filed by Shri C.P. Gangadhareshwara challenging the proceedings initiated against him under Section 276 CC of the Income Tax Act, 1961 by the Income Tax Department. The proceedings were based on an allegation that the petitioner failed to file his income tax return in response to a notice under Section 153 of the IT Act. The Special Court (Economic Offences) in Bangalore had taken cognizance of the complaint, which was filed after obtaining sanction from the Commissioner of Income Tax. The petitioner contended that his return was filed, though belatedly, before the sanction was granted, a fact that was overlooked by the Commissioner. The High Court, upon reviewing the facts, found that the prosecution was not maintainable as the return was eventually filed and accepted, leading to the quashing of the proceedings.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 755343 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 04-01-2017
• Assessment Year: misc
• Laws Referred To: Code of Criminal Procedure, 1973, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: NARENDRA NAIK; JEEVAN NEERALAGI
• Assessee Lawyers: KIRAN JAVALI
• Keywords: Economic offences; Income Tax; Prosecution; Quash Proceedings; Return of Income; Sanction; Special Court
• Section: 153; 200; 279; 482; 276 CC

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 04TH DAY OF JANUARY 2017 BEFORE THE HON’BLE MR. JUSTICE ANAND BYRAREDDY CRIMINAL PETITION No.1999 OF 2016 BETWEEN: Shri C.P. Gangadhareshwara, Son of Puttamadegowda, Aged 49 years, No.367, 1st “E” Cross, 7th Block, Banashankari 3rd State, Bangalore. …PETITIONER (By Shri Kiran S. Javali, Advocate) AND: The Income Tax Department, Assistant Commissioner of Income Tax, Central Circle 1(4), C.R.Buildings, Bangalore – 560 001. By Dr. Narendra Kumar Naik. …RESPONDENT 2 (By Shri Jeevan Neeralagi, Advocate) ***** This Criminal Petition filed under Section 482 code of Criminal Procedure, 1973, praying to quash the entire proceedings in C.C.No.37/2012 on the file of the Special Court (Economic Offences), Bangalore. This Criminal Petition coming on for Admission this day, the court made the following: O R D E R The present petition is filed questioning the correctness of the order dated 27.02.2012 in C.C.No.37/2012 passed by the Special Court (Economic Offences), Bangalore, taking cognizance of offences alleged. 2. The complaint is filed under Section 200 of the Code of Criminal Procedure, 1973, after obtaining prior sanction from the Commissioner of Income Tax in accordance with the provisions of Section 279 of the Income Tax Act, 1961 (hereinafter referred to as ‘the IT Act’, for brevity) alleging violation of Section 276 CC of the IT Act by the petitioner. As a result, a notice came to be issued to the petitioner under 3 Section 153 of the IT Act calling upon him to file his return and in spite of the notice, the accused had not filed his return in response thereto. The Commissioner of Income Tax who had accorded the sanction, had proceeded on the basis that no return had been filed as sought for in this case. 3. It is pointed out by the learned counsel for the petitioner that this is an incorrect presumption on the part of the Commissioner of Income Tax, as on the date of granting sanction, return of income had not been filed. Albeit it was filed after a delay or beyond the period of delay. This not having been noticed by the Commissioner of Income Tax, he had granted sanction and consequently the complaint had been filed. The fact that the petitioner had already filed his return of income as on the date of the order of sanction, which had gone unnoticed, is not in dispute and the learned counsel for the respondent would endorse the same. The tenor of Section 276 CC of the IT Act contemplates that if a person has failed to 4 furnish the return of income in time, it is then that the rigour of the section would be attracted. For, if the return of income had been filed belatedly or otherwise, the section cannot apply at all and therefore, the prosecution ranged against the petitioner is vitiated. Consequently, the petition would have to be allowed. It is also to be noticed that the section certainly reads that if the returns are not filed in due time, the rigour would be attracted. But, the fact remains that in the present case on hand, the returns are accepted and assessments are carried out, which would not be the same as holding that the returns filed belatedly have been held to have been nonest and therefore, the authorities have proceeded thereupon. This would make a difference to the situation and therefore, the contention that the section which prescribes that if the assessee fails to file the return within the time due, the rigour would be attracted, would stand diluted by virtue of the returns having been accepted and assessments having been carried out therein. 5 4. Consequently, the prosecution initiated against the petitioners in terms of Section 276 CC of the IT Act cannot be sustained. The entire proceedings in C.C.37/2012 stand quashed. The petition is allowed in terms as above. Sd/- JUDGE KS "