Smt. Rajani W/o Ashok Lad V. The Assistant Commissioner of Income Tax, Circle-1, Ballary

CRL.P/101499/2017

AI Insights

Smt. Rajani, the petitioner, sought to quash criminal proceedings against her for alleged non-payment of self-assessment tax and other dues for the assessment year 2009-10, as required under Sections 140A and 156 of the Income Tax Act. The Assistant Commissioner of Income Tax, Ballary, was the respondent. The proceedings were initiated after Rajani failed to respond to notices and did not pay the assessed tax, which exceeded Rs. 1,00,000. The court considered the materials presented, including the assessment order and show-cause notice, and found sufficient grounds to proceed with the criminal charges under Section 276C of the Act.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 690519 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 29-11-2021
• Assessment Year: misc
• Other Referred Cases: G.Vishwanathan Vs. Income Tax Officer, P.Jayappan Vs. S.K.Perumal, Income Tax Officer
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: Y V RAVIRAJ
• Assessee Lawyers: S S YALIGAR
• Keywords: Culpable Mental State; Income tax evasion; Quash Criminal Proceedings; Self-assessment tax; Willful default
• Section: 143(3); 143(2); 156; 140A; 482; 276C; 278E

Judgement Text

"IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 29TH DAY OF NOVEMBER, 2021 BEFORE THE HON’BLE MRS.JUSTICE M.G.UMA CRL.P.NO.101499/2017 BETWEEN : SMT.RAJANI W/O ASHOK LAD, AGE : 42 YEARS, OCC: HOUSE WIFE, R/O HOUSE OF LADS, PALACE ROAD, SANDUR, DIST: BALLARY. … PETITIONER (BY SRI S.S.YALIGAR ADV. FOR SRI MRUTHYUNJAY TATA BANGI ADV.) AND : THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, BALLARY, THROUGH THE AUTHORIZED OFFICER, A.C.I.T., CIRCLE-I, BALLARY. ... RESPONDENT (BY SRI Y.V.RAVIRAJ, ADV.) THIS PETITION IS FILED UNDER SECTION 482 OF CRL.P.C PRAYING THIS COURT TO QUASH THE CRIMINAL PROCEEDINS INITIATED AGAINST THE PETITIONER BY THE RESPONDENT IN C.C.NO.246/2015 ON THE FILE OF II JMFC, BALLARI FOR THE OFFENCE PUNISHABLE UNDER SECTION 276C OF THE INCOME TAX ACT. THIS PETITION COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING: 2 : JUDGMENT : Though this petition is listed for admission, with the consent of learned counsel for the parties the same is taken up for final disposal. 2. The petitioner is before this Court seeking to quash the criminal proceedings initiated against her which is now pending in C.C.No.246/2015 on the file of the II Additional Civil Judge and JMFC Court, Ballari (“the Trial Court” for short) for the offence punishable under Section 276(c) of the Income Tax Act (“the Act” for short). 3. Brief facts of the case are that, it is the contention of the complainant/Assistant Commissioner of Income Tax, Circle-I, Ballari that the petitioner is an assessee filed e-returns with regard to the income for the assessment year 2009-10 on 30.09.2009, declaring her total income as Rs.1,81,00,710/-. She has shown Rs.29,62,405/- as taxable income with Rs.33,77,654/- as tax deducted 3 at source. The said e-filing of the income tax returns is as per Annexure-C. It is stated that the assessee should have paid self assessment tax of Rs.33,77,654/- on the admitted income before filing the return of income as per Section 140A of the Act. The assessee is also liable to pay such tax together with interest payable thereon. 4. It is stated that on scrutinizing the assessment under Section 143(2) of the Act a notice was issued to the asessee on 27.08.2010. The assessee was served with the notice to her declared address which is evidenced by the acknowledgement produced as per Annexure-E. The assessment under Section 143(3) of the Act was completed on 28.12.2011 determining the total taxable income at Rs.1,87,98,823/- and the tax payable by the assessee was Rs.51,90,530/- and the same was communicated to the assessee and the acknowledgment for having served the assessment order dated 29.12.2011 is as 4 per Annexure-G. In-spite of that, it is stated that the assessee had not made any payment and thereby committed an act of default in payment of the tax punishable under Section 276(c) of the Act. 5. It is contended that, the assessee failed to pay self assessment tax for the assessment year 2009-10 as required under Section 140A of the Act till filing of the complaint. She has also failed to pay the tax demanded under Section 156 of the Act, since the tax payable by the assessee exceeds Rs.1,00,000/-. She was served with the show-cause notice dated 20.02.2014 to appear before he officer or to respond in writing on or before 28.02.2014. The said notice was served on the assessee as per Annexure-I. However, the assessee neither appeared before the Officer nor filed any reason for non payment of self assessment tax. Thus the assessee willfully evaded payment of tax for the assessment year 2009-10 and contravened Section 156 punishable under Section 5 276C of the Act. It is also stated that there are statutory presumption under Section 278E of the Act against the assessee which is not rebutted therefore the complainant requested the Trial Court to take cognizance of the offence and to initiate legal action. 6. The Trial Court taking into consideration the averments made in the complaint supported by the documents produced, under the light of presumption under Section 278E of the Act proceeded to take cognizance of the offence, issued summons to the accused by registering C.C.No.246/2015. 7. The accused being the assesee is before this Court seeking to quash the criminal proceedings initiated against her for the offence punishable under Section 276C of the Act by invoking the inherent jurisdiction under Section 482 of Cr.P.C. 8. Heard Sri S.S.Yaligar, learned counsel for the petitioner and Sri Y.V.Raviraj learned Senior 6 Standing Counsel appearing for the respondent- Income Tax Department. 9. Learned counsel for the petitioner submitted that his arguments may be taken as heard and petition may be disposed off. 10. Learned counsel for the respondent submitted that, it is a clear case of evasion of tax in- spite of issuance of show cause notice, there was no response. Sufficient materials are placed before the Court to show that the assessment order and the show-cause notice were served on the assessee, but there was no reply. Under such circumstances, presumption under Section 278E of the Act operates and it is for the assessee to rebut the same. 11. Learned counsel for the respondent relied on the decision of the High Court of Kerala in G.Vishwanathn Vs. Income Tax Officer1 and the decision of the Hon’ble Apex Court in P.Jayappan 1 (1987) 65 CTR 0184 7 Vs. S.K.Perumal, Income Tax Officer2 to contend that when the complainant places sufficient materials alleging evasion of tax, presumption under Section 278E of the Act operates. Under such circumstances, the burden is on the assessee to show that there was no willful default. That being the situation this Court cannot intervene to quash the criminal proceedings by invoking inherent jurisdiction of the Court. Accordingly, prays for dismissal of the petition as devoid of merits. 12. Perused the materials including the trial court records. 13. The point that would arise for consideration of this Court is as follows: Whether the criminal proceedings initiated against the petitioner in C.C.No.246/2015 on the file of II Additional Civil Judge & JMFC, Bellary for the offence punishable under Section 276C 2 (1984) 42 CTR 0180 8 is liable to be quashed under Section 482 of Cr.P.C.? 14. My answer to the above point is in the ‘negative’ for the following : : REASONS : 15. The respondent-Income Tax Department represented by its authorized officer filed a private complaint before the Trial Court against the petitioner herein contending that she has contravened Section 156, which is punishable under Section 276C of the Act. It is specifically stated that the accused is an assessee as she being the proprietor of M/S VSL Transport Company. It is stated that she had filed the e-income tax returns for the assessment year 2009- 10 on 30.09.2009 declaring the total income Rs.1,81,00,710/- and paid Rs.29,62,405/-. The e- returns filed by the assessee was scrutinized under Section 143(2) of the Act and notice was served on the assessee as required under Section 143(2) of the 9 Act regarding assessment. The said notice was served on the assessee. But in-spite of that there was no reply. Since the total income assessed was Rs.1,87,98,823/- the assessee was liable to pay the tax at Rs.51,90,530/-. The copy of the assessment is produced by the complainant as per Annexure-F before the Trial Court. Annexure-G is also produced before the Trial Court for having served the said assessment order on the assessee. 16. Show cause notice dated 20.02.2014 was issued to the assessee proposing to initiate criminal action, providing an opportunity to appear before the officer concerned or to respond in writing. 17. The complainant specifically stated that, the assessee has not bothered to pay the tax which was assessed under the assessment order, in-spite of receiving of notice. Since the tax payable exceeds Rs.1,00,000/-, the assessee was served with the show cause notice dated 20.02.2014, calling upon her 10 to appear before the officer or to respond in writing about the said show cause notice and to show cause as to why further action should not be initiated against her. The complainant specifically stated that, even the said show cause notice was served on the assessee as per the document produced before the Trial Court as per Annexure-I. It is also stated that, the assessee neither appeared before the officer concerned nor filed any explanation for the show cause notice. She has also not paid tax assessed by the department and thereby she contravened Section 156 punishable under Section 176C of the Act. 18. My attention is drawn to Section 278E of the Act wherein there is presumption as to the culpable mental state on the part of the accused in committing the offence in question. The explanation appended to the section makes it clear that the culpable mental state includes intention, motive, 11 knowledge of a fact, or believe in or reason to believe a fact. 19. Learned counsel for the respondent filed a memo placing on record the details of the returns filed and the amount of the tax assessed. As per the memo the tax demanded as per Section 154 of the Act is Rs.54,59,500/- and a sum of Rs.10,31,857/- is collected up to the date. The balance amount of Rs.44,27,643/- is due from the assessee, which she has evaded payment. In G.Vishwanathan (supra), the High Court of Kerala, held that where the offence actually committed or not is not a matter for consideration in a proceedings under Section 482 of Cr.P.C to quash the complaint it is a matter for evidence during the trial before the learned magistrate. 20. Hon’ble Apex Court in P.Jayappan (supra) again considered similar situation and held that, there is statutory presumption prescribed under 12 the Act and burden is on the accused to show that there was no willful default. The Court has to presume the existence of culpable mental state and absence of such mental state can be pleaded by the accused as a defence and it is for the Trial Court to decide the said issue at the stage of conclusion of the trial. 21. Thus, the position of law is very well settled when there is a presumption in favour of the revenue and when the assessee has not responded to the assessment order or the show cause notice that is already issued by the department calling upon her to pay the tax assessed for payment, she cannot seek indulgence of the Court for quashing the proceedings initiated against her. As rightly contended by the learned counsel for the respondent, the presumption referred to above is in favour of the revenue and it is for the accused to rebut the same during trial. 22. Therefore, I do not find any reason to quash the criminal proceedings initiated against the 13 petitioner. Hence I answer the above point in the ‘negative’ and accordingly the above petition is dismissed. Sd/- JUDGE EM "