Smt. Shashi Jain V. Deputy Commissioner of Income Tax Investigation Circle-II(1), Ludhiana

CRR/769/2001

AI Insights

The case revolves around the alleged willful default by M/s Shipley Hosiery and Textile, Ludhiana, and its partners, including Smt. Shashi Jain, in filing an income tax return within the statutory period for the assessment year 1985-86. The Income Tax Department imposed a penalty for the late filing, which was contested through various judicial proceedings. The Additional Chief Judicial Magistrate initially discharged the accused, but this decision was reversed by the Sessions Judge. The High Court's decision to set aside the Sessions Judge's order was based on the finding that Smt. Shashi Jain was not responsible for the late filing as she was not a partner at the time the return was filed.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 681342 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 08-01-2009
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: RAJESH SETHI; SACHIN GUPTA
• Assessee Lawyers: PIYUSH JAIN
• Keywords: Discharge; Income Tax Return; Penalty; Revision petition; Willful default
• Section: 274; 271(1)(a)

Judgement Text

"IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH Criminal Revision No.769 of 2001 Date of Decision: January 08, 2009 Smt.Shashi Jain ...........Petitioner Versus Deputy Commissioner of Income Tax Investigation Circle-II(1),Ludhiana ..........Respondent Coram: Hon'ble Mrs.Justice Sabina Present: Mr.Piyush Kumar Jain, Advocate for the petitioner. Mr.Rajesh Sethi, Senior Standing counsel for the respondent with Mr. Sachin Gupta, Advocate * * * Sabina, J. Assistant Commissioner of Income-tax Investigation Circle II (1), Ludhiana filed a complaint alleging therein that accused No.1-M/s Shipley Hosiery and Textile Wait Ganj, Ludhiana had filed their income tax return for assessment year 1985-86 on 3.8.1987 at Rs. 1,02,768/- which was duly verified by Smt. Shashi Jain-accused No.2 as a partner of the firm. The Income Tax return should have been filed latest by 31.7.1985 but the same has been filed late by more than two years. Notice was issued to the accused under Sections 274 and 271 (1) (a) dated 27.11.1987 requiring the accused to show cause as to why order imposing penalty for the said default be not made. Accused furnished an explanation on 24.2.1989. A penalty of Rs. 10582/- was imposed on the accused vide order dated 7.3.1989. Accused preferred an appeal against the said order and the same was dismissed by the Deputy Commissioner of Income Tax, (Appeals) Ludhiana vide order dated 8.2.1980. Hence, the Criminal Revision No.769 of 2001 -2- accused were guilty of willful default in furnishing the return of the income tax within the statutory period permissible under law. Complainant led its pre-charge evidence. Vide order dated 30.3.1996, the Additional Chief Judicial Magistrate, Ludhaina discharged the accused and held that no case was made out against the accused to frame a charge against them. Aggrieved by the same, the income tax department filed a revision petition against the said order and the same was allowed by the Sessions Judge, Ludhiana vide order dated 1.10.1996. The Additional Chief Judicial Magistrate, Ludhaina, after remand vide order dated 3.6.2000 discharged accused No.2 (present petitioner) and ordered that the charge be framed against the firm (accused No.1). Aggrieved by the said order, Income tax department again preferred a revision petition before the Sessions Judge, Ludhiana. Vide order dated 1.3.2001, the revision petition was allowed and the Additional Chief Judicial Magistrate, Ludhiana was directed to proceed further in the case in accordance with the provisions of law after framing appropriate charges against the accused/respondents. Hence, the present revision petition by the petitioner-Smt. Shashi Jain. Learned counsel for the petitioner has submitted that there was not sufficient material on record to connect that the petitioner was responsible for filing the return at the relevant time. There were other partners of the firm also. In fact, the signatures of the petitioner had been taken on the return, inadvertently, by the accountant although the petitioner was no longer a partner of the firm on 3.8.1987 when the income tax returns were filed. Advance tax had been deposited by the firm and hence, there Criminal Revision No.769 of 2001 -3- was no loss of revenue to the income tax department. Learned counsel for the respondent has argued that the return had been presented under the signature of the petitioner and as such, she was liable to be prosecuted along with firm as the income tax return had not been filed within the statutory period. It was noticed by the trial Court that Chaman Lal one of the active partners of the firm had died on 20.12.1986. Smt. Shubh Jain and Shashi Jain, partners of the firm retired on 20.12.1986 and the new partners i.e. Nagina Devi and Subhash Jain joined the firm . Since the petitioner stood already retired as a partner from the firm, there was no occasion for her to file return on 3.8.1987. Hence, there was not sufficient material on record to connect that the petitioner was responsible for filing the income tax return at the relevant time i.e. 3.8.1987. In these circumstances, the learned Sessions Judge erred in reversing the order of discharge of the petitioner passed by the trial Court vide its impugned judgment dated 1.3.2001. Accordingly, this petition is allowed. The impugned judgment and order passed by the Sessions Judge Ludhiana dated 1.3.2001 is set aside. ( Sabina ) Judge January 08, 2009 arya "