SRI H NAGARAJA V. INCOME TAX DEPARTMENT

CRL.P/1449/2016

AI Insights

The case involves Sri H Nagaraja, the petitioner, who faced prosecution under Section 276CC of the Income Tax Act for allegedly filing his income tax return late for the assessment year 2008-2009. The return was filed 71 days late due to the delayed return of documents seized during a departmental search. The Income Tax Department accepted the belated return and passed an assessment order, but later initiated criminal proceedings for the delay. The High Court found that the proceedings were contradictory and unsustainable, leading to the quashing of the case against the petitioner.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 699574 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 18-01-2017
• Assessment Year: misc
• Other Referred Cases: C.P.Yogeshwara vs. The Income Tax Department
• Laws Referred To: Income Tax Act, 1961, Code of Criminal Procedure, 1973
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JEEVAN NEERALGI
• Assessee Lawyers: M V SHESHACHALA
• Keywords: Delay in filing; Economic offences; Income Tax; Quash Proceedings
• Section: 143(3); 139(1); 132(1); 200; 153(A); 279(1); 276CC; 482

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18th DAY OF JANUARY, 2017 BEFORE THE HON’BLE MR. JUSTICE ANAND BYRAREDDY CRIMINAL PETITION NO.1449 OF 2016 Between: Sri H Nagaraja, S/o Hanumanthappa, Aged 43 years, Residing at No.6 and 7, “Sri Ganesh Krupa”, New Bank Colony, Konanakunte, Bengaluru – 560 002. …Petitioner (By Shri M V Sheshachala, Senior Advocate for Shri Aravind V Chavan, Advocate) And: Income Tax Department, By Deputy Commissioner of Income Tax, Central Tax, Central Circle – 2(2), C R Building, Queens Road, Bengaluru – 560 001. …Respondent (By Shri. Jeevan Neeralgi, Advocate) --- 2 This Criminal Petition is filed under Section 482 of Cr.P.C. praying to quash the proceedings taking cognizance of the offences p/u/s 276CC of the I.T. Act registered in C.C.No.17/2015 before the Spl. Court (Economic Offences), Bangalore for delay in filing the return of income by 106 days. This Petition coming on for admission this day, the Court made the following:- O R D E R Heard the learned Senior Advocate Shri M V Sheshachala appearing for the counsel for the petitioner. The facts leading up to this petition are as follows: 2. The petitioner has filed his return of income for the assessment year 2008-2009 for the accounting period 01.03.2007 to 31.03.2008. The last date to file the return was 30.10.2008, in terms of Section 139(1) of the Income Tax, 1961 (Hereinafter referred to as the ‘IT Act’, for brevity). It transpires that a search had been conducted in terms of Section 132(1) of the IT Act on the premises of the assessee, on 06.01.2009. Thereafter a notice had been issued on 8.3.2010, under Section 153-A of the IT Act 3 calling upon the petitioner to file the return of income within 30 days. It was not filed within time, but it was filed on 18.6.2010, after a delay of 71 days, incorrectly shown as 106 days in the complaint filed by the respondent. The reason for such belated filing, according to the petitioner, was that documents which had been seized by the department were not returned promptly and they were returned only after much delay and this in turn lead to a delay in the petitioner filing his returns. Thereafter on 28.12.2010 the Department, acting upon the belated returns filed, had passed an Assessment Order under Section 143(3) read with Section 153-A of the IT Act. Thereafter on 18.12.2014 a Sanction was issued in terms of Section 279(1) of the Act and on 29.01.2015 a complaint was filed under Section 200 of the Code of Criminal Procedure, 1973, before the Special Court for Economic Offences alleging offences punishable under Section 276CC of the IT Act. The Magistrate having taken cognizance on 4 16.02.2015 and having issued process, the petitioner is before this Court. 3. Incidentally it is also pointed out by the learned Senior Advocate that, parallely on 12.04.2011 there had been a second search conducted on the premises of an employee of the assessee, one Adlene Kagoo, and a notice had been issued pursuant thereto on 29.03.2012 under Section 148 of the Income Tax Act calling upon the petitioner to file a fresh return, as the assessment stood reopened. On 10.12.2012 the assessee had issued a letter calling upon the Department to accept the return of income already filed on 18.06.2010, in response to the said notice. It is pursuant to this that a Re-Assessment Order was passed on 13.03.2013 under Section 143(3) read with Section 147 of the Act. Therefore, the return filed was accepted and the amount reflected in the Assessment Order dated 28.12.2010 was included. These subsequent events in so far as the second search of the premises of an 5 employee of the petitioner and the further orders passed had not been taken into account while issuing the initial notice against the petitioner and the Sanction Order having been obtained without reference to the parallel proceedings and a complaint also having been filed ignoring the said events, it is stated, would vitiate the proceedings. 4. Apart from the fact that belated return filed and which has been accepted as aforesaid would take away the illegality if any in not having complied with the rigour of the law and therefore the prosecution is an exercise in futility for the Department having accepted the return could not then turn around and claim that the Assessment has not been filed or has been filed belatedly and has been ignored. When that is not the case, the prosecution sought to be brought against the petitioner would fail on that account as well and it is this aspect which is emphasized. Reliance is placed on an earlier order of this Court passed in a similar circumstance in Crl.P.No.1998/2016 in the case of 6 C.P.Yogeshwara vs. The Income Tax Department dated 04.01.2017. 5. The learned counsel for the respondent, Sri Jeevan Neeralgi would make a weak attempt to sustain the proceedings. However, on the reasoning as put forth by the learned Senior Advocate it cannot be said that the Department is justified in acting upon the belated returns filed and also to claim that there has been default in filing the returns. This would be a contradiction in terms. Consequently, the petition is allowed. The prosecution initiated against the petitioner in terms of Section 276 CC of the Income Tax Act cannot be sustained. The entire proceedings in case C.C. No.17/2015 on the file of Special Court for Economic Offences, Bengaluru stands quashed. Sd/- JUDGE ykl "