SURESH G. SHOLAPURMATH V. INCOME TAX DEPARTMENT

CRL.P/101825/2023

AI Insights

The case involves a criminal petition filed by Suresh .G. Sholapurmath, a chartered accountant, seeking to quash the proceedings against him under the Income Tax Act, 1961. The proceedings were initiated based on allegations that he and another accused colluded to show a higher tax payment than actually made, thereby evading tax. The petitioner argued that the amount involved was less than Rs.25,000, which is immune from prosecution as per a government circular. The court referenced a similar case (Criminal Petition No.100389/2020) where a co-ordinate bench had quashed similar proceedings for a lesser amount, applying the same reasoning to the current case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 752406 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 28-08-2023
• Assessment Year: misc
• Other Referred Cases: Criminal Petition No.100389/2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: Y V RAVIRAJ
• Assessee Lawyers: SHRIHARSH NEELOPANT
• Keywords: Income Tax; Private complaint; Quash; Self-assessment tax; Material alteration
• Section: 276C(2); 277

Judgement Text

" - 1 - NC: 2023:KHC-D:9584 CRL.P No. 101825 of 2023 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 28TH DAY OF AUGUST 2023 BEFORE THE HON'BLE MR JUSTICE M.NAGAPRASANNA CRIMINAL PETITION NO. 101825 OF 2023 BETWEEN: SURESH .G. SHOLAPURMATH, AGE. 67 YEARS, OCC. CHARTERED ACCOUNTANT, COURT ROAD, GOKAK-591307, TQ. GOKAK, DIST. BELAGAVI. … PETITIONER (BY SRI. SHRIHARSH .A. NEELOPANT, ADVOCATE) AND: INCOME TAX DEPARTMENT, R/BY ITS INCOME TAX OFFICER, SHRI. ANGAD KUMAR, AGE. 41 YEARS, INCOME TAX OFFICER, WARD-1, GOKAK. … RESPONDENT (BY SRI. Y.V. RAVIRAJ, ADVOCATE) THIS CRIMINAL PETITION IS FILED U/SEC. 482 OF CR.P.C. SEEKING TO QUASH THE PRIVATE COMPLAINT AND ENTIRE PROCEEDINGS IN CC NO.685/2015 AS PER ANNEXURE-A AND B PENDING BEFORE THE PRL. JUDICIAL MAGISTRATE FIRST CLASS, GOKAK FOR OFFENCES PUNISHABLE U/S 276C(2) AND 277 OF INCOME TAX ACT, 1961, IN SO FAR PETITIONER/ACCUSED NO.2 IS CONCERNED. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING: VISHAL NINGAPPA PATTIHAL Digitally signed by VISHAL NINGAPPA PATTIHAL Date: 2023.09.20 11:42:33 +0530 - 2 - NC: 2023:KHC-D:9584 CRL.P No. 101825 of 2023 ORDER 1. The petitioner is before this Court calling in question the proceedings in C.C. No.685/2015 pending before the learned Principal Judicial Magistrate First Class, Gokak, registered for offences punishable under Sections 276(c)(2) and 277 of the Income Tax Act, 1961. 2. The learned counsel appearing for the petitioner would submit that the issue in the lis stands answered by the judgment rendered by the Co-ordinate Bench of this Court on identical set of facts interpreting the law, as is required to be applied, in the case at hand. 3. The Co-ordinate Bench in Criminal Petition No.100389/2020 disposed on 22.04.2021 has held as follows: 2. “Heard the learned counsel for the petitioners and learned Standing counsel appearing for respondent/complainant. 3. On the basis of a private complaint filed by the respondent, the aforesaid proceedings were initiated against the - 3 - NC: 2023:KHC-D:9584 CRL.P No. 101825 of 2023 petitioners. The sum and substance of the complaint averments are that accused No.1 is an assessee under the Income Tax Act. Accused No.2 is the Chartered Accountant providing Professional services in the name and style as ‘ M/ s. S. G. Sholapurmath and Company’ at Gokak. Accused No.1 filed returns of income for the assessment year 2008 -09, prepared and filed by accused No.2 , wherein the tax liability payable under Section 140(A) i.e., self assessment tax has been worked out and the tax due was claimed to have been paid on the date specified in each case. Further, counter file of the income tax challan duly stamped by the SBI, Gokak was filed with returns in support of payment of the tax. While processing the returns of the income tax of AST, it was found that the self assessment tax has been paid at a lesser amount than actually shown in the counter file of the income tax challan enclosed along with returns and extra digit was prefixed to the amount actually paid. Thus, showing the higher figure. It is alleged that the challan was materially altered after payment to show excess payment/ credit/ claim of Rs.1,800/- by accused No.1 in the returns filed by him. 4. It is alleged by the complainant that accused Nos.1 and 2 have colluded with each other in the fraudulent claim by paying less tax - 4 - NC: 2023:KHC-D:9584 CRL.P No. 101825 of 2023 but claiming as if they have made higher payment of tax thereby evaded the payment of tax and therefore, liable for prosecution under Section 276C(2) of I.T. Act, 1961 . 5. The learned counsel for the petitioners would contend that as per circular F.No.285/160/90/IT(INV)/190 dated 07 .02.1991 issued by Government of India Ministry of Finance, the income escaping assessment upto a sum of Rs.25 ,000/- is immune from prosecution. In the present case, the tax amount involved is less than Rs.25,000/- and therefore, he submits that proceedings are liable to be quashed. 6. The learned counsel for the respondent would submit that as per the above circular, if the amount is less than Rs.10,000/-, the prosecution need not be initiated for an offence under Section 276C(2) of the Act. 7. In the instant case, according to the complainant, the self assessment tax was paid at lesser amount than shown in the counterfoil of the income tax challan filed along with the return and the challan was materially altered after payment to show excess payment of Rs.1 , 800/- by accused No.1 in the return filed by him. 8. According to the circular in - 5 - NC: 2023:KHC-D:9584 CRL.P No. 101825 of 2023 F.No.285 /160/90 /IT(INV)/190 dated 07 .02.1991 , wherein para 5 ( iv) Clause 4 of the said circular, reads as under:- “( iv) Section 276C(2) willful attempt to evade payment of taxes etc. Prosecution need not be initiated for an offence under this section if the aggregate amount of tax interest and penalty involved is less than Rs.10,000/-. This limit would be Rs.1 ,000/- for the corresponding provision under the Wealth – Tax Act, 1957.” Since it is not in dispute that the aggregate amount of tax interest and penalty involved in the present case is less than Rs.10 ,000/- as per the above circular and the relevant para as noted above, the initiation of prosecution against the petitioners is liable to be quashed.” 4. The only difference in the case at hand to what the Co-ordinate Bench has held would be, qua the amount that is involved in the transaction. In the case before the Co-ordinate Bench it was Rs.1,800/-. That would vary in the case. The amount involved in this case is Rs.2,000/-. Except this difference, the judgment - 6 - NC: 2023:KHC-D:9584 CRL.P No. 101825 of 2023 rendered by the Co-ordinate Bench would become applicable, on all its fours to the issue in the lis. 5. For the aforesaid reasons, the following ORDER i. The petition is allowed. ii. The proceedings in C.C. No.685/2015 pending before the learned Principal Judicial Magistrate First Class, Gokak, stands quashed qua the petitioner. Sd/- JUDGE kmv ct:bck "