Suresh Kumar Agarwal V. Union Of India Through The Principal Commissioner Of Income Tax Central And Ors

Cr.M.P./1553/2016

AI Insights

The case revolves around the prosecution of Suresh Kumar Agarwal under Section 276CC of the Income Tax Act, 1961, for allegedly failing to file his income tax return on time for the assessment year 2013-14. The Income Tax Department initiated criminal proceedings after Agarwal filed his return significantly late, despite receiving multiple notices. The prosecution argued that Agarwal willfully delayed filing to escape tax liabilities. However, Agarwal's defense highlighted that the return was eventually filed with the due tax and interest, and no penalty had been imposed by the tax authorities, which led to the quashing of the proceedings by the High Court.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 758280 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 29-08-2022
• Assessment Year: misc
• Other Referred Cases: Gopal Ji Shaw v. Income Tax Officer, Calcutta & others, Gujrat Travancore Agency v. Commissioner of Income-Tax, Kerala, Income-Tax Officer v. Autofil & others, G.L. Didwania & another v. Income-Tax Officer & another, K.C. Builders & another v. Assistant Commissioner of Income-Tax, Commissioner of Income-Tax, Patiala-II v. Behari Lal Pyare Lal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: AMRITA SINHA
• Assessee Lawyers: D V PATHY
• Keywords: Criminal Proceedings; Income Tax Return; Mens Rea; Willful default; Prosecution quashed
• Section: 153A; 279(1); 276CC

Judgement Text

"1 Cr.M.P. No. 1553 of 2016 IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr.M.P. No. 1553 of 2016 Suresh Kumar Agarwal, Son of Late Ram Rikshpal Agarwal, Resident of Shastri Nagar West, Near Jain Mandir, P.O. & P.S. Dhowatand, District- Dhanbad … Petitioner -Versus- 1. Union of India, through the Principal Commissioner of Income Tax (Central), Central Revenue Building, 3rd Floor, Birchand Patel Marg, P.O. G.P.O., P.S. Kotwali, District- Patna-800 001 2. Commissioner of Income Tax (Central), Central Revenue Building, 3rd Floor, Birchand Patel Marg, P.O. G.P.O., P.S. Kotwali, District- Patna-800 001 3. Deputy Commissioner of Income Tax, Central Circle, Income Tax Building, Luby Circular Road, P.O., P.S. & District- Dhanbad … Opposite Parties ----- CORAM: HON’BLE MR. JUSTICE SANJAY KUMAR DWIVEDI ----- For the Petitioner : Mr. D.V. Pathy, Advocate For the Opposite Parties : Ms. Amrita Sinha, Advocate ----- 09/29.08.2022. Heard Mr. D.V. Pathy, learned counsel for the petitioner and Ms. Amrita Sinha, learned counsel for the opposite parties. 2. This petition has been filed for quashing the entire criminal proceedings including the order taking cognizance dated 18.03.2016 passed by the learned Special Judge, Economic Offence, Dhanbad in connection with Complaint Case being C.O. Case No.01 of 2016, whereby, cognizance has been taken against the petitioner under Section 276CC of the Income Tax Act, 1961, pending in the court of the learned Special Judge, Economic Offence, Dhanbad. 3. The opposite party no.2 has filed the complaint case being C.O. Case No.01 of 2016 before the court of the learned Special Judge, Economic Offence, Dhanbad against the petitioner under Section 276CC of the Income 2 Cr.M.P. No. 1553 of 2016 Tax Act, 1961 pertaining to the Assessment Year 2013-14 alleging therein that a search was conducted in the case of accused on 19.02.2014 and subsequent case and his case was centralized with the Commissioner of Income Tax, Dhanbad vide order dated 27.08.2014. The accused Suresh Kumar Agarwal was an assessee in his individual capacity within the meaning of Income Tax. The income of Suresh Kumar Agarwal was taxable within the meaning of Income Tax Act for the relevant assessment year 2013-14 and as such he had to file his income tax return in due time i.e. within 15 days of receipt of notice under Section 153A dated 04.09.2014 before the Income Tax Department, Central Circle, Dhanbad. The accused was fully aware of the fact that he had to file his Income Tax return in due time. He willfully, deliberately, knowingly and having mens rea in his mind failed, neglected and avoided to file his Income Tax return for the assessment year 2013-14 within 15 days of notice under Section 153A dated 04.09.2014 with intent to escape from tax liabilities which was chargeable and imposable on him. The accused Suresh Kumar Agarwal ultimately filed Income Tax return for the assessment year 2013-14 on 04.02.2016 in ITR-4 showing total income from all sources at Rs.81,63,930/- after lapse of almost 17 months without reasonable cause and excuse. The said assessee did not make any prayer along with the I.T. Return nor filed any petition for condonation of delay showing legal, reasonable and justified reasons as to why the delay of 17 months was caused in filing return for the assessment year 2013-14. The complainant served a notice dated 19.03.2015 fixing compliance on 06.04.2015 as to why prosecution under Section 276 CC of the Income Tax Act should not be launched against the accused. The accused kept mum from the date of the 3 Cr.M.P. No. 1553 of 2016 receipt of notice and no compliance was made. It was further alleged that after examining all the relevant documents, it is crystal clear that the accused deliberately, willingly, intentionally, deliberately and having mens rea in his mind failed, neglected and avoided to file his return on income for the assessment year 2013-14 in due time i.e. within 15 days of receipt of notice under Section 153A dated 04.09.2014. The Principal Commissioner of Income Tax (Central), Patna after considering all the facts and circumstances applied his judicial mind and opined that the accused did not file his return of income in due time i.e. within 15 days of receipt of notice under Section 153A dated 04.09.2014 rather filed his return on 04.02.2016 without reasonable cause and excuse. The letter dated 10.08.2015 for initiation of prosecution under Section 276CC of the Income Tax Act was issued and the accused in response thereto vide letter dated 13.08.2015 requested for 30 days time, which was duly considered and compliance was fixed on 18.09.2015, but neither accused nor his authorized representative appeared. The final show cause was issued on 29.09.2015 and in response thereto, the accused vide letter dated 12.10.2015 requested for 20 days time for preparation of return and filing of explanation and case was adjourned to 27.10.2015. On 27.10.2015, the accused requested for one month more time showing festivals like Diwali and Chhath, but the same was rejected by the Principal Commissioner of Income Tax (Central), Patna. The Principal Commissioner of Income Tax (Central), Patna vide letter dated 02.11.2015 granted sanction under Section 279(1) of the Act for launching prosecution under Section 276CC of the Income Tax Act. 4. Mr. D.V. Pathy, learned counsel for the petitioner submits that the delay in filing the return was not intentional. He further submits that delay 4 Cr.M.P. No. 1553 of 2016 in filing the return was occurred due to death in the family and also not getting photo copies of the papers and documents, which have been seized by the Income Tax Department when the premises of the petitioner was searched. He also submits that the return was filed and tax in accordance therewith has been paid along with interest. The addition made by the respondent Assessing Officer in such assessment was also deleted in full by the first appellate authority, namely, the Commissioner of Income Tax (Appeal) and no tax is due. He further submits that the petitioner has not received any notice in the second appeal. He further submits that while a protective assessment is permissible, a protective recovery is not. No penalty can be imposed in case of a protective assessment. He further elaborates his argument by way of submitting that since no penalty for delay in filing of the return has been imposed by the respondent Assessing Officer, the whole of the tax payable as per return has been paid and nothing is due, the additions made by the respondent Assessing Officer has been deleted in full by the first appellate authority, namely, the Commissioner of Income Tax (Appeal), the continuance of prosecution under Section 276CC of the Income Tax Act would only be vexatious and would serve no useful purpose and, therefore, be an abuse of the process of the Court. He submits that willful default of payment of tax was the subject matter before the Calcutta High Court in the case of Gopal Ji Shaw v. Income Tax Officer, Calcutta & others, reported in [1988] 173 ITR 554 (Cal). 5. Relevant paragraphs of the said judgment are quoted herein below: “The Division Bench of this court held as follows: \"In the facts of this case, it appears to us that interest having been charged by the Income-tax Officer up to the date 5 Cr.M.P. No. 1553 of 2016 of the filing the return, the principles laid down by the Supreme Court in M. Chandra Sekhar [1985] 151 ITR 433 are clearly attracted. The fact that such interest was waived Subsequently by the Commissioner of Income-tax would make no difference in principle inasmuch as it is the primary act of the Income-tax Officer in accepting the return filed and charging interest up to the date of the filing which raises the presumption of extension of time. What was waived by the Commissioner was interest which was already charged by the Income-tax Officer. As held by the Gujarat High Court in Liberal Engineering Works' case [1986] 158 ITR 520, the Income-tax Officer, having levied interest up to the date of the filing of the return, was not justified in further invoking the penalty proceedings. We accept the contention of the assessee that even in the said three assessment years where time was in fact extended by the Income-tax Officer, the charging of interest up to the dates of the filing of the returns after the extended period gives rise to a presumption of further extension of time for filing of the returns,\" It is, therefore, contended that if for the delay in filing the return, no penalty can be imposed as interest was charged, no criminal prosecution can be initiated for such default either. It is contended on behalf of the respondents by Mr. Mihir Bhattacharjee, learned advocate, that since the prosecution has been launched and the learned Metropolitan Magistrate has taken cognizance of the same, this court should not at this stage quash the proceeding. If the Department cannot prove the case, the petitioner will be acquitted. He has Submitted that the facts disclose an offence which should be tried by the learned Metropolitan Magistrate. I am, however, unable to accept the contentions of Mr. Bhattacharjee. A criminal prosecution for an offence under a special statute must not be initiated as a matter of course where the prosecution would involve intricate questions of interpretation of the Income Tax Act. The Department should not rush with the prosecution without any determination by the Income-tax Officer of the liability of the accused-assessee which is sought to be made the basis for prosecution. In this case, though penalty proceeding under Section 271(1)(a) was initiated against the petitioner for delay in filing the return, no order has been passed. In other words, the Income-tax Officer did not find any reason to penalise the petitioner for delay in filing the return. In Dooars Transport's case [1986] 162 ITR 383, this court held that once interest under section 139(8) of the Act has been charged up to the date of filing of the return, it must be presumed that the time to file a return was in fact extended. A proceeding under the Income-tax Act for imposition of penalty is quasi-criminal in nature. If the quasi- criminal proceeding, that is to say, the proceeding for imposition of penalty cannot be sustained when the Income- tax Officer, while making the assessment, charges interest under Section 139(8) of the Act, on a parity of reasoning, no criminal prosecution either can be launched in such a case. In the criminal proceeding, wilful default in filing the return has 6 Cr.M.P. No. 1553 of 2016 to be established. By charging interest under Section 139(8), the Income-tax Officer has impliedly extended the time to file the return and the question, therefore, of wilful default in filing the return of income does not and cannot arise. As a matter of fact, although in this case, penalty proceeding was initiated, it was not proceeded with thereafter, which only goes to show that the Department did not consider it necessary to impose any penalty after realisation of interest under Section 139(8). In a criminal case, it is not for the accused to establish his innocence. The onus is on the prosecution to bring home the guilt of the accused. Mens rea is an essential ingredient of a criminal offence. The fact of extension of time to file the return excludes the element of mens rea inasmuch as it must be presumed that the Income-tax Officer, being satisfied that there was ground for delay in filing the return, had extended the time. The object of launching criminal prosecution for wilful default in complying with the provisions of the Income-tax Act is to prevent evasion of tax. But in each and every case, without looking into the gravity of offence and without considering the attending circumstances, no prosecution should be launched. Unless there is wilful default in filing the return, no prosecution can be launched. From the complaint that has been filed in this case, it appears that no case of wilful default has been made out.” 6. By way of referring this judgment, learned counsel for the petitioner submits that a criminal prosecution for an offence under a special statute must not be initiated as a matter of course where the prosecution would involve intricate questions of interpretation of the Income Tax Act. The object of launching criminal prosecution for willful default in complying with the provisions of the Income Tax Act is to prevent evasion of tax. 7. Learned counsel for the petitioner further submits that willful failure on the part of the defaulter and the nature of penalty was again the subject matter before the Hon'ble Supreme Court in the case of Gujrat Travancore Agency v. Commissioner of Income-Tax, Kerala, reported in [1989] 177 ITR 455. 8. Relevant paragraphs of the said judgment are quoted herein below: “Learned counsel for the assessee has addressed an exhaustive argument before us on the question whether a 7 Cr.M.P. No. 1553 of 2016 penal- ty imposed under s. 271(1)(a) of the Act involves the ele- ment of mens rea and in support of his submission that it does he has placed before us several cases decided by this Court and the High Courts in Order to demonstrate that the proceedings by way of penalty under s. 271(1)(a) of the Act are quasi criminal in nature and that therefore the element of mens rea is a mandatory requirement before a penalty can be imposed under s. 271(1)(a). We are relieved of the necessity of referring to all those decisions. Indeed, many of them were considered by the High Court and are referred to in the judgment under appeal. It is sufficient for us to refer to s. 271(1)(a), which provides that a penalty may be imposed if the Income Tax Officer is satisfied that any person has without reasonable cause failed to furnish the return of total income, and to s. 276C which provides that if a person wilfully fails to furnish in due time the return of income required under s. 139(1), he shall be punishable with rigorous imprisonment for a term which may extend to one year or with fine. It is clear that in the former case what is intended is a civil obligation while in the latter what is imposed is a criminal sentence. There can be no dispute that having regard to the provisions of s. 276C, which speaks of wilful failure on the part of the defaulter and taking into consideration the nature of the penalty, which is punitive, no sentence can be imposed under that provision unless the element of mens rea is established. In most cases of criminal liability, the intention of the Legislature is that the penalty should serve as a deterrent. The creation of an offence by Statute proceeds on the assumption that society suffers injury by and the act or omission of the defaulter and that a deterrent must be imposed to dis- courage the repetition of the offence. In the case of a proceeding under s. 271(1)(a), however, it seems that the intention of the legislature is to emphasise the fact of loss of Revenue and to provide a remedy for such loss, although no doubt an element of coercion is present in the penalty. In this connection the terms in which the penalty falls to be measured is significant. Unless there is something in the language of the statute indicating the need of establish the element of mens tea it is generally sufficient to prove that a default in complying with the statute has occurred. In our opinion, there is nothing in s. 271(1)(a) which requires that mens tea must be proved before penalty can be levied under that provision. We are supported by the statement in Corpus Juris Secundum, volume 85, page 580, paragraph 1023: \"A penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the violation of criminal or penal laws.\" Accordingly, we hold that the element of mens rea was not required to be proved in the proceedings taken by the Income tax Officer under s. 271(1)(a) of the Income-tax Act against the assessee for the assessment years 1965-66 and 1966-67.” 8 Cr.M.P. No. 1553 of 2016 9. By way of referring this judgment, learned counsel for the petitioner submits that the Hon'ble Supreme Court has held that in most cases of criminal liability, the intention of the Legislature is that the penalty should serve as a deterrent. He submits that in the case in hand, no penalty has been imposed under the provisions of the statute. 10. Learned counsel for the petitioner submits that willful failure of payment of tax was also the subject matter before the Andhra Pradesh High Court in the case of Income-Tax Officer v. Autofil & others, reported in [1990] 184 ITR 47 (AP). 11. Relevant paragraph of the said judgment is quoted herein below: “Therefore, wilfulness contemplates some element of evil motive and want to justification. In CIT v. Patram Dass Raja Ram Beri [1981] 132 ITR 671, a Full Bench of the Punjab and Haryana High Court, considering the term \"wilful failure\" occurring in section 276CC of the Income-tax Act, held that \"willfulness certainly brings in the element of guilt\" and thus the requirement of mens rea. Our Supreme Court in Gujarat Travancore Agency v. CIT, has observed that the creation of an offence by statute proceeds on the assumption that society suffers injury by the act or omission of the defaulter and that a deterrent must be imposed to discourage the repetition of the offence. It also observed that. In most cases of criminal liability, the intention of the Legislature is that the penalty should serve as a deterrent.” 12. Learned counsel for the petitioner further submits that when the appellate authority has set aside the further imposition of tax, the criminal prosecution is bad in law. To buttress this argument, he relied upon the judgment passed by the Hon'ble Supreme Court in the case of G.L. Didwania & another v. Income-Tax Officer & another, reported in [1997] 224 ITR 687 (SC). 13. Relevant paragraph of the said judgment is quoted herein below: “In the instant case, the crux of the matter is attracted and whether the prosecution can be sustained in view of the order passed by the Tribunal. As noted above, the assessing 9 Cr.M.P. No. 1553 of 2016 authority held that the appellant-assessee made a false statement in respect of income of Young India and Transport Company and that finding has been set aside by the Income- tax Appellate Tribunal. If that is the position then we are unable to see as to how criminal proceedings can be sustained.” 14. On the same point, learned counsel for the petitioner submits that if further penalty has been struck down, the criminal case cannot survive. He relied upon the judgment passed by the Hon'ble Supreme Court in the case of K.C. Builders & another v. Assistant Commissioner of Income- Tax, reported in [2004] 265 ITR 562 (SC). 15. Relevant paragraphs of the said judgment are quoted herein below: “The above judgment squarely applies to the facts and circumstances of the case on hand. In this case also, similarly, the application was moved by the assessee before the Magistrate to drop the criminal proceedings which were dismissed by the Magistrate and the High Court also on a petition filed under Sections 397 and 401 of the Code of Criminal Procedure, 1973 to revise the order of the Additional Chief Metropolitan Magistrate has also dismissed the same and refused to refer to the order passed by the competent Tribunal. As held by this Court, the High Court is not justified in dismissing the criminal revision vide its judgment ignoring the settled law as laid down by this Court that the finding of the appellate Tribunal was conclusive and the prosecution cannot be sustained since the penalty after having been cancelled by the complainant following the appellate Tribunal's order, no offence survives under the Income Tax Act and thus quashing of prosecution is automatic. In the instant case, the penalties levied under Section 271(1)(c) were cancelled by the respondent by giving effect to the order of the Income Tax Appellate Tribunal in I.T.A. Nos. 3129-3132. It is settled law that levy of penalties and prosecution under Section 276C are simultaneous. Hence, once the penalties are cancelled on the ground that there is no concealment, the quashing of prosecution under Section 276C is automatic. In our opinion, the appellants cannot be made to suffer and face the rigorous of criminal trial when the same cannot be sustained in the eyes of law because the entire prosecution in view of a conclusive finding of the Income Tax Tribunal that there is no concealment of income becomes devoid of jurisdiction and under Section 254 of the Act, a finding of the Appellate Tribunal supersedes the order of the Assessing Officer under Section 143(3) more so when the Assessing Officer cancelled the penalty levied. In our view, once the finding of concealment and subsequent levy of penalties under Section 271(1)(c) of the 10 Cr.M.P. No. 1553 of 2016 Act has been struck down by the Tribunal, the Assessing Officer has no other alternative except to correct his order under Section 154 of the Act as per the directions of the Tribunal. As already noticed, the subject matter of the complaint before this Court is concealment of income arrived at on the basis of the finding of the Assessing Officer. If the Tribunal has set aside the order of concealment and penalties, there is no concealment in the eyes of law and, therefore, the prosecution cannot be proceeded with by the complainant and further proceedings will be illegal and without jurisdiction. The Assistant Commissioner of Income Tax cannot proceed with the prosecution even after the order of concealment has been set aside by the Tribunal. When the Tribunal has set aside the levy of penalty, the criminal proceedings against the appellants cannot survive for further consideration. In our view, the High Court has taken the view that the charges have been framed and the matter is in the stage of further cross- examination and, therefore, the prosecution may proceed with the trial. In our opinion, the view taken by the learned Magistrate and the High Court is fallacious. In our view, if the trial is allowed to proceed further after the order of the Tribunal and the consequent cancellation of penalty, it will be an idle and empty formality to require the appellants to have the order of Tribunal exhibited as a defence document inasmuch as the passing of the order as aforementioned is unsustainable and unquestionable.” 16. By way of referring this judgment, learned counsel for the petitioner submits that once the penalties are cancelled on the ground that there is no concealment, the quashing of prosecution under Section 276CC is automatic and the petitioner cannot be made to suffer and face the rigorous of criminal trial when the same cannot be sustained in the eyes of law because the entire prosecution in view of a conclusive finding of the Income Tax Tribunal that there is no concealment of income becomes devoid of jurisdiction and under Section 254 of the Act, a finding of the appellate authority supersedes the order of the Assessing Officer under Section 143(3) and more so when the Assessing Officer cancelled the penalty levied. 17. Learned counsel for the petitioner further submits that protective measure because of similar penalty was the subject matter before the 11 Cr.M.P. No. 1553 of 2016 Punjab and Haryana High Court in the case of Commissioner of Income- Tax, Patiala-II v. Behari Lal Pyare Lal, reported in [1983] 141 ITR 32 (P&H). 18. Relevant paragraph of the said judgment is quoted herein below: “The penalty was imposed by the IAC as a protective measure because a similar penalty had already been imposed on the two partners for concealment of the said income. The Tribunal found that, under law, a protective order of assessment can be passed but not of penalty. The learned counsel for the Revenue was unable to challenge this view of the Tribunal and frankly conceded that he was not able to cite any provision of law or decided case which warranted a protective order of penalty. That apart, no finding was recorded by the IAC that there was any wilful concealment of the income and in the absence of such a finding, the order of penalty would be unsustainable. The other reason given for deleting the penalty was that the income did not accrue to the present firm. As is apparent from the facts stated above, the amount received by the firm was not credited in its account and instead credited to the accounts of Lachhman Dass and Sat Parkash who were partners in the earlier firm. The assessee-firm, therefore, did not treat the said amount as its own and it being a firm different from the one to whom the refund had been made could not be held guilty of any concealment. The Tribunal, therefore, rightly deleted the penalty and questions Nos. 1 and 3 are accordingly answered against the Revenue and in favour of the assessee.” 19. By way of relying these judgments and by way of referring relevant orders particularly the Commissioner's order, which has been annexed with the supplementary affidavit, learned counsel for the petitioner submits that subsequently further penalty has been set aside by the first appellate authority, there is no reason to allow to continue the criminal proceedings particularly in the facts and circumstances that the entire tax has been paid along with interest. 20. Per contra, Ms. Amrita Sinha, learned counsel for the opposite parties draws attention of the Court to Section 276CC of the Income Tax Act and submits that there is provision of initiating proceedings for non-filing of 12 Cr.M.P. No. 1553 of 2016 return of income tax. She submits that the petitioner willfully failed to file return on time and the authorities have given ample opportunity to the petitioner to file the return and in spite of that, the petitioner failed to file the return and that is why the case has been instituted against him. She further submits that search and seizure operation was conducted on 19.02.2014 and subsequent dates and notice under Section 153A of the Income Tax Act dated 04.09.2014 was issued to the petitioner wherein request was made to file return within 15 days and in spite of that the petitioner failed to comply the said notice. She also submits that vide letter dated 19.03.2015, a show cause notice for initiating proceedings under Section 276CC of the Act for non-filing of the return of income for the assessment year 2013-14 was issued to the petitioner and once again the petitioner has not complied the same. On 21.07.2015, a proposal was forwarded to the Principal Commissioner of Income Tax (Central), Patna for according sanction under Section 279(1) of the Act to prosecute the petitioner for willful attempt to fail to file the return of income even after expiry of due time as fixed by the notice under Section 153A of the Act. She further submits that a letter for initiation of prosecution under Section 276CC of the Act was issued by the office of the Principal Commissioner of Income Tax (Central), Patna dated 10.08.2015 and in response to that, a letter was written on behalf of the petitioner on 13.08.2015 requested to provide 30 days time on the ground that the petitioner is out of station on account of death of his cousin. She submits that this was the first response by the petitioner. She further submits that the request of the petitioner was accepted vide letter dated 11.09.2015 and the date was fixed for next compliance on 18.09.2015, however, the petitioner failed to furnish any 13 Cr.M.P. No. 1553 of 2016 explanation in this regard. She also submits that a final show cause dated 29.09.2015 for initiating prosecution under Section 276CC of the Act was issued to the petitioner by the Principal Commissioner of Income Tax (Central), Patna giving last opportunity to the petitioner to show cause as to why sanction under Section 279(1) for launching prosecution under Section 276CC of the Act be not granted and vide reply dated 12.10.2015, the petitioner requested further period of 20 days for filing of return of income and explanation. On such request, one more opportunity was granted to the petitioner to file the return, however, the petitioner again failed to file the return. She further submits that vide letter dated 24.10.2015, the petitioner again requested for providing further one month time in preparing and filing the returns for the last six years. However, the authority concerned has rejected the request considering that in light of Section 153A of the Act, the assessment is required to be done within two years. She further submits that vide letter dated 02.11.2015, the sanction was accorded by the competent authority. She submits that the petitioner failed to file the return and therefore vide letter dated 02.11.2015, the sanction was accorded for launching prosecution under Section 276CC of the Act against the petitioner. She further submits that on 14.02.2016, the petitioner filed return showing income of Rs.81,63,930/- which includes disclosure of additional income of Rs.80 Lakhs pursuant to search. On 26.02.2016, the petitioner has also disclosed an additional income of Rs.17,50,000/-. Thus, total undisclosed income of the petitioner comes to Rs.97,50,000/-, which has been concealed during the assessment year. She further submits that what is the willful delay in filing the return is the subject matter of trial and all these can be looked into by the learned trial court and this Court cannot interfere 14 Cr.M.P. No. 1553 of 2016 at this stage under Section 482 Cr.P.C. She also took the Court to the request letters annexed with the petition by which the petitioner has requested for extension of time for filing of the return. On these grounds, she submits that there is willful delay and second appeal against the order passed by the first appellate authority has also been filed by the department, which is still pending. She further submits that it is well settled that on protective assessment, the penalty is not prescribed under the statute, which has been considered by the Punjab & Haryana High Court in the case of Commissioner of Income-Tax, Patiala-II v. Behari Lal Pyare Lal (supra) as relied by the learned counsel for the petitioner. 21. By way of reply, Mr. D.V. Pathy, learned counsel for the petitioner submits that it has been admitted that since time for assessment was going to be lapsed as prescribed under the statute, the authority has proceeded to file the case against the petitioner. He further submits that in light of Section 144 of the Act, the authority concerned is competent to proceed even ex-parte for recovery of the income tax, in accordance with law. On these grounds, he submits that to allow the criminal proceedings to continue will amount to abuse of process of law. 22. In view of the above facts and considering the submissions of the learned counsel for the parties, the Court has gone through the materials on the record and also examined the judgments relied by the learned counsel for the petitioner. It is an admitted fact that the petitioner's premises was searched on a particular date subsequent thereto, certain documents have been seized. The petitioner has not filed return on time. The detail of dates and facts have been noted herein above in the arguments of Ms. Amrita Sinha, learned counsel for the opposite parties. 15 Cr.M.P. No. 1553 of 2016 It is also an admitted fact that the petitioner has filed the return along with interest, which has been accepted by the authority concerned. The subsequent protective assessment has been laid upon the petitioner, which was the subject matter before the first appellate authority, which has exonerated entire further assessment of the petitioner vide order dated 03.07.2019, which has been brought on record by way of filing supplementary affidavit. This is a case arising out of the Special Act statute. Admittedly, no penalty proceeding has been initiated against the petitioner. There is provision of initiation of penalty proceeding. However, the Department has not chosen to invoke Section 271(1)(A) under the statute. 23. It has been held by the Calcutta High Court in the case of Gopal Ji Shaw (supra), the Department should not rush with the prosecution without any determination by the Income Tax Officer of the liability of the accused- assessee, which is sought to be made the basis for prosecution and mens rea is one of the essential ingredient of a criminal offence. In the case in hand, the petitioner has already deposited the tax as well as the interest in light of the statute. When the Income Tax Officer has levied interest on filing of the return, it must be presumed that the Income Tax Officer has extended the time for filing the return after satisfying himself that there was ground for delay in filing the return, as has been held by the Calcutta High Court in the case of Gopalji Shaw (supra). 24. When the amount in question along with the interest has already been paid, no sentence can be imposed under that provision unless the element of mens rea is established and the intention of the Legislature is that the penalty should serve as a deterrent. In the Act, it has been 16 Cr.M.P. No. 1553 of 2016 provided how to proceed if a particular assessee is not filing the return on time, which suggests that it is civil obligation. 25. It has been held by the Andhra Pradesh High Court in the case of Income Tax Officer v. Autofil (supra) that the willful failure occurring in Section 276CC of the Income Tax Act held that willfulness certainly brings in the element of guilt and thus the requirement of mens rea will come into force. 26. In the case of Gujrat Travancore Agency (supra), the Hon'ble Supreme Court has observed that the creation of an offence by statute proceeds on the assumption that the society suffers injury by the act of omission of the offence. It has also been observed in most of the cases of criminal liability, the intention of the Legislature is that the penalty should serve as a deterrent. 27. In the case in hand, the first appellate authority has set aside the further assessment and it is an admitted fact as to whether the criminal proceedings can be sustained or not. In the similar circumstance, in the case of G.L. Didwania (supra), the Hon'ble Supreme Court has held that if that is the position then the Court is unable to see as to how criminal proceedings can be sustained. The same view was again taken in the case of K.C. Builders (supra). 28. The argument of Ms. Amrita Sinha, learned counsel for the opposite parties about willful delay in filing the return has been considered by the Calcutta High Court in the case of Gopal Ji Shaw (supra). Identical is the situation here as the authority concerned has accepted the return along with interest filed by the petitioner and subsequently the first appellate authority has set aside the further assessment. 17 Cr.M.P. No. 1553 of 2016 29. As a cumulative effect of the above facts, reasons and analysis, to allow the criminal proceedings to continue will amount to abuse of process of law. Accordingly, the entire criminal proceedings including the order taking cognizance dated 18.03.2016 passed by the learned Special Judge, Economic Offence, Dhanbad in connection with Complaint Case being C.O. Case No.01 of 2016, pending in the court of the learned Special Judge, Economic Offence, Dhanbad is, hereby, quashed. 30. Resultantly, this petition stands allowed and disposed of. 31. Interim order dated 05.12.2016 stands vacated. (Sanjay Kumar Dwivedi, J.) Ajay/ "