M/S UPKAR and UPKAR (INDIA), V. THE INCOME TAX DEPARTMENT,

CRL.P/101395/2016

AI Insights

The case involves multiple criminal petitions filed by M/s. Upkar & Upkar (India) and its partners against the orders issued by the Judicial Magistrate First Class, Belagavi, which took cognizance of offences under Section 276CC of the Income Tax Act, 1961, for failing to file income tax returns on time. The petitions challenged the procedural correctness of the issuance of these orders, claiming that the complainant was incorrectly referred to as the 'State of Karnataka' and that the complaints were not properly categorized as private complaints. The court found procedural errors in the order sheets and directed corrections but did not dismiss the substantive charges against the accused.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 700106 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 08-12-2016
• Assessment Year: misc
• Laws Referred To: Criminal Procedure Code, 1973, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: Y V RAVIRAJ
• Assessee Lawyers: ARAVIND KULKARNI
• Keywords: Cognizance of offence; Criminal Proceedings; Delay in filing; Income Tax Return; Quash order
• Section: 148; 153A; 139; 142; 276CC; 482

Judgement Text

"1 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 08TH DAY OF DECEMBER 2016 BEFORE THE HON’BLE MR. JUSTICE S.N. SATYANARAYANA CRIMINAL PETITION No.101395/2016 C/W CRIMINAL PETITION Nos.101396/2016, 101397/2016, 101398/2016 AND 101399/2016. BETWEEN: 1. M/S. UPKAR & UPKAR (INDIA), OFFICE P B ROAD, YALLAPUR ONI, HUBLLI, DIST: DHARWAD, REPRESENTED BY ITS MANAGING PARTNER, SHRI.FAKHRUDDIN A MAGAR. 2. SHRI.FAKHRUDDIN AKBARALI MAGAR, AGED ABOUT 63 YEARS, MANAGING PARTNER, M/S. UPKAR & UPKAR (INDIA), OFFICE P B ROAD,YALLAPUR ONI, HUBBALLI, DIST: DHARWAD. 3. SHRI.JUZAR ABBAS MAGAR, AGED ABOUT 47 YEARS, M/S. UPKAR & UPKAR (INDIA), OFFICE P B ROAD, YALLAPUR ONI, HUBBALLI, DIST: DHARWAD. 4. SHRI.SHABBIR ABBAS MAGAR, AGED ABOUT 51 YEARS, OCC: PARTNER OF M/S.UPKAR & UPKAR (INDIA), 2 OFFICE P B ROAD, YALLAPUR ONI, COMMON HUBBALLI, DIST: DHARWAD. ... PETITIONERS (BY SRI. ARAVIND D KULKARNI, ADVOCATE) AND THE INCOME TAX DEPARTMENT, REPRESENTED BY ITS DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, PLOT NO.123, SARAF COLONY, KHANAPUR ROAD, SHRADDHA BUILDING, TILAKWADI, BELAGAVI. COMMON ... RESPONDENT (BY SRI. Y. V. RAVIRAJ, ADVOCATE) CRIMINAL PETITION NO.101395/2016 IS FILED UNDER SECTION 482 OF THE CRIMINAL PROCEDURE CODE, 1973, SEEKING TO CALL FOR THE RECORDS AND PROCEEDINGS OF CRIMINAL CASE NO. 310 OF 2016 FROM THE HON'BLE COURT OF JUDICIAL MAGISTRATE FIRST CLASS III COURT, BELAGAVI AND SET ASIDE/QUASH THE ORDER OF PROCESS ISSUED BY THE 3RD JUDICIAL MAGISTRATE FIRST CLASS, BELAGAVI DATED 18.02.2016 PRODUCED AS ANNEXURE-A AND ALL FURTHER PROCEEDINGS PURSUANT TO THE SAME. CRIMINAL PETITION No.101396/2016 IS FILED UNDER SECTION 482 OF THE CR.P.C., SEEKING TO CALL FOR THE RECORDS AND PROCEEDINGS OF CRIMINAL CASE NO.311 OF 2016 FROM THE HON'BLE COURT OF JUDICIAL MAGISTRATE FIRST CLASS III COURT, BELAGAVI AND SET ASIDE THE ORDER OF PROCESS ISSUED BY THE 3RD JUDICIAL MAGISTRATE FIRST CLASS, BELAGAVI DATED 18.02.2016 (IN CRIMINAL CASE NO. 3 311 OF 2016) AND ALL FURTHER PROCEEDINGS PURSUANT TO THE SAME. CRIMINAL PETITION No.101397/2016 IS FILED UNDER SECTION 482 OF CR.P.C., SEEKING TO CALL FOR THE RECORDS AND PROCEEDINGS ON CRIMINAL CASE NO. 312 OF 2016 FROM THE HON'BLE COURT OF JUDICIAL MAGISTRATE FIRST CLASS III COURT, BELAGAVI AND SET ASIDE THE ORDER OF PROCESS ISSUED BY THE 3RD JUDICIAL MAGISTRATE FIRST CLASS, BELAGAVI DATED 18.02.2016 (IN CRIMINAL CASE NO. 312 OF 2016) AND ALL FURTHER PROCEEDINGS PURSUANT TO THE SAME. CRIMINAL PETITION NO.101398/2016 IS FILED UNDER SECTION 482 OF CR.P.C., SEEKING TO CALL FOR THE RECORDS AND PROCEEDINGS OF CRIMINAL CASE NO. 313 OF 2016 FROM THE HON'BLE COURT OF JUDICIAL MAGISTRATE FIRST CLASS III COURT, BELAGAVI AND SET ASIDE THE ORDER OF PROCESS ISSUED BY THE 3RD JUDICIAL MAGISTRATE FIRST CLASS, BELAGAVI DATED 18.02.2016 (IN CRIMINAL CASE NO. 313 OF 2016) AND ALL FURTHER PROCEEDINGS PURSUANT TO THE SAME. CRIMINAL PETITION No.101399/2016 IS FILED UNDER SECTION 482 OF CR.P.C., SEEKING TO CALL FOR THE RECORDS AND PROCEEDINGS OF CRIMINAL CASE NO. 314 OF 2016 FROM THE HON'BLE COURT OF JUDICIAL MAGISTRATE FIRST CLASS III COURT, BELAGAVI AND SET ASIDE THE ORDER OF PROCESS ISSUED BY THE 3RD JUDICIAL MAGISTRATE FIRST CLASS, BELAGAVI DATED 18.02.2016 (IN CRIMINAL CASE NO. 314 OF 2016) AND ALL FURTHER PROCEEDINGS PURSUANT TO THE SAME. THESE PETITIONS COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING: 4 ORDER These petitions are filed by accused Nos.1 to 4 in C.C. Nos.310/2016 to 314/2016 pending on the file of JMFC III Court, Belagavi, seeking quashing of separate orders of even date i.e., 18.02.2016, wherein the Court below has taken cognizance for the offence punishable under Section 276CC of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) against accused Nos.1 to 4 and has ordered registration of criminal cases against them. Admittedly, the accused in C.C. Nos.310 to 314 of 2016 are one and the same. The respondent - Income Tax Department, represented by its Deputy Commissioner of Income Tax, Belagavi, is same in all the petitions. 2. Petitioner No.1 – accused No.1 is a partnership Firm engaged in the business of manufacturing of sweet scented supari and is an assessee under the Act. Petitioner Nos.2 to 4 – accused Nos.2 to 4 are its partners looking after the day-to-day affairs of the Firm. It is stated in the 5 complaint that notice under Section 153A of the Act was issued to the accused calling upon them to file returns of income within 30 days. In response to the same, accused No.1 – Firm has e-filed the returns of income for the Assessment Year 2008-09 on 17.06.2015 and for Assessment Years 2009-10 to 2013-14 on 23.06.2015. Since there was a delay of about 12 months in furnishing the returns of income, show cause notice was issued to the accused on 02.11.2015 and since explanation offered by the authorized representative of the accused was not satisfactory, proceedings in C.C. Nos.310 to 314 of 2016 are initiated by the respondent invoking Section 276CC of the Act, which stipulates penalty in case a person wilfully fails to furnish in due time the return of fringe benefits which he is required to furnish under sub-section (1) of section 115WD or by notice given under sub-section (2) of the said section or section 115WH or the return of income under sub-section (1) of section 139 or by notice given under clause (i) of sub-section (1) of section 142 or section 148 or section 153A of the Act. In the instant case, 6 the accused have committed default inasmuch as they have not filed return of income within the due date as prescribed under Section 153A of the Act and their plea that they could not mobilize funds for payment of tax was not accepted by the complainant as the same was not supported by any material. 3. Though the complaints filed by the respondent are private complaints, while preparing note in separate order sheet maintained in respect of C.C. Nos.310 to 314 of 2016 before the JMFC., III Court, Belagavi, the ‘complainant’ is erroneously referred to as ‘State of Karnataka’. Further, in the first page of the order sheet maintained in the said proceedings, in the column provided to describe the ‘Relief’, it is wrongly stated that the ‘Income Tax Department submitted the charge-sheet against the accused’, which is factually incorrect. The complainant, who is the common respondent in these petitions, is a public servant and he has filed separate private complaints in C.C. Nos.310 to 314 of 2016 under 7 Section 200 of the Criminal Procedure Code, 1973, alleging offence punishable under Section 276CC of the Act in discharge of his official duty. Therefore, in view of the proviso to Section 200 of Cr.P.C., the complainant is not required to give his sworn statement. In that view of the matter, the Court below on receiving the said complaints, could have taken cognizance of the offence alleged against the accused provided there was sufficient material to take cognizance and thereafter, it could have issued summons. However, in the instant case, note made in the respective order sheet in C.C. Nos.310 to 314 of 2016 itself is erroneous. Therefore, allowing further proceedings to go on without rectification of mistakes in the order sheet, would lead to inconsistency between the complaints that are filed and the order sheets that are maintained. The said irregularity is required to be removed. 4. Hence, all these petitions are allowed to the limited purpose that in the remanded matters i.e., C.C. No.310 to 314 of 2016, the Court below shall amend the 8 cause title in the first page of the respective order sheet and show the name of the complainant as ‘Income Tax Department, represented by its Deputy Commissioner of Income Tax, Belagavi’ instead of ‘State of Karnataka’. In addition, in the first page of respective order sheet in C.C. Nos.310 to 314 of 2016, in the column provided for mentioning the relief sought by the complainant, the same is required to be mentioned as a private complaint under Section 200 of the Criminal Procedure Code received from the aforesaid complainant for the offence punishable under Section 276CC of the Income Tax Act, 1961. After rectification of the said mistakes in the order sheets, if the Court on going through the material available on record finds that a prima facie case is made out against accused Nos.1 to 4, without recording the sworn statement of the complainant as envisaged in proviso to Section 200 of the Cr.P.C., may take cognizance of the offence alleged against accused Nos.1 to 4 and then, it is open for the Court below to order issuance of summons to accused Nos.1 to 4, who are petitioners herein. 9 5. The Court below shall ensure that the names of the accused are properly recorded in the respective order sheet maintained in C.C. Nos.310 to 314 of 2016. With such observations, all the petitions are disposed of. Sd/- JUDGE sma "