For Establishing Offence Of Filing Delayed ITR, “Mens Rea” Is A Necessary Ingredient: Rajasthan High Court

The Rajasthan High Court has held that for holding an assessee guilty of the offence of filing delayed income tax returns, “mens rea“ is a necessary ingredient.

The bench of Justice Anoop Kumar Dhand has observed that in the absence of mens rea, an accused cannot be held guilty, and his conviction under Section 276 CC of the Income Tax Act cannot be sustained.

The Income Tax Officer, after getting sanction from the Commissioner of Income Tax, submitted a criminal complaint against the respondent-assessee under Section 276 CC of the Income Tax Act. It was alleged that the assessee did not submit his income tax returns under Section 139(1) within the stipulated time on or before 31.07.1978, and the assessee filed his returns on December 31, 1980.

The proceedings under Section 271(1) of the Income Tax Act of 1961 were initiated via notice dated December 31, 1981, but the respondent failed to submit any explanation. Then a reminder was issued, but no reply was submitted. Thereafter, the Income Tax Officer imposed a penalty of Rs. 2200 on the respondent under Section 271(1).

The charges were framed against the respondent under Section 276 CC. The accused denied the charges and claimed a trial. The assessee denied the allegations, but no defence evidence was produced. The assessee was acquitted.

The department contended that the allegation against the assessee was that a delayed income tax return pertaining to the assessment year 1978–79 was submitted by him after a lapse of more than 28 months. It has also been established on the record by way of leading evidence furnished by the Income Tax Department. There was no reason or occasion available with the trial court to acquit the respondent of the charges.

The assessee contended that there was some delay in filing the income tax return, but the delay was neither willful nor any intention, which attracts the principle of 'mens rea'. After appreciating the evidence available on the record, a cogent and reasoned judgement has been passed in favour of the respondent, giving him the benefit of doubt.

In its wisdom, the Tax Law Amendment and Miscellaneous Provisions Act, 1986, added Section 278E to the Act w.e.f. September 10, 1986. It provides that in any prosecution for the offence under this Act that requires a “culpable mental state” on the part of the accused, the Court shall presume the existence of such a mental state. The burden is shifted to the accused to prove that he had no such mental state. As per the explanation, the culpable state would include "intention," "motive,” and "knowledge." It further provides that the absence of such a culpable mental state shall have to be proved by the accused in defense beyond a reasonable doubt.

The court noted that the complainant, in order to bring home the guilt of the accused for the offence punishable under Section 276C, has to prove the mens rea of the accused for non-payment of tax or attempt to evade tax. But in the present case, the accused respondent has explained in detail the reasons for the delay in filing the income tax returns and depositing the entire tax amount with a penalty subsequently.

The Court held that the complainant or appellant has failed to prove that the respondent had mens rea to evade the payment of tax. The Income Tax Department has failed to prove the guilt of the accused respondent beyond all reasonable doubts.

Counsel For Appellant: Siddharth Bapna

Counsel For Respondent: Shiv Pratap Singh Rathore

Case Title: The Income Tax Officer Versus Rajendra Prasad Vaish

Citation: 2024 LiveLaw (Raj) 88

Case No.: S.B. Criminal Appeal No. 543/1991

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