Assessee Willfully Concealed Income: Madras High Court Refuses To Quash Prosecution

The Madras High Court has dismissed the assessee’s criminal original petition and held that the assessee was found to have suppressed and concealed the income, and the mens rea is categorically proved against the assessee since he failed to disclose a major portion of the income in his return.

The bench of Justice G. K. Ilanthiraiyan has observed that the provision makes it punishable under Section 276CC of the Income Tax Act, 1961, for non-filing of return within the stipulated time and wilfully concealing its true and correct income under Section 276C(1), and the petitioner cannot seek the indulgence of the Court to quash the entire proceedings.

The respondent or department lodged a complaint for the offences under Section 276CC of the Income Tax Act, 1961, for non-filing of the income tax return for the assessment year 2012–2013.

The accused is an assessee on the file of the respondent. During the search on September 3, 2013, it was detected that the accused did not file his return of income for the assessment year 2012–2013. Therefore, he was issued notice under Section 153A of the Income Tax Act to file a return of income tax within 30 days from the date of the said notice. However, the petitioner did not file his return of income within the period of 30 days but filed it belatedly on November 20, 2015, admitting a total income of Rs. 2,29,92,150.

Therefore, the accused was issued a show cause notice to show the reason for not initiating prosecution. On receipt of the same, the accused replied that the delay was due to books of accounts and other materials being seized by the Income Tax Department. It is difficult for the accused to collect details with regard to the 18 assessees in the group. He is an elderly person suffering from hypertension and diabetes. Therefore, he was unable to file his return of income. Without being satisfied with the reply submitted by the accused, the respondent filed a complaint.

The petitioner contended that the allegations made in the complaint neither make out any case against the petitioner nor disclose the ingredients of an offense under Section 276CC of the Income Tax Act against the petitioner. The trial court had taken cognizance without application of mind, and it is against the provisions under Section 153A and 276CC of the Income Tax Act.

The petitioner submitted that the income tax return shall be filed within a period of 30 days from the date of receipt of the notice issued under Section 153A of the Income Tax Act. It was served on the petitioner on May 8, 2014, and as such, the period for non-filing of income tax returns ended on June 7, 2014. Whereas the sanction was granted for the initiation of prosecution only on September 27, 2017. The complaint was lodged in the month of October 2017. Therefore, the complaint was filed after a period of three years from the date of the alleged occurrence, and the complaint itself is barred by limitation.

The court held that there was concealment by the petitioner while filing his first return of income for the assessment year 2012–2013. In fact, the levying of penalties was already dropped in view of the order passed by the tribunal. However, the petitioner is now facing prosecution under Section 276CC of the Income Tax Act.

“This Court is not inclined to quash the impugned proceedings. As such, this criminal original petition is liable to be dismissed,” the court said.

Counsel For Petitioner: R. Sivaraman

Counsel For Respondent: M. Sheela

Case Title: R.P. Darrmalingam Versus Assistant Commissioner of Income Tax

Citation: 2023 LiveLaw (Mad) 357

Case No.: CRL.O.P.No.28572 of 2018

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