Case Note & Summary
The petitioner, Rajkumar Agarwal, proprietor of Sainath Stone Crusher, filed four criminal petitions under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) / Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) seeking quashing of proceedings in C.C. Nos. 2056/2019, 2334/2019, 2333/2019, and another pending before the II Additional Civil Judge and JMFC, Bidar, for offences under Section 276CC of the Income Tax Act, 1961. The petitioner had filed his income tax returns for the assessment years 2013-14, 2014-15, 2015-16, and 2016-17 belatedly, but before the Income Tax Department issued any notice under Section 148 of the Act. The department, however, initiated prosecution alleging that the petitioner wilfully failed to furnish returns within the prescribed time. The petitioner contended that the delay was not wilful; he had filed returns voluntarily, and the department itself delayed processing. The court examined the essential ingredients of Section 276CC, which requires a 'wilful' failure to furnish the return. It noted that the petitioner had filed returns before any notice was issued, and there was no evidence of deliberate or intentional default. The court held that the prosecution failed to establish mens rea, and the proceedings were an abuse of process. Consequently, the court allowed the petitions and quashed the criminal proceedings in all four cases.
Headnote
A) Criminal Law - Quashing of Proceedings - Section 482 CrPC / Section 528 BNSS - Wilful Default under Section 276CC Income Tax Act, 1961 - The court examined whether criminal proceedings for delay in filing income tax returns could be sustained when the assessee had filed returns before the department issued notice and the department itself delayed processing. Held that the essential ingredient of 'wilful' failure was absent, and the proceedings were an abuse of process of law. (Paras 1-10) B) Income Tax - Offence under Section 276CC - Mens Rea - Section 276CC Income Tax Act, 1961 - The court held that the offence under Section 276CC requires a wilful failure to furnish the return of income. Mere delay in filing, without evidence of deliberate or intentional default, does not constitute the offence. The prosecution must establish mens rea. (Paras 5-8) C) Criminal Procedure - Inherent Powers - Section 482 CrPC / Section 528 BNSS - Abuse of Process - The court reiterated that inherent powers under Section 482 CrPC can be exercised to quash proceedings that are frivolous, vexatious, or an abuse of process of law. Where the complaint does not disclose the essential ingredients of the offence, continuation of proceedings would be unjust. (Paras 9-10)
Issue of Consideration
Whether the criminal proceedings under Section 276CC of the Income Tax Act, 1961 against the petitioner for delay in filing income tax returns are liable to be quashed when the delay was not wilful and the department itself delayed processing of returns.
Final Decision
The court allowed the criminal petitions and quashed the entire proceedings in C.C. Nos. 2056/2019, 2334/2019, 2333/2019, and the connected case pending before the II Additional Civil Judge and JMFC, Bidar, for offence under Section 276CC of the Income Tax Act, 1961.
Law Points
- Section 276CC of Income Tax Act
- 1961 requires wilful failure to furnish return of income
- mens rea is essential
- delay in filing return due to departmental delay or lack of culpable mental state does not attract prosecution
- quashing of criminal proceedings under Section 482 CrPC is warranted when no prima facie case of wilful default exists.
