INCOME TAX ACT, 1961

Section 276C

Prosecution - Offence under section 276C(2) - Willful attempt to evade tax -

Department launched a prosecution against assessee for the offence under section 276C(2). Department conducted investigation and found that assessee had total income on which tax payable was determined, including interest. Assessee filed an appeal before CIT(A) who determined the total income of assessee and tax payable. Thereafter, assessee filed an appeal before Tribunal however, Tribunal dismissed his stay petition and hence, assessee was liable to be punished under section 276C(2) for non-payment of determined tax. Held: Only circumstance relied on by Revenue in support of charge levelled against assessee was that, even though accused filed the returns, yet, it failed to pay the self-assessment tax along with the returns. Conduct of assessee making payments in terms of the returns filed by him, though delayed and made after coercive steps were taken by Department did not lead to the inference that the said payments were made in an attempt to evade tax declared in the returns filed by him. Delayed payments might call for imposition of penalty or interest, but by no stretch of imagination, it could be construed as an attempt to evade tax so as to entail prosecution of the petitioners for the alleged offence under section 276C(2). Thus, prosecution initiated against assessee was illegal and tantamount to abuse of process of Court and was liable to be quashed.

REFERRED : Prem Dass v. ITO (1999) 5 Supreme Court Cases 241 : 1999 TaxPub(DT) 1171 (SC) Sushil Kumar Saboo v. State of Bihar 2011(1) PLJR 785 : 2012 TaxPub(DT) 0358 (Pat-HC)

FAVOUR : In assessee's favour

A.Y. :

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