Kewalchand Kothari v. The Deputy Commissioner of Income-tax, Central Circle-1(1), Chennai
[Citation -2020-LL-0306-89]

Citation 2020-LL-0306-89
Appellant Name Kewalchand Kothari
Respondent Name The Deputy Commissioner of Income-tax, Central Circle-1(1), Chennai
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 06/03/2020
Assessment Year 2013-14
Judgment View Judgment
Keyword Tags criminal proceedings • interest chargeable • undisclosed income • books of accounts • abuse of process • return of income • delay in payment • payment of tax • tax liability • evade tax • belated return
Bot Summary: The respondent filed private complaint for the offences under Section 276 of the Income Tax Act, 1961 alleging that the petitioner is an assessee on the file of the Deputy Commissioner of Income Tax, Central Circle, Chennai. A search has been conducted under Section 132 of Income Tax Act on 18.12.2012 and during the search, the petitioner disclosed undisclosed income of Rs.10,00,00,000/- for the assessment year 2013-2014. The learned counsel for the petitioner contended that when the petitioner filed his return of income and paid the entire demand made by the respondent, he is not liable to be punished under Section 276 of Income Tax Act. There is three months delay in payment of income tax and the petitioner filed return of income on 31.01.2014. Thereafter, the petitioner paid tax as demanded by the respondent on 13.03.2018, for which the respondent also issued a letter on 24.03.2018 acknowledging the receipt of tax. The petitioner voluntarily disclosed the undisclosed income to the respondent on the inspection conducted under Section 132 of the Income tax Act, 1961 on 18.12.2012. 31909 of 2019 of the Income Tax Act is not at all attracted as against the petitioner herein, and the entire criminal proceedings pending against the petitioner is nothing but clear abuse of process of law.


CRL.O.P.No.31909 of 2019 IN HIGH COURT OF JUDICATURE AT MADRAS DATED: 06.03.2020 CORAM: HONOURABLE MR.JUSTICE G.K.ILANTHIRAIYAN CRL.O.P.No.31909 of 2019 and Crl.M.P.Nos.17511 & 17522 of 2019 Shri Kewalchand Kothari Petitioner Vs. Deputy Commissioner of Income Tax, Central Circle-1(1), Room No.320, 3rd Floor, Investigation Wing, No.46, M.G.Road, Chennai-34 ... Respondent PRAYER: Criminal Original Petition filed under Section 482 of Cr.P.C. praying to call for entire records in E.O.C.No.575 of 2017, on file of Additional Chief Metropolitan Magisterate (Economic Offences), Egmore, Chennai and quash same. For Petitioner : Mr.A.Selvendran For Respondent : Mrs.Sheela, Standing Counsel for IT cases http://www.judis.nic.in 1/8 CRL.O.P.No.31909 of 2019 ORDER This petition has been filed challenging criminal proceedings in E.O.C.No.575 of 2017 on file of Additional Chief Metropolitan Magistrate(Economic Offences), Egmore, Chennai. 2. respondent filed private complaint for offences under Section 276 (c ) (2) of Income Tax Act, 1961 alleging that petitioner is assessee on file of Deputy Commissioner of Income Tax, Central Circle, Chennai. search has been conducted under Section 132 of Income Tax Act on 18.12.2012 and during search, petitioner disclosed undisclosed income of Rs.10,00,00,000/- for assessment year 2013-2014. Further, it was noticed that accused did not file his return of income for assessment year 2013-2014 as required under Section 139 (1) of Income Act. He ought to have filed return of income on or before 05.08.2013. But he belatedly filed his return of income for assessment year 2013-2014 only on 31.01.2014 admitting his entire income of Rs.10,17,53,890/- Thus, it is act of willful failure on part of petitioner for non payment of huge tax liability, and he committed offence under Section 276(c ) (2) of Income Tax http://www.judis.nic.in 2/8 CRL.O.P.No.31909 of 2019 Act and as such respondent issued show cause notice on 17.07.2017. Even then, accused has not paid huge tax liability at time of filing return of income. Thus, he has committed offence under Section 276 (c ) (2) of Income Tax Act and lodged complaint. 3. learned counsel for petitioner contended that when petitioner filed his return of income and paid entire demand made by respondent, he is not liable to be punished under Section 276 (c ) (2) of Income Tax Act. 4. Heard, Mr.A.Selvendran, learned counsel for petitioner and Mrs.Sheela, Standing Counsel for IT cases, appearing for respondent. 5. On perusal of documents, it is seen that last date for filing returns for financial year 2012-2013 was on or before 05.08.2013. respondent did not hand over book of accounts seized from petitioner ill 05.08.2013. Therefore, there is three months delay in payment of income tax and petitioner filed return of income on 31.01.2014. Thereafter, it was returned on 31.03.2015 directing petitioner to pay sum of http://www.judis.nic.in 3/8 CRL.O.P.No.31909 of 2019 Rs.4,08,04,345/-. Thereafter, petitioner paid tax as demanded by respondent on 13.03.2018, for which respondent also issued letter on 24.03.2018 acknowledging receipt of tax. It is relevant to extract provision under Section 276 (c ) (2) of Income Tax Act, 1995 as follows: If person wilfully attempts in any manner whatsoever to evade payment of any tax, penalty or interest under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable with rigorous imprisonment for term which shall not be less than three months but which may extend to three years and shall, in discretion of court, also be liable to fine. Explanation For purpose of this section, wilful attempt to evade any tax, penalty or interest chargeable or imposable under this Act or payment thereof shall include case where any person- (i) has in his possession or control any books of account or other documents (being books of account or other documents relevant to any proceeding under this Act) containing false entry or statement; or (ii) makes or causes to be made any false entry or statement in such books of accounts or other documents; or (iii)wilfully omits or causes to be omitted any relevant entry or statement in such books of account or other documents; or http://www.judis.nic.in 4/8 CRL.O.P.No.31909 of 2019 (iv) causes any other circumstance to exist which will have effect of enabling such person to evade any tax, penalty or interest chargeable or imposable under this Act or payment thereof 6. From reading of above provision to punish accused, there must be wilful attempt to evade payment of tax, he must be in possession of book with false entries, person should have made false entries in book of accounts and omitting any entry in statement of accounts. petitioner voluntarily disclosed undisclosed income to respondent on inspection conducted under Section 132 of Income tax Act, 1961 on 18.12.2012. Therefore, there is no intention from petitioner for willful evading of payment of tax. Admittedly, respondent on inspection dated 18.12.2012, had seized relevant book of accounts and as such petitioner could not able to file return of income on or before 05.08.2013. Therefore, petitioner had no wilful intention to evade tax as alleged by respondent. 7. That apart, petitioner had paid entire tax amount on 13.03.2018 and respondent had also acknowledged same by acknowledgment dated 24.03.2018. Therefore, offence under Section 276 http://www.judis.nic.in 5/8 CRL.O.P.No.31909 of 2019 (c ) (2) of Income Tax Act is not at all attracted as against petitioner herein, and entire criminal proceedings pending against petitioner is nothing but clear abuse of process of law. As such it cannot be sustained as against petitioner and it is liable to be quashed. 8. In view of above discussion, this criminal original petition is allowed. Accordingly, entire proceedings in E.O.C.No.575 of 2017 on file of Additional Chief Metropolitan Magistrate(Economic Offences), Egmore, Chennai is quashed. Consequently, connected miscellaneous petitions are closed. 06.03.2020 Internet : Yes / No Index : Yes / No Speaking / Non Speaking order lok http://www.judis.nic.in 6/8 CRL.O.P.No.31909 of 2019 To 1. Deputy Commissioner of Income Tax, Central Circle-1(1), Room No.320, 3rd Floor, Investigation Wing, No.46, M.G.Road, Chennai-34 2. Public Prosecutor, High Court, Madras. http://www.judis.nic.in 7/8 CRL.O.P.No.31909 of 2019 G.K.ILANTHIRAIYAN, J. lok CRL.O.P.No.31909 of 2019 06.03.2020 http://www.judis.nic.in 8/8 Kewalchand Kothari v. Deputy Commissioner of Income-tax, Central Circle-1(1), Chennai
Report Error