Case Law Details
Bejan Singh Eye Hospital Pvt. Ltd. Vs Income Tax Department (Madras High Court)
It is not in dispute that the first petitioner is an assessee under Income Tax Act and the petitioners 2 and 3 are its Managing Director and Director respectively. The issue concerns the financial year 2011-2012 to 2014-2015. It is not in dispute that the petitioners had filed their income tax return in time admitting their liability. But then the tax was not remitted in time. There was delay. The question that arises for my consideration is whether this will amount a wilful evasion attracting the aforesaid penal provisions.
The act of filing the returns by itself cannot be construed as an attempt to evade tax, rather the submission of the returns would suggest that petitioner No.1 had voluntarily declared his intention to pay tax. The act of submitting returns is not connected with the evasion of tax. It is only an act which is closely connected with the intended crime, that can be construed as an act in attempt of the intended offence. In the backdrop of this legal principle, the Hon’ble Supreme Court in the case of Prem Dass – vs – Income Tax Officer cited supra, has held that a positive act on the part of the accused is required to be established to bring home the charge against the accused for the offence under Section 276C(2) of the Act.
It is admitted in the counter affidavit itself that the petitioner have since cleared the dues and as on date no tax dues are payable in respect of the aforesaid financial years. Inasmuch as the tax has been subsequently paid, I am of the view that continuance of the impugned prosecution would only amount to an abuse of legal process. Respectfully following the judgment of the Hon’ble Karnataka High Court, the impugned proceedings stand quashed and the criminal original petition is allowed.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
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