DCIT Vs Saloni Jewellers Pvt. Ltd. (Add. Chief Metropolitan Magistrate (Mumbai)
The case of ITO vs Saloni Jewellers Pvt. Ltd. revolves around the failure to file income tax returns in due time, an offence under Section 276CC of the Income Tax Act. The directors of the company were sentenced to six months of rigorous imprisonment due to the late filing of their income returns for AY 2014-2015.
Analysis
In this case, the directors of Saloni Jewellers Pvt. Ltd., the accused, claimed that financial difficulties and reduced profits led to the delay in filing their income returns. However, their explanation was not satisfactory to the Commissioner, leading to a complaint filed with the competent magistrate court.
The crux of the case revolved around the company’s audit report, indicating a profit of Rs.10,00,00,000/- and turnover of Rs.1,19,00,00,000/-. The accused did not deny the figures mentioned in the audit report, which was discovered at their business premises. Even though the company had the resources to file their income return, they did not adhere to the stipulated timeline.
The court held that the accused failed to justify their delay in filing the return and classified them as habitual offenders. This led to the court imposing a minimum six-month sentence of rigorous imprisonment under section 276CC of the Income-tax Act.
FULL TEXT OF THE ORDER OF ADDL. CHIEF METROPOLITAN MAGISTRATE, 38th COURT, BALLARD PIER, MUMBAI
The complainant Sudhansu Mohapatra, DCIT 4(3)(2), had filed the complaint against the accused for an offence under section 276CC read with section 278-E of The Income Tax Act,1961 (in short the Act).
2. The facts of the complainant’s case in short is that the accused no.1 is a Pvt. Ltd. Company, accused no.2 and 3 are its directors. Tax audit report and balance sheet of the assesee dt. 29.04.2014 was received by the Assessing Officer showing profits of Rs.10,75,38,482/, profit after tax of Rs.6,83,41,265/ and provision for current tax liability of Rs.3,91,91,750/. The accused was having taxable income for A.Y. 2014-2015, but they did not file return of income though every company is liable to file a return of income for an assessment year by the due date.
3. The accused nos.02 and 03 being directors are responsible for paying tax. Since they have committed default the show cause notice was issued to them on 17.10.2017 to explain as to why the sanction for prosecution should not be given. On 05.12.2017, the director of the company by written submission stated that the profit of company had reduced for A.Y. 2014-2015 and the accused has financial difficulties therefore, the return was not filed. As the accused have failed to file their return within stipulated time, therefore, the present complaint.
4. After appearance of the accused evidence before charge was led. Thereafter, my learned predecessor had framed the charge (Exh.20) against the accused, it was read over and explained to them in vernacular. They pleaded not guilty and claimed to be tried.
5. The points for determination alongwith my findings thereon are as under :
