Case Law Details
Gunwant Singh Saluja Vs State of Jharkhand (Jharkhand High Court)
Jharkhand High Court held that initiation of prosecution proceedings under section 276CC of the Income Tax Act in absence of any demand, as demand adjusted against refund, is bad-in-law and liable to be set aside.
Facts- The complaint case was filed by opposite party no.2 alleging therein that a search u/s. 132 of the Income Tax Act was undertaken in Mongia Group of cases by the Investigating Wing. During the course of search operation, various incriminating documents relating to the petitioner were found and seized. Accordingly, notices u/s. 153A of the Income Tax Act for filing of returns of income for the Assessment Year 2005-06 to 2009-10 and 2010-11 were issued, but there was no compliance.
Thus, AO issued a show-cause notice u/s. 276 of the Income Tax Act for initiation of prosecution proceeding for non-filing of return of income in time. Commissioner of Income Tax, Central Circle, Patna gave his opinion that the petitioner has failed to comply with the notices of AO without assigning any reasons and has also failed to file the return of income and, thus, there was willful omission on the part of the petitioner in filing returns of his income and, as such, accorded sanction u/s. 279 of the Income Tax Act for launching prosecution u/s. 276CC of the Act for not filing returns of income without giving any reasonable cause and noncompliance of the notices of AO. On the basis of the aforesaid allegations, Complaint Case was filed by opposite party no.2 in the Court of the learned Special Judge, Economic Offence, Ranchi.
Conclusion- Held that for the block assessment period, the refund was found to be refundable to the petitioner and refunds were already adjusted against outstanding demand of the petitioner, despite thereof, initiation of proceeding with the prosecution under Section 276CC of the Income Tax Act, when there is no demand, is bad in law.
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