Case Law Details
Vinayagam Sabarisanthanakrishnan Vs ACIT (Madras High Court)
In a recent case, Vinayagam Sabarisanthanakrishnan v. ACIT, heard before the Madras High Court, a petitioner sought to quash proceedings initiated against him under Section 276CC of the Income Tax Act, 1961. The petitioner argued against the wilfulness of his failure to furnish returns for the Assessment Year 2014-2015, while the Income Tax department maintained the deliberate nature of the offense. This case highlights the critical legal considerations surrounding prosecutions under Section 276CC and the significance of establishing wilful non-compliance with tax filing obligations.
The petitioner, Mr. Vinayagam Sabarisanthanakrishnan, faced charges under Section 276CC for failing to file his income tax returns for the Assessment Year 2014-2015 within the stipulated timeline. Despite earning substantial income during that period, he neglected to fulfill his tax obligations, prompting the Income Tax department to issue a show-cause notice in 2017. The petitioner responded, citing reasons for the delay, including health issues. However, the department found his explanations unsatisfactory and proceeded with criminal proceedings.
In defense, the petitioner argued that he had Tax Deducted at Source (TDS) credits amounting to the entirety of his income, thus believing he had fulfilled his tax liability. Additionally, he contested the timing of the notice under Section 148 of the Act, claiming it was issued after a considerable delay. He further pointed out ongoing appellate proceedings challenging the assessment order, suggesting that criminal prosecution was unwarranted.
Contrary to the petitioner’s assertions, the Income Tax department contended that his non-compliance was wilful, emphasizing the distinction between the notice under Section 148, which pertains to assessing escaped income, and the obligation to file returns under Section 139(1) of the Act. They argued that even after the notice, the petitioner failed to declare his full income, and his TDS credits were insufficient to cover his tax liability.
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