Forzza Projects Private Limited Vs PCIT (Kerala High Court)
The Kerala High Court allowed the two Criminal Miscellaneous Cases and quashed the complaints and further proceedings alleging an offence under Section 276C(2) of the Income Tax Act. The complaints arose from the petitioner’s failure to remit self-assessment tax at the time of filing the return. The tax was subsequently paid with interest by availing the installment facility. A penalty imposed in connection with the matter was also under challenge before the appellate authority.
The petitioner sought quashing of the prosecution on the ground that a mere failure to pay self-assessment tax within time did not constitute an offence under Section 276C(2). It was contended that the case did not fall within clauses (i) to (iv) of the Explanation to Section 276C and therefore criminal liability could not be imposed merely because payment was delayed.
The Income Tax Department opposed the petition. It contended that a taxpayer was required to remit tax based on the self-assessment return and that non-payment amounted to an attempt to “evade the payment of tax” under Section 276C(2). The Department also relied upon the distinction between the expressions “evade any tax” in Section 276C(1) and “evade the payment of any tax” in Section 276C(2), contending that the Explanation to Section 276C applied only to sub-section (1). Reliance was placed on G.Viswanathan v. Income Tax Officer, A-Ward, Parameswar Nagar (1987 Vol. 167 ITR 103).
