Prosecution in absence of willful admits to evade any tax, penalty or interest is unsustainable

Suman Paper & Boards Ltd. Vs JCIT (Gujarat High Court)

Gujarat High Court held that as per provisions of section 276-C prosecution can be launched only if there is willful admits to evade any tax, penalty or interest chargeable or imposable under the Income Tax Act. Prosecution in absence of willful admits is unsustainable

Facts- The premises of applicant No.1 – a Public Limited Company and its Directors (other applicants) were raided on 1.12.1995 and a search was carried out by the respondent Income Tax Department u/s. 132 of the Income Tax Act.

Pursuant to Notice u/s. 158BC of the Income Tax Act, the applicant had filed a return for the Block Period 1.4.1985 to 5.1.1996, declaring undisclosed income of Rs.20,31,055/-. AO vide an order dated 31.1.1997, determined the undisclosed income at Rs.62,61,623/-.

The applicant filed an Appeal before Tribunal and the Tribunal granted certain reliefs and whereas few additions have been set aside for re-adjudication. It appears that under the re-adjudication, the undisclosed income was computed as Rs.23,36,144/-.

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