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2022 (11) TMI 736 - HC - Income TaxOffence u/s 276C(2) r/w 278B - Wilful attempt to evade tax, etc - whether requisite mens rea was present to infer a willful attempt at evading tax? - HELD THAT:- Unless a person with dishonest intention tries to conceal facts and consequently attempts at evading the tax, which he is liable to pay are the requisite ingredients to prosecute person u/s 276C of the Income Tax Act. It is not the case of the Income Tax department that the self assessment tax returns which were filed had an element of concealment on any factual aspects and tried to evade tax, which is liable to paid. There is no dispute regarding the claims made by the petitioners in their income tax returns. Having received the notice, the petitioners have paid additional amoun towards interest and other charges, apart from the assessed tax. It was stated that due to financial difficulties beyond control, the amount could not be paid in time. This is not a case wherein false declaration is made or that the department has found that there is a deliberate attempt to evade tax by suppressing material information. Whether there is willful delay or not are discernible from the facts of the case. Conduct of the petitioners itself would indicate that it was a case of delayed payment of tax or deferred payment. The tax along with interest and penalty was accepted by the department without any reservations. Such delay in the payment will not amount to willful attempt to evade tax. Cogent reasons are given stating that tax could not be paid due to financial difficulties. It cannot be inferred from the facts of the present case that any attempt was deliberately made to evade the tax payment. For the said reasons, the continuation of the proceedings against the petitioners would an abuse of process of the Court. It is a fit case wherein this Court has to exercise its inherent powers under Section 482 of Cr.P.C to quash the proceedings against the petitioners. Accordingly the proceedings against the petitioners on the file of Special Judge for Economic Offences, Hyderabad are hereby quashed and the Criminal Petition is allowed.
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