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TMI Blog2015 (11) TMI 933X X X X Extracts X X X X X X X X Extracts X X X X ..... tual background is that the petitioner filed E-return for the assessment year 2012-13 of dated 30.09.2012 (Section 139-D makes provision for filing of E-return from the Rules provided by the Board). It is self-declaring return of Income of Rs. 2,10,26,628.00(Section 140-A provides for self-assessment whereunder income tax is payable on the basis of return required to be furnished under Section 115 (wd) or (wh) or 139 or 142 or 148 or 153-A or 158-B, 158-C as the case may be. After taking into account the amount of tax if not already paid under the Act, any tax deducted or collected at source, any relief of tax or deduction of tax claimed under Section 90 or 91 on account of tax paid outside India, any relief of tax claimed under Section 90-A on account of tax paid in any specified territory outside India and any tax claimed to be set off as per Section 115 JA or ID;, the assessee shall be liable to pay such tax together with interest payable under the provisions of the Act, for any delay in furnishing return or any default or delay in payment of advance tax, before furnishing return and the return shall be accompanied by proof of payment of such tax and interest. As per the Explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Section 221(1) of the Act for the failure to pay the demand raised in time. In response to it, the accused-assessee filed a letter dated 21.02.2014 stating that he did contracts of the State Government for which the tax due shown in the assessment and he did not pay self-assessment tax as he did not receive the bills from the State Government and he will pay the tax dues as soon as the amounts received from the Government. 4. Pursuant to which the accused-assessee was summoned under Section 131 of the Act and after his appearance, statement was recorded on 28.02.2014 regarding pending tax dues, that too, he received 14.25crores in the financial year 2011-12 for the work done to the Government and his statement in this regard was he received but undisputedly utilized for business expenditure with intent to pay the tax after receiving the balance dues from the Government. In fact, Section 140(A) of the Act referred supra no way enables to delay or postpone the payment but for to pay whatever payable while furnishing return if not paid before as advance tax. It is therefrom the complaint is maintained with the permission obtained supra for the offence under Section 276(C)(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no loss to the revenue and the ingredients of the offence under Section 276 of the Act not made out any offence and there is no notice of demand as required under Section 156 of the Act issued to him and there is efficacious alternative remedy under Section 226 of the Act by other modes of recovery thereby the prosecution is not sustainable and the proceedings are liable to be quashed. 6. The learned counsel for the quash petitioner/accused drawn attention of the Court to the provisions covered by Sections 156, 226 and 227 of the Act and also relied upon the expression of the Apex Court in K.C. Builders v. Assistant Commissioner of Income 2004(2) SC 731 Tax = Supreme SC 103 of two Judge Bench. 7. Section 221 speaks of penalty payable when tax is in default or deemed to be in default by the assessee, in addition to the amount of arrears and interest however the penalty shall not exceed the amount of tax in arrears and before levying any such penalty, assessee shall be given a reasonable opportunity of being heard to show if the default was for the good and sufficient reasons, in such a case, no penalty shall be levied. Once show cause notice issued even before levy of penalty ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice from the above but also for the reason, no such notice is required for the prosecution but for to the penalty to levy or impose, as the case may be. 9. Coming to Section 226 of the Act, as one of the contentions is that there are other modes for recovery and the prosecution cannot sustain. As per Section 226 read with 222 of the Act, for the assessee in default or deemed to be in default in making payment of tax, the Tax Recovering Officer may draw a statement in prescribed form specifying arrears due and shall proceed to recover by mentioning the modes with reference to the rules laid down in the II schedule either by attachment from the sale of movable and immovable property of the assessee or arrest of assessee and his detention in prison or by appointing a receiver by management of the properties of the asseessee for realization. What section 226 says is whether any such certificate is drawn under Section 222 of the Act supra, the Assessing Officer may recover the tax by any of the modes provided viz. where certificate drawn under Section 222, without prejudice to the other modes of recovery under Section 222, the Recovering Officer may recover any one or other modes i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be omitted any relevant entry or statement in such books of account or other documents; or (iv) causes any other circumstance to exist which will have the effect of enabling such person to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof.] 10. A reading of Section 276(c) (1) and (2) shows its wording which is material to answer the same referred supra is crystal clear that without prejudice to any penalty which is imposable under any of the provisions of this Act for the tax or penalty or interest due under the Act evading that to be chargeable or imposable under the Act and he shall be punishable. 11. The saving provision of without prejudice to any penalty that to be imposable, the prosecution when sustainable, the modes of recovery is to the tax, interest and penalty for the non-payment that is not the only recourse for nothing to say without exhausting, prosecution won't survive. The only point is left to be answered from the contentions raised by the learned counsel for the quash-petitioner/accused is whether there is any willful non-payment on the part of the petitioner/accused. No doubt in his replies particularly one d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars 1983-84, 1986-87 but the Tribunal found additions were on the basis of settlement between the assessees and the Department and represents voluntary offer made by the assessee and by applying principle of law laid down in Sir Shadilal Sugar and General Mills Limited v. the CIT Delhi (1987) 168 ITR 705 the Apex Court held that there was no concealment of income by the assessee and accordingly the penalties were cancelled and allowed the appeals. Thereupon, the appellant-assessee moved an application before the Additional Chief Metropolitan Magistrate, (E.O.II), Egmore, Chennai in M.P.No.614 of 1996 in C.C.No.425 of 1990 for adjourning the proceedings to enable them to move necessary petition and file copy of the order of the Tribunal dated 24.10.1996 which allowed the appeals preferred by the A.1 against levying of penalty and the learned Magistrate permitted to mark the order of the tribunal in evidence at the appropriate stage of trial from no objection of prosecution. Giving effect to the order in ITAT's order in ITA Nos.3129-3132, the penalties levied under Section 271(1)(c) of the Act, were cancelled by the Department. In the meantime the Revenue Department filed applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to be set aside in view of the errors apparent on record? It is ultimately held that the penalty proceedings and prosecution proceedings are clearly independent and that the result of proceedings does not bind and Criminal Court has to independently judge on the evidence placed before it. It further held that it is the settled law that levy of penalties and prosecution under Section 276C are simultaneous and once penalties are cancelled on that ground there is no concealment, the prosecution for concealment is liable to be quashed automatically and thereby held the prosecution will not survive and is liable to be quashed thereby the High Court held committed an error. 14. Here, it is not the case of the accused/petitioner that penalty proceedings are quashed or set aside and thereby automatically the prosecution is liable to be quashed. It is not even his case that even there is any finding by any Tribunal of no willful default on the part of him despite presumption against him with a burden on him under reverse onus clause to say consequently that finding is binding on the criminal Court with the analogy of law laid down in R.K. Builders (supra) para-26 to quash the prosecuti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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