TMI Blog2004 (2) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income-tax, Circle-I, Shimla, filed a complaint in terms of section 276CC of the Act in the court of the CJM who had issued process of taking cognizance of the offence. In each of the writ applications, challenge was made to the legality of the proceedings pending in the Court of the Chief Judicial Magistrate, Shimla (in short the "CJM"). The factual position is almost undisputed and needs to be noted in brief. The three appellants were partners of a firm carrying on business under the name and style of M/s. Kailash Nath and Associates. Apart from the three appellants, two other persons were partners and one of them Shri Kailash Nath was the managing partner in terms of the partnership deed dated April 1, 1983. For the assessment year 1988-89, return of income was to be filed on or before July 31, 1988, but was in fact filed on March 20, 1991. Assessment under section 143(3) of the Act was completed on August 26,1991. Proceedings for late submission of return were initiated against the appellants under section 271(1)(a) of the Act and penalty was imposed. Proceedings in terms of section 276CC of the Act were also initiated and a complaint was filed before the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unicated by the managing partner of the firm who was responsible for the accounts. They had no guilty mind. 5. Mere delay in filing a return without contumacious conduct and mens rea being established could not make the petitioner liable for prosecution. 6. The petitioner having been subjected to levy of interest under section 139(8) and also to penalty proceedings under section 271(1)(a) of the Act, could not further be prosecuted for the same defaults. Per contra, learned counsel appearing for the respondents submitted that the High Court was justified in its conclusions in dismissing the writ petitions. The decision in Kulu Valley's case [1970] 77 ITR 518 (SC) has no application to the facts of the present case and in fact it was rendered in a different set up. Sub-sections (1) and (4) of section 139 deal with different situations and it cannot be said that a return filed in terms of section 139(4) would mean compliance with the requirements indicated in sub-section (1) of section 139. It is further submitted that section 278E raises a presumption which is a rebutable one and the factual aspects raised by the appellants can be placed for consideration in the proceedings be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of the previous year which expired last before the commencement of the assessment year, or before the 30th day of June of the assessment year, whichever is later; (b) in the case of every other person, before the 30th day of June of the assessment year: Provided that, on an application made in the prescribed manner, the Assessing Officer may, in his discretion, extend the date for furnishing the return, and, notwithstanding that the date is so extended, interest shall be chargeable in accordance with the provisions of sub-section (8). (1A) Notwithstanding anything contained in sub-section (1), no person need furnish under that sub-section a return of his income or the income of any other person in respect of whose total income he is assessable under this Act, if his income or, as the case may be, the income of such other person during the previous year consisted only of income chargeable under the head 'Salaries' or of income chargeable under that head and also income of the nature referred to in anyone or more of clauses (i) to (ix) of sub-section (1) of section 80L and the following conditions are fulfilled, namely:-- (a) where he or such other person was employed duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year relevant to the previous year during which the loss was sustained, a return of loss in the prescribed form and verified in the prescribed manner and containing such other particulars as may be prescribed, and all the provisions of this Act shall apply as if it were a return under sub-section (1). (4)(a) any person who has not furnished a return within the time allowed to him under sub-section (1) or sub-section (2) may, before the assessment is made, furnish the return for any previous year at any time before the end of the period specified in clause (b), and the provisions of sub-section (8) shall apply in every such case; (b) the period referred to in clause (a) shall be (i) where the return relates to a previous year relevant to any assessment year commencing on or before the 1st day of April, 1967, four years from the end of such assessment year; (ii) where the return relates to a previous year relevant to the assessment year commencing on the 1st day of April, 1968, three years from the end of the assessment year; (iii) where the return relates to a previous year relevant to any other assessment year, two years from the end of such assessment year. (4A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey's case [1970] 77 ITR 518 (SC), the majority view was that section 22(3) of the old Act (corresponding to section 139(4) of the Act) is merely a proviso to section 22(1) (section 139(1)), respectively, and if section 22(3) is complied with, section 22(1) must be held to have been complied with and that if compliance has been made with section 22(3), the requirement of section 22(2A) (corresponding to section 139(3) of the Act) would stand satisfied. It was thus held that the ascertained losses could be carried forward to the subsequent years and set off, even though suo motu return is not filed within time prescribed under section 22(1) of the old Act. The decision was rendered in a conceptually different situation and has no relevance so far as the present dispute is concerned. The basic issue in Kulu Valley's case [1970] 77 ITR 518 (SC) was determination of loss on the basis of the return filed under section 22(1) or 22(3) of the old Act. In the Act, section 80 deals specifically with the situation. The original section 80 in the Act reads as under: "Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed and subjected to the abuse of process of law, it is for the Legislature to amend, modify or repeal it, if deemed necessary. The egislative causus omissus cannot be supplied by judicial interpretative process. Two principles of construction-one relating to casus omissus and the other in regard to reading the statute as a whole-appear to be well settled. Under the first principle a casus omissus cannot be supplied by the court except in the case of clear necessity and when reason for it is found in the four comers of the statute itself but at the same time a casus omissus should not be readily inferred and for that purpose all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. This would be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the Legislature. "An intention to produce an unreasonable result", said Danckwerts L.J. in Artemiou v. Procopiou [1966] 1 QB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) of sub-section (1) of section 142" by the Direct Tax Laws (Amendment) Act, 1987, with effect from April 1, 1989, the expression used was "subsection (2) of section 139". At the relevant point of time the Assessing Officer was empowered to issue a notice requiring furnishing of a return within the time indicated therein. That means the infractions which are covered by section 276CC relate to non-furnishing of return within the time in terms of sub-section (1) or indicated in the notice given under sub-section (2) of section 139. There is no condonation of the said infraction, even if a return is filed in terms of sub-section (4). Accepting such a plea would mean that a person who has not filed a return within the due time as prescribed under sub-section (1) or (2) of section 139 would get benefit by filing the return under section 139(4) much later. This cannot certainly be the legislative intent. Another plea which was urged with some amount of vehemence was that the provisions of section 276CC are applicable only when there is discovery of the failure regarding evasion of tax. It was submitted that since the return under sub-section (4) of section 139 was filed before the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt which deals with the prosecution case. Section 278E is relevant for this purpose and the same reads as follows: "278E. Presumption as to culpable mental state.--(1) In any prosecution for any offence under this Act which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution. Explanation.--In this sub-section, 'culpable mental state' includes intention, motive or knowledge of a fact, or belief in, or reason to believe, a fact. (2) For the purposes of this section, a fact is said to be proved only when the court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability." There is a statutory presumption prescribed in section 278E. The court has to presume the existence of culpable mental state, and absence of such mental state can be pleaded by an accused as a defence in respect of the act charged as an offence in the prosecution. Therefore, the factual aspects highlighted by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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