TMI Blog2021 (4) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... a prosecution for any offence under the Act, when the said offence requires a 'culpable mental state' on the part of the accused. Section 278 E of the Act is really a Rule of Evidence regarding existence of mens rea by drawing a presumption though rebuttable. That does not mean that the presumption would stand applied even in a case wherein the basic requirements constituting the offence are not disclosed. The presumption can be applied only when the basic ingredient which would constitute any offence under the Act is disclosed. Then only the rule of evidence under Section 278 E of the Act regarding rebuttable presumption as to existence of culpable mental state on the part of accused would come into play. As such there is no scope for applying the rebuttable presumption under Section 278E of the Act in the instant case. What is dealt with in Prakash Nath Khanna's [ 2004 (2) TMI 3 - SUPREME COURT] case is the criminal liability that can be fastened under Section 276CC of the Act when there is wilful failure to furnish return. The expression failure used in Section 276 CC of the Act is with respect to submission of assessment and return and the same cannot be eq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uously absent in sub-section (1) and the Explanation attached thereto and that what is dealt under the Explanation is with regard to evade any tax and not with respect to evade the payment of tax as incorporated in subsection (2) and hence the Explanation attached must be understood only relating to the cases, which would fall under sub-section (1) and not subsection (2) and took support from G.Viswanathan v. Income Tax Officer, A-Ward, Parameswar Nagar (1987 Vol. 167 ITR 103). The relevant portion of the said judgment is extracted below for reference : Sub-sections (1) and (2) of Section 276C deal with two different situations. Sub-section (1) deals with 'evasion of tax, penalty or interest chargeable or imposable under the Act'. Therefore, evidently, what is contemplated is evasion before charging or imposing tax, penalty or interest. That may include wilful suppression in the returns before assessment and completion. But sub-section (2) deals with evading 'the payment of tax, penalty or interest under the Act'. The words 'chargeable' or 'imposable' are not there. What sub-section (2) says is 'without prejudice to any penalty that ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to [two years] and shall, in the discretion of the court, also be liable for fine. Explanation For the purposes of this section, a wilful attempt to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof shall include a case where any person- (i) has in his possession or control any books of account or other documents (being books of account or other documents relevant to any proceeding under this Act) containing a false entry or statement, or (ii) makes or causes to be made any false entry or statement in such books of account or other documents; or (iii) wilfully omits or causes to 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. 4. A mere perusal of the said provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment. We have no hesitation to come to the conclusion that the ingredients of offence under Sections 276C and 277 of the Income Tax Act have not been established by the prosecution beyond reasonable doubt, and therefore, the appellant cannot be convicted of the offence under the said Sections. (emphasis supplied) 6. In view of the legal position settled by the Apex court in Prem Dass's case (supra), it cannot be held that the legal position laid down by this Court in G.Viswanathan's case (supra) is good law. In the instant case, admittedly there is no concealment of any source of income or taxable item, inclusion of a circumstance aimed to evade tax or furnishing of inaccurate particulars regarding any assessment or payment of tax. What is involved is only a failure on the part of the petitioner to pay the tax in time, which was later on paid after availing installment facility with interest. The penalty imposed is now pending consideration before the appellate authority. So it would not fall under the mischief of Section 276 C of the Income Tax Act. 7. Yet another argument was also advanced based on the deeming provision Section 278 E of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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