Assessee Couldn’t File Petition Under CrPC Against Initiation of Criminal Prosecution by AO | HC

Case Details: D.M. Kathir Anand v. N.S. Phanidharan, Assistant Commissioner of Income-tax - [2023] 154 taxmann.com 52 (Madras)

Judiciary and Counsel Details

• • B. Raghu Kiran & S.V. Kasi Visweswara Rao, Member
  • P. Wilson, SC for the Petitioner.
  • Ms M. Sheela, Spl. Public Prosecutor for the Respondent.

Facts of the Case

Assessee, an individual, did not file an income tax return along with the audit report within due time as mandated under section 139(1). Later, the assessee furnished return of income belatedly under section 139(4) but failed to pay self-assessment tax along with the return. The tax was paid only after receipt of notice from the Assessing Officer (AO).

AO issued a notice against the assessee for committing offences under sections 276CC and 276C and initiated criminal prosecution proceedings against the assessee for committing offences under said section. Assessee filed an instant petition under section 482 of the Code of Criminal Procedure against the initiation of criminal prosecution against him.

High Court Held

The High Court held that the important issue to be considered was whether there was wilfulness on the part of the assessee in filing the returns with delay. To deal with this issue, one cannot avoid section 278E. This provision brings in a statutory presumption with regard to the existence of a culpable mental state.

Therefore, the issue of whether there was wilfulness in not filing the returns on time and not paying the tax on time is only a matter of fact, which can be ascertained only through the appreciation of evidence.

In the light of this provision, the Court, exercising its jurisdiction under section 482 of the Code, cannot presume innocence or absence of wilfulness on the part of the assessee. On the other hand, what can be presumed is only culpable mental status, and the onus is upon the petitioner to prove the contrary, which can be done only at the time of trial.

Under such circumstances, the Court, exercising its jurisdiction under section 482 of the Code, cannot disregard the statutory presumption. The High Court also cannot go into the facts of the case nor the defence taken by the assessee to discharge the onus since it will be beyond the jurisdiction under section 482 of the Code. This exercise can be carried out only during the trial since determining a culpable state of mind is primarily a determination of fact, which requires an appreciation of evidence.

List of Cases Reviewed

• • Prakash Nath Khanna v. CIT [2004] 135 Taxman 327/266 ITR 1 (SC) (para 13) followed.

List of Cases Referred to

• • Prakash Nath Khanna v. CIT [2004] 135 Taxman 327/266 ITR 1 (SC) (para 13)
  • Raman Krishna Kumar v. Dy. CIT [2021] 131 taxmann.com 341/[2022] 284 Taxman 108/[2021] 439 ITR 521 (Mad.) (para 18)
  • World Bridge Logistics (P.) Ltd. v. Dy. CIT [Crl.O.P.No.11998 of 2018, dated 28-1-2022] (para 18)
  • Guruprasad Angisetty v. Asstt. CIT [Crl. O. P. No.12046 of 2019, dated 30-9-2022] (para 18).