Burden of proof on assessee to establish that non-filing of ITR was not willful; HC upholds prosecution

Case Details: Raman Krishna Kumar v. DCIT - [2021] 131 taxmann.com 341 (Madras)

Judiciary and Counsel Details

• • C.V. Karthikeyan, J.
  • Naveen Kumar Murthi for the Petitioner. 
  • L. Murali Krishnan for the Respondent.

Facts of the Case

Assessee filed the petition to quash the prosecution proceedings initiated against him owing to non-filing of return of income (ITR).
According to the Assessing Officer (AO), the assessee had not filed the Returns of Income for the Assessment Year 2013-2014 within the stipulated period. Further, no explanation was given with respect to the high valued transactions in the purchase and sale of mutual funds and transactions with credit cards.
Thus, AO held that there was a wilful and deliberate attempt on the part of the assessee to defraud the Income-tax Department by not filing the return of income.
Assessee contended that he had no intention of committing any offence much fewer offences under sections 276CC and 276C[1]. He also stated that he was under the bonafide impression that his erstwhile employer, where he was working, would have filed the Tax Returns in the normal course.

High Court Held

The Madras High Court held that the assessee had laid the blame on his previous employer, stating that it was a bona fide mistake on the part of the former employer, and the assessee could not be held liable to answer to the charge levied by the AO.
It was also stated that even though the Show Cause Notices were received by assessee, he was under the bona fide impression that since tax had been paid, no further action was required to be clarified from his end.
This Court cannot presume that assessee herein is innocent of any of the offences complained. It is for the assessee to establish such innocence. The platform for establishing such innocence is the Court where the trial is to be conducted.
There is a statutory presumption prescribed in Section 278E. The Court has to presume the existence of the culpable mental state, and absence of such mental state can be pleaded by an accused as a defence in respect to the act charged as an offence in the prosecution.
Thus, the burden lies on the assessee to show that he had no wilful intention not to file the return. Any explanation to discharge such burden can be tested only during the course of the trial.