Relief granted under Section 276CC of the Income Tax Act for a petitioner eligible for a tax refund.
In a significant ruling, the Bombay High Court has quashed the criminal complaint against Rajesh Somandas Sachdev, a taxpayer, who was prosecuted for failing to file income tax returns on time for the Assessment Year 2014-2015. The complaint was lodged under Section 276CC of the Income Tax Act, 1961, which deals with penalties for non-filing of tax returns.
The petitioner, Rajesh Somandas Sachdev, had been facing a criminal complaint filed by the Income Tax Department after failing to file his income tax return within the stipulated period. However, subsequent to the filing of the complaint, Sachdev filed his returns, which indicated a Tax Deducted at Source (TDS) amount of Rs. 2,54,788 and a refund entitlement of Rs. 1,64,340. The assessment was later confirmed in the assessment order.
The court, presided over by Mr. Madhav J. Jamdar, J., drew upon the proviso to Section 276CC, which exempts prosecution if the tax payable does not exceed Rs. 10,000 after accounting for TDS and advance taxes. The court emphasized that the petitioner was, in fact, entitled to a substantial refund, and there was no loss to the revenue. This legal position was supported by the precedent set in the Supreme Court case of Guru Nanak Enterprises vs. Income-tax Officer and subsequent decisions by the Madras High Court.
The High Court further criticized the Income Tax Department's move to sanction prosecution without considering the significant TDS amount already deducted. The judgment underscored the necessity of exercising the court's inherent jurisdiction under Section 482 of the Criminal Procedure Code to prevent the abuse of the legal process and to secure the ends of justice.
Ultimately, the court deemed the prosecution "wholly unwarranted" and an "abuse of the process of law," granting relief to the petitioner by quashing the complaint. The decision highlights the judiciary's role in protecting citizens from unjust legal proceedings and ensuring that the spirit of the law is upheld.
Bottom line:-
Relief granted against criminal prosecution under Section 276CC of the Income Tax Act, 1961, considering the proviso to Section 276CC and the fact that the petitioner was entitled to a refund, not liable for additional tax.
Statutory provision(s): Articles 226, 227 of the Constitution of India, Sections 276CC, 148 of the Income Tax Act, Section 482 of the CrPC, Section 528 of Bharatiya Nagarik Suraksha Sanhita, 2023.
Rajesh Somandas Sachdev v. Income Tax Officer, (Bombay) : Law Finder Doc id # 2949376
