Justice G. Chandrasekharan observed that the concealment and suppression of income by the assessee came to light only after a survey operation was conducted and

[6/27, 10:49] Sekarreporter: The Madras High Court has ruled that an assessee can be prosecuted for willfully and deliberately concealing his income by not filing his income tax return within the stipulated time, even after the return belatedly submitted by the assessee is accepted by the revenue authorities on the basis of which an assessment order is passed.

The Single Bench of Justice G. Chandrasekharan observed that the concealment and suppression of income by the assessee came to light only after a survey operation was conducted and that the assessee had filed his return only after a statutory notice was issued to him under Section 148 of the Income Tax Act, 1961. Therefore, the Court held that the assessee had willfully and deliberately concealed his true income by not filing his income tax return within the stipulated time.

During the survey operations conducted by the revenue authorities, it was found that the assessee/ petitioner Dharampal R. Pandia had not been filing his income tax return, on or before the due date, with respect to several assessment years and that he was not paying the income tax. It was found that the assessee had concealed his income.

A statutory notice was issued to the assessee calling upon him to furnish his income tax return. Thereafter, the assessee furnished his income tax return and admitted additional income in relation to several assessment years. Subsequently, an assessment order was passed by the income tax authorities and a penalty was imposed on the assessee under the Income Tax Act. The revenue authorities filed complaints against the assessee for prosecution of offences under Sections 276 C(1), 276 CC and 277 of the Income Tax Act, 1961 with respect to six assessment years.

Against this, the assessee filed Criminal Petitions before the Madras High Court to quash the proceedings against the assessee, which were pending before the Court of the Additional Chief Metropolitan Magistrate, Economic Offences, Chennai.

Section 276 C of the Income Tax Act provides for punishment if an assessee wilfully attempts to evade any tax, penalty or interest chargeable under the Income Tax Act, or if he wilfully attempts to under report his income. Section 276 CC provides for punishment where an assessee fails to furnish the returns of income.

Under Section 277 of the Income Tax Act, a person shall be punishable for making a false statement in any verification under the Act, or for delivering a false account or statement, which he does not believe to be true or which he knows or believes to be false.

The assessee Dharampal R. Pandia submitted before the High Court that no specific allegation was made in the complaint regarding suppression of income by the assessee. The assessee averred that the income tax return filed by him was accepted by the income tax authorities and an assessment order was subsequently passed. The assessee submitted that 8 years had elapsed since the passing of the assessment order. Thus, the assessee contended that no cause of action for initiating criminal proceedings against the assessee subsisted. The assessee added that there was no allegation made against him that he had made a false statement and that the assessee had paid the amount that was due. Thus, the assessee averred that he could not be prosecuted for the said offences.

The revenue department contended that the assessee had deliberately omitted to file his income tax return and that he had concealed his true and correct income. The revenue department averred that the assessee had denied the income tax authorities the opportunity of assessing his true income. The revenue department added that it was only because of the survey operation that the willful omission of the assessee to file his income tax return came to light. The revenue department contended that there is no limitation for economic offences and since, the said offences committed by the assessee were economic offences, the provisions regarding the limitation period were not applicable.

The Court observed that the concealment of income by the assessee came to light only
[6/27, 10:49] Sekarreporter: 🦜