Prosecution can be launched even if there is a time for filing income tax return u/s 139(4) if return is not filed u/s 139(1) & notice is issued u/s 142(1)


Prosecution can be launched even if there is a time for filing income tax return u/s 139(4) if return is not filed u/s 139(1) & notice is issued u/s 142(1)

DELHI HIGH COURT-Jay Polychem India Ltd. & Anr. v. ACIT- It is an admitted case of the petitioners that the ITR for the assessment year 2012-13 was required to be submitted in terms of section 139(1) of Income Tax Act on or before 30-9-2012. The law would permit such ITR to be submitted in the extended period upto the close of the assessment year, i.e., upto 31-3-2013. The respondent had issued a notice on 2-11-2012, in terms of section 142(1), calling upon the petitioners to furnish the return for assessment year 2012-13 on or before 20-11-2012. Yet, there was no compliance. The respondent levied penalty under section 271(1)(b) of Income Tax Act vide order 22-10-2013 for non-compliance of the notice dated 142(1). The ITR was eventually filed on 19-3-2014.

Be that as it may, the cause of action for filing the complaint in the above nature was pleaded with reference to the breaches committed in compliance with the requirement of law under section 139(1) and in compliance of notice under section 142(1).

The prime contention of the petitioners is with reference to the provision contained in section 139(4) of Income Tax Act. The said clause, as it stood prior to its amendment with effect from 1-4-2014, permitted any person who had not furnished a return under section 139(1), or within the time allowed under section 142(1), to make compliance by furnishing the return for any previous year at any time before the expiry of one year from the end of relevant assessment year or before the completion of assessment whichever is earlier.-                                                                           HELD- Section 276-CC, it may be noted, takes in sub-section (1) of section 139, section 142(1)(i) and section 148. But, the proviso to section 276-CC takes in only sub-section (1) of section 139 of the Act and the provisions of section 142(1)(i) or 148 are conspicuously absent. Consequently, the benefit of the proviso is available only to voluntary filing of return as required under section 139(1) of the Act. In other words, the proviso would not apply after detection of the failure to file the return and after a notice under section 142(1)(i) or 148 of the Act is issued calling for filing of the return of income. The proviso, therefore, envisages the filing of even belated return before the detection or discovery of the failure and issuance of notices under section 142 or section 148 of the Act.”

Similar contentions were raised before this Court in a batch of matters led by Crl.M.C. 3385/2016, Karan Lutra v. Income Tax Officer, decided on 14-9-2018 : 2018 TaxPub(DT) 6394 (Del-HC) and taking note of the decision in Sasi Enterprises (supra), this Court held as under :–

“16. The offence under section 276CC of Income Tax Act deals with failure to comply with the obligation under sections 139(1) or 142(1) or 148 of Income Tax Act. Disobedience of each said provision of law itself constitutes a distinct offence. The offence under section 276CC, prima facie, stood constituted upon failure on the part of the assessee to furnish the return of income for the assessment year in question within the period prescribed in law. The notices by the assessing authority under section 142(1) were issued with the objective of facilitating best judgment assessment. The failure to abide by such notices would also constitute offence, distinct from the offence that had been earlier committed by virtue of breach of section 139(1). The assessment proceedings are not related to these criminal prosecutions. They may eventually have a bearing for the benefit of proviso to section 276CC to be invoked but not so as to inhibit continuation of the criminal process.”

In the present case, there was a breach even in compliance with the notice under section 142(1), which by the same logic as indicated above, constitutes distinct offence.

There is no merit in the contentions raised in the petition. The same is dismissed.