Prosecution for non filing of income tax return: Burden of proof is on assessee to establish that non-filing of ITR was not wilful

Raman Krishna Kumar v. DCIT – [2021] 131 taxmann. com 341 (Madras)

Short Overview of the case:

Facts:

1. Assessee filed the petition to quash the prosecution proceedings initiated against him owing to non-filing of return of income (ITR).

2. 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.

3. The 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.

Note: Sec 276CC provides for imprisonment in the case of wilful failure to file to Income Tax Returns.

The Hon Madras HC held as below:

1. 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.

2. 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 HC upheld the initiation of the prosecution.