Assessee to prove ‘no willful default’ during Trial. J & K HC Upheld prosecution proceedings initiation u/s 276C/ 277

ssessee to prove 'no willful default’ during Trial. J & K HC Upheld prosecution proceedings initiation u/s 276C/ 277

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Assessee to prove ‘no willful default’ during Trial. J & K HC Upheld prosecution proceedings initiation u/s 276C/ 277

Jammu & Kashmir HC dismisses assessee’s writ, upholds prosecution proceedings  initiation u/s 276-C/277 against assessee-individual (proprietor of a Finance co.) for wilful attempt to conceal the particulars of income with a view to evade tax  for AY 2000-01; Rejects assessee’s stand that mere imposition of penalty under the provisions of the Income tax Act does not mean that the petitioner has committed offence u/s. 276-C /277 and that Department should establish ‘wilful’ conduct to evade taxes; Firstly, HC remarks that  in the fight against tax evasion, monetary penalties are not enough, next cites Sec. 278E which places the burden of proving the absence of mens rea upon the accused; Further notes that AO’s finding u/s. 144 of accused/petitioner having Rs. 20 lakh income for subject AY was confirmed by CIT(A), clarifies that “The ground taken that there was no wilful default on behalf of petitioner in concealing the income is not tenable, because it is factual defence, which is to be proved during course of trial.”; Thus, concludes that complaint lodged by AO u/s. 276-C /277 before the Court of Chief Judicial Magistrate and “process issued thereon against petitioner does not suffer from any infirmity of law.”    :HC
The ruling was delivered  by Justice Sanjay Kumar Gupta
Senior Advocate Sunil Sethi and Advocate Sumit Nayyar argued on behalf of the assessee.
Note:
Sec. 278E relates to presumption as to culpable mental state. It provides that in every prosecution case, the Court shall always presume culpable mental state and it is for the accused to prove the contrary beyond reasonable doubt.

[TS-569-HC-2018(J & K)]


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