Filing of income tax returns is mandatory for an assessee, and failure to do so will constitute an offence under Section 276 of the Income Tax Act, the Supreme Court held on Thursday.
A Bench gave the ruling, ordering prosecution of Tamil Nadu Chief Minister Jayalalithaa and her close aide N. Sasikalaa for not filing returns. The consequence of non-filing of returns on time has also been stipulated in the IT Act. “The offence under Section 276CC will be attracted on failure to comply with Section 139(1) or to respond to the notice issued under Section 142 or Section 148 within the time limit specified therein,” it said.
Writing the judgment, Justice K.S. Radhakrishnan said the contention of Ms. Jayalalithaa and other appellants that there was no wilful failure on their part to file returns could not be accepted. On facts, an offence under Section 276CC was made out in all these appeals. The rejection of their plea for discharge “calls for no interference from this court.” “We also find no basis in the contention that pendency of appellate proceedings is a relevant factor for not initiating prosecution under Section 276CC.”
Referring to the contention that appellate proceedings were pending, the Bench said: “Section 276CC contemplates that an offence is committed on non-filing of return and it is unrelated to pendency of assessment proceedings. If it was the intention of the legislature to hold up prosecution till assessment proceedings are completed by way of appeal or otherwise, the same would have been provided in Section 276CC itself. Therefore, the contention that no prosecution could be initiated till the culmination of the assessment proceedings, especially in a case in which the appellant had not filed the return as per Section 139(1) or following the notices issued under Section 142 or Section 148, does not arise.”
‘Non-cognisable offence’
Tax consultant and president of All India Tax Advocates Forum M.K. Gandhi said: “Under Section 279(2) of the I-T Act, either before or after the institution of proceedings the Commissioner has the power to compound the offence under Section 276CC. It is a non-cognisable offence.”
Tax expert and Supreme Court advocate Virag Gupta: “Now the final conviction and the outcome of the trial will depend on whether there was any duty evasion or not; whether this failure of non-filing of return was willful; and whether Jayalalithaa was responsible for filing of return or not because a non-active partner/director may get benefit in case the executive director or the active partner may own the responsibility.”
(With additional reporting by Gaurav Vivek Bhatnagar)
