- Bookmark
- Share
- CaseIQ
Union Of India v. Bhavecha Machinery And Others
Factual and Procedural Background
The appellant filed a private complaint on August 6, 1986, under section 276CC read with section 278B of the Income-tax Act, 1961, alleging that the respondent firm, M/s. Bhavecha Machinery and Electrical Store, delayed filing its income-tax return by 25 months beyond the statutory deadline of June 30, 1981. The firm filed its return on August 30, 1983, and penalty proceedings were initiated under section 271A. Notices issued to the respondents were not complied with, leading to prosecution. After framing of charges and recording evidence, the respondents were acquitted by the court below. The appellant has filed the present appeal challenging that acquittal.
Legal Issues Presented
- Whether the delay in filing the income-tax return by the respondents was wilful and intentional so as to attract punishment under section 276CC read with section 278B of the Income-tax Act, 1961.
- Whether the acquittal by the learned court below was justified on the grounds of sickness of the munim (accountant) and whether such explanation absolves the respondents of criminal liability.
- The scope of appellate review in cases of acquittal under the Income-tax Act, particularly the standard for interference with the trial court’s evaluation of evidence.
Arguments of the Parties
Appellant's Arguments
- The learned court below erred in accepting the plea of sickness of the munim as a valid excuse for the delay in filing the return.
- Non-availability of an employee cannot relieve the assessee of the statutory obligation to file the return on time.
- The offence committed by the respondents was established by the evidence presented by the appellant.
- The appeal should be allowed, the judgment of acquittal set aside, and the respondents convicted.
Respondents' Arguments
- The learned court below properly appreciated the evidence and found the explanation for delay satisfactory.
- The acquittal order is discretionary and should not be disturbed on appeal.
- The appeal should be dismissed.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Prem Dass v. Income Tax Officer, [1999] 236 ITR 683 (SC) | The court of appeal must examine the reasons for acquittal and interfere only if the view taken by the acquitting court is clearly unreasonable. | The court applied this principle to uphold the acquittal since the trial court’s evaluation of evidence did not suffer from illegality or manifest error. |
| Narayan v. UOI, [1994] 208 ITR 82 (MP) | The offence under section 276CC requires wilful delay in filing the return; mere delay is insufficient. Wilfulness must be proved by clear, cogent, and reliable evidence showing intentional, deliberate, calculated, and conscious conduct. | The court relied on this principle to assess whether the delay was wilful and found the explanation of sickness sufficient to negate wilfulness. |
Court's Reasoning and Analysis
The court examined the evidence, including statements and exhibits filed by both parties. The appellant sought to establish wilful delay in filing the return, but the respondents presented evidence that the delay was due to the sickness of their part-time accountant, Tarachand Jain, who was elderly and suffering from multiple ailments. The learned court below accepted this explanation as sufficient ground for the delay. Applying the principles from the cited precedents, particularly the requirement that delay must be wilful and intentional, the court found no illegality or manifest error in the trial court’s acquittal. The appellate court emphasized that it should not disturb an acquittal unless the view taken by the acquitting court is clearly unreasonable, which was not the case here. Thus, the appeal lacked merit and was dismissed.
Holding and Implications
DISMISSED
The appeal challenging the acquittal of the respondents was dismissed. The court upheld the trial court’s finding that the delay in filing the income-tax return was not wilful but excused by the sickness of the accountant. The decision directly affects the parties by confirming the respondents’ acquittal. No new precedent was established by this ruling.
N.K Mody, J.:— Being aggrieved by the judgment dated June 1, 1993, passed by A.C.J.M (Economic Offences), Indore, in Cr. Case No. 38 of 1986, the present appeal has been filed.
2. The short facts of the case are that a private complaint was filed by the appellant under section 276CC read with section 278B of the Income-tax Act, 1961, on August 6, 1986, alleging that a complaint was filed by the Income-tax Officer, B-Ward, Itarsi.
3. In the complaint it was alleged that respondent No. 1 firm M/s. Bhavecha Machinery and Electrical Store is the registered firm and is carrying on business of machinery, spare parts and electrical goods having its business premises at Main Market of Itarsi. The further case of the prosecution was that respondent No. 1 firm filed its return of income-tax on August 30, 1983, while as per section 131 of the Income-tax Act it was obligatory on the part of the firm to have filed its return of income on or before June 30, 1981. It was alleged that thus the returns filed by the respondents is delayed by 25 months. It was alleged that the assessment order was passed on October 13, 1983, under section 143 and penalty proceedings have been initiated under section 271A of the Act. It was also alleged that notice was issued on July 2, 1985, and served on July 17, 1985, but the notice was not complied with by the respondents. It was alleged that since there was default on the part of the respondents, therefore, the respondents are liable to be punished under section 276CC read with section 278B of the Income-tax Act. It was prayed that after enquiry and giving opportunity of hearing the respondents be punished. After framing of charge and recording of evidence the respondents were acquitted against which the present appeal has been filed.
4. Learned counsel for the appellant argued at length and submits that the learned court below committed an error in accepting the plea that because of sickness of the munim of the firm there was no deliberate delay in filing the return and was acceptable. Learned counsel for the appellant further submits that non availability of employee cannot relieve the assessee of his obligation to file the return. It is submitted that from the evidence adduced by the appellant the offence committed by the respondents has been proved. Learned counsel submits that in the facts and circumstances of the case, the appeal be allowed and the judgment passed by the court below be set aside and the respondents be convicted.
5. Shri H.O Soni, learned counsel for the respondents, submits that after due appreciation of evidence the learned court below has found that the explanation of delay in filing the return was satisfactory, therefore, no interference can be made by this court. It is also submitted that the impugned order passed by the court below is discretionary, therefore, in appeal that cannot be disturbed. It is prayed that the appeal be dismissed.
6. From a perusal of the record, it is evident that to prove the case the appellant has filed documents exhibits ‘P-1 to P-7 and has examined R.C Sriniwasan PW-1, who was the Income-tax Officer, B-Ward, I tarsi, at the relevant time and PW-2 Shyamlal, the Income-tax Officer, Itarsi, while the respondents have examined Santosh Jain, DW-1.
7. In the matter of Prem Dass v. Income Tax Officer reported in [1999] 236 ITR 683 (SC) : [1999] 1 Crimes 69, the hon'ble Supreme Court has held that it is also well settled that the court of appeal must examine the reasons on which an order of acquittal is based and must reach the conclusion that the view taken by the acquitting judge was clearly unreasonable. It has also been held by this court that if the evaluation of the evidence made by the courts below while recording an order of acquittal does not suffer from any illegality or manifest error and the grounds on which the said order of acquittal is based are not unreasonable, then the High Court should not disturb the said order of acquittal. In the matter of Narayan v. UOI, [1994] 208 ITR 82 (MP) : [1994] JLJ 350, this court has held that both the courts have lost sight of the quintessence of the offence under section 276CC. It lies in the wilfulness of delay in filing return. In other words, it is not merely failure to file the return in time, which constitutes the offence. The failure to file the return in time must be proved by clear, cogent and reliable evidence to be “wilful” and there should be no plausible doubt of its being “wilful”. It must be intentional, deliberate, calculated and conscious with full knowledge of the legal consequences flowing from them.
8. From a perusal of the record it is evident that in the statement of Santosh Jain, it has come that Tarachand Jain, who is the rather of DW-1 was working as part-time accountant in the respondent firm from 1975 to 1986–87. He has further stated that Tarachand Jain was an old man and suffering from a number of diseases. It was further stated that he has been treated at Itarsi, Harda and Calcutta. Keeping in view the statement of Santosh Jain, the learned court below has held that there was sufficient ground for delay in filing the return in time. In the opinion of this court no illegality has been committed by the learned court below in acquitting the respondents, which can be corrected by this court. In view of this the appeal has no force. It is accordingly dismissed.
9. C.C as per rules.
Alert