Bombay High Court
Vilas Babanrao Kalokhe vs Principal Commissioner Of Income Tax ... on 16 October, 2025
Author: S. M. Modak
Bench: S. M. Modak
2025:BHC-AS:45535
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL WRIT PETITION NO. 3840 OF 2025
Vilas Babanrao Kalokhe
Residing at
A-103, B-104 West Wing
1st Floor, Talegaon Dabhade,
Opp. Swaraj Nagari
Pune - 411 050. ...Petitioner
Vs.
1. Principal Commissioner
of Income Tax (Central) Pune
Aayakar Sadan, Bodhi Towers,
Salisbury Park, Gultekdi,
Pune - 411 037.
2. The Asst./Dy. Commissioner
of Income Tax, Central Circle - 2(1),
Pune
Room No. 630, 6th floor,
Aayakar Sadan,
Bodi Towers, Salisbury Park,
Gultekdi, Pune 411 037.
3. Additional Commissioner
of Income Tax, Central
Range - 2, Pune
Aayakar Sadan, Bodhi Towers,
Salisbury Park, Gultekdi,
Pune - 411 037.
4. State of Maharashtra
Through the office of the Public
Digitally
signed by
SEEMA
SEEMA KSHITIJ
KSHITIJ YELKAR
Date:
YELKAR 2025.10.17 Seema 1/17
11:46:25
+0530
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Prosecutor, High Court of
Judicature at Bombay, Fort,
Mumbai 400001.
5. Union of India
Through the Secretary (Revenue)
Department of Revenue,
Ministry of Finance,
Room No. 128-A,
North Block,
New Delhi. ...Respondents
*****
Rohan Deshpande, Vihit Shah Advocate for the Petitioner
a/w Alisha Pinto
Ms. S. E. Phad APP for the Respondent-State
Ashok Kotangle a/w Vishnu Advocate for the Respondent-
Chaudhari, Nikitesh Kotangale, Revenue
Narendra Bhagat, Ms. Neha
Pende
*****
CORAM : S. M. MODAK, J.
RESERVED ON : 05th AUGUST 2025
PRONOUNCED ON : 16th OCTOBER 2025
P. C. :-
1. The only issue arisen in this Petition is whether ingredients of
Section 276 C (2) of Income Tax Act are made out and whether Writ
Jurisdiction under Article 227 of the Constitution can be invoked.
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2. The Complainant Income Tax Department contends that, along
with the Return of Income / at the time of submitting Return of
Income, the assessee / accused / petitioner has not deposited the
amount of Income Tax which is due as per his calculation. They further
contend that, even subsequently, he has not deposited it.
3. That is why, not only there is a default but also there is a willful
default as contemplated as per the provision of 276 C (2) of the said
Act.
4. As against this, it is the contention of the Assessee that there is
no willful default and in fact he has paid the amount of Income Tax
due as per self assessment on 16.01.2023 (though not within initial
period).
5. After initial correspondence, as required as per Income Tax Act
and after getting sanction, complaint is filed in the Court of JMFC,
Pune against the Assessee. It is numbered as Summary Criminal Case
No. 149 497/2024. The learned Magistrate was pleased to issue
process for the offence punishable under Section 276 C (2) of the said
Act. This order is under challenge by way of this Petition.
6. I have heard learned Advocate for the Petitioner and learned
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Advocate Shri Ashok Kotangle for Respondents.
7. The case put up by both the parties from the pleadings in
nutshell is as follows: -
a) The assessee runs the business of stone crushing on
partnership business in the name and style as 'Shree
Ambika Stone Crusher' and also engaged in the business
of manufacturing precast cement pipes in partnership
firm basis in the name and style as "Kalokhe Pipes &
Prodcast Industries".
b) He submitted Income Tax Return for the assessment year
2022-2023 on 5.11.2022. The relevant details are as
follows:-
Total Income IT liability shown
Rs.2,17,10,710/- Rs.94,22,300/-
c) The Income tax liability was required to be paid before
furnishing such return of income as contemplated under
the provisions of Section 140-A of the said Act.
d) It was not cleared on 5.11.2022 but amount of Rs.
95,89,000/- was paid on 16.01.2023.
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e) The return was processed on 15.12.2023 under Section
143(1) of the Income Tax Act and Income tax liability of
Rs.1,05,04,470/- was ascertained.
f) Amount was demanded as per notice under Section 143
(1) of the Income Tax Act (Page 53).
g) Assessing Officer submitted a proposal dated 26.07.2024
for launching of prosecution for an offence punishable
under Section 276-C (2) of the said Act and it was
endorsed by Principal Commissioner of Income Tax
(Central), Pune vide letter dated 29.07.2024.
h) PCIT (Central) Pune vide letter dated 12.08.2024 called
explanation of assessee for not granting sanction to
prosecute for the offence punishable under section 276
(C) of said Act (Page 63).
i) The assessee filed his submission online through e-filing
portal on 16.08.2024 (Page No.65)
j) The assessee has informed about some financial problems
within the organization and expressed difficulty in
paying the tax. (However, it is the department's say that,
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any details are not given / credible documentary evidence
is not submitted).
k) The assessee informed that subsequently he has paid the
amount due towards income tax on 16.01.2023 with
interest and as such, he is not in default with the
respective income tax liability for the assessing year
2022-2023. Hence, he requested for dropping the
process of initiating the prosecution.
l) It is the say of the department that the assessee has given
priorities to discharge his business and other
commitments over and above his obligation of statutory
tax payments and adherence to the law of land.
m) It is the case of the department that when assessee has
derived business income of Rs.1,83,30,612/- out of his
business activities and worked out the tax liability
himself, the assessee has utilised revenue receipts for
payment of purposes other than income tax dues.
n) It is the case of the department that assessee was liable to
pay tax by way of advance tax in 4 installments upto
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15.03.2022 and balance 31.03.2022.
o) The department was not satisfied with the explanation
and Principal Commissioner of Income Tax (Central),
Pune granted sanction under Section 279(1) of Income
Tax Act on 18.09.2024 to prosecute the assessee for
violation of the provisions of Section 140 A punishable
under Section 276 C (2) of Income Tax Act (Page 66).
p) On this background, complaint is filed before JMFC,
Pune. Ld. Magistrate passed following order on
05.12.2024 - (Ref. Memo).
Submissions
8. Learned Advocate for the Petitioner made following
submissions:-
(i) Even if the averments in the complaint are taken as it is,
though there is default in paying self assessment tax
alongwith the return, it cannot be said that there is a
willful attempt to evade tax.
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(ii) Though, the tax is not paid on 05.11.2022, it was paid
subsequently on 16.01.2023. This itself shows that the
assessee is having desire to pay the tax and not evade it.
(iii) What is contemplated for Section 276 C (2) is not
merely an evasion to pay tax but it should be willful i.e.
intentional. In this case it is absent.
(iv) As per the provisions of Income Tax Act, there is
difference between "willful evasion" and "failure" to pay
tax. According to him, there are certain kinds of tax
which if not paid then that itself is sufficient to attract
penal provisions of Income Tax Act. Eg. TDS, whereas in
case of 'willful evasion', there must be averment that the
assessee deliberately and intensionally attempted to
evade the tax and it must be substantiated.
(v) He relied upon the provisions of Unique Trading Co. Vs.
RTO 1
9. As against this learned Advocate Mr. Ashok Katangale made the
following submissions:
1 [2024] 159 taxmann.com 216.
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(i) The asessee has not paid " self assessment tax along with the
return" is itself sufficient to attract the penal provisions of
Section 276 C (2) of the Income Tax Act and nothing
more is required to plead and prove the commission of
offence.
(ii) Averments in the complaint are sufficient to draw
inference about 'willful evasion'.
(iii) He tried to differentiate the facts of Unique Trading Co.
and facts of this petition. In that case managing partner
was aware of the tax, remaining partners were unaware.
This factor was considered while accepting the quashing
prayer. According to him such division of responsibility
is not pleaded in the petition.
(iv) He also placed reliance on the observation by the High
Court of Andhra Pradesh in the case of Kashiram Vs. IT
Officer2. What is due towards the tax is not the property
of assessee but a debt towards the State even as per his
own return.
2 [1977] 107 ITR 825 (AP)
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(v) He relied upon the observations in case of M/s.
Madhumilan Syntex Ltd. & Or Vs. Union of India &
Anr.3
vi) He also relied upon the observations in the case of ITO V.
Sultan Enterprises4.
vii) He brought to my notice the provisions of 278 E 'relating
to presumption as to culpable State'. The burden lies on
assessee to establish that failure was not on account of
willful intension.
viii) He tried to differentiate the provisions of Section 276
(1) and 276 C (2) of the said Act.
ix) And lastly he placed reliance on the observations in the
case of Nayan Jayantilal Balu vs. Union of India & Ors.
(Criminal Writ Petition No. 2698 of 2021 dated
7.12.2021) under Section 401, wherein the Division
Bench declined to interfere in the order granting
sanction.
3 Appeal (crl.) 1377 of 1999 [2007] 160 Taxman 71 (SC).
4 (2003) 127 Taxmann 514
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FINDINGS
10. There is no dispute that the assessee has failed to deposit self
assessment tax before or atleast along with the return, he deposited it
subsequently. The relevant dates are as follows:-
a) Date of submission of return 5.11.2022
b) Date on which self assessment On or before
tax was supposed to be paid
5.11.2022
c) Date on which tax is actually 16.01.2023
deposited
d) Date of proposal to get 26.07.2024
sanction
e) Date of show cause notice 12.08.2024
f) Date of online submission 16.08.2024
g) Date of sanction 18.09.2024
h) Date of impugned order 05.12.2024
11. There is no dispute that assessee was liable to pay tax under
Section 140-A of Income Tax Act and liable to submit return of
income under Section 139 of the Income Tax Act. About the date of
submitting return and date of paying tax, after due date is also not in
dispute. When the Court is dealing with prayer of quashing, Court is
required to ascertain the averments of the complaint , documents
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annexed and to read and consider them as it is. The Court is required
to ascertain with additional materials if any, whether the order of issue
of process and complaint can be maintained or whether its
continuation is abuse of process of Court.
Provisions of Income Tax Act
12. It is true, there are various provisions in Income Tax Act laying
down various obligations on the assessee and also laying down the
consequences for its non-fulfillment. It is true, Income Tax Act is a
piece of legislation which lays down, the provision for penalty as well as
provision for prosecution. It is true, even if the background facts are
similar, the consideration for imposing penalty and consideration for
launching prosecution is different.
13. It is a settled law that law laying down punishment has to
interpreted strictly, mean to say, if particular act / obligation states that
there is a punishment for its non fulfillment is provided then these
provisions need to be interpreted strictly and its adherence should be
insisted when there is a complaint of non-adherence. So, Section 276-
C is titled as 'willful attempt to evade tax etc...' It is true there are two
sub-sections but they operate in different field. Both the sub-sections
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lays down different punishment. What is common is ' willful attempt
by a person'. But still there is a difference. The difference is in some of
the wordings of those sub-sections and this difference also
contemplates different contingencies and lead to different
consequences. So to say as sub-section (1) which is a punishable
contingency 'evasion of tax etc.'. The word 'payment of tax' is not
incorporated. Whereas in sub-Section (2) the word 'payment of tax etc'
is added. So it can be said that sub Section (1) contemplates evasion of
tax including submission of return, whereas as per sub Section (2) only
'non-payment of tax' punishable.
14. In the case before this Court, the return is submitted but what is
the failure is, failure to pay tax on due date i.e. why there is a
prosecution under sub-Section (2) of Section 276-C of the Income Tax
Act, learned Advocate Mr. Ashok Kotangale is right while making that
submission.
Facts
15. On the basis of above discussion, it needs to be seen whether
there is willful evasion to pay the tax. When there are different
provisions in Income Tax Act about filing of prosecution, the
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observations in one judgment may be applicable to another case only
when both these cases deal with similar contingencies. So to say
observations made "in a case of willful attempt to evade payment of
tax" will be relevant while dealing with present controversy. So to say if
there is 'willful evasion of tax' (not simply payment of tax) the
observations may not be fully applicable while dealing with present
case. Similarly, the provisions of 276-B of the said Act stands on
different footing. The title of Section is ' Failure to pay tax to the credit
of Central Government under Chapter XII - D or XVII-B'.
16. As the title of Section 276(C) indicates, the word ' failure' is
absent. There is a difference in between 'failure' and 'evasion'.
Furthermore, the evasion should not only be simple evasion but it
should be willful evasion. Section 276-B will be applicable when the
tax deducted at source is not credited to Government. This is one of
the contingency. 'Failure to credit' itself is sufficient. It need not be
willful. Because once you have deducted a tax from the income of
other person (who is liable), such person is bound to credit it. That
omission itself is an offence without addition of willfulness / intension;
but the legislatures have cautiously used the word ' willful evasion' in
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Section 276-C of the Income Tax Act. It indicates there maybe cases
wherein there is a genuine case for not paying tax on or before the due
date even though return is submitted. In a given case, such failure
cannot be considered as a willful evasion. Such cases will be outside the
clutches of Section 276-C of the Income Tax Act.
17. Learned Single Judge of this Court in Unique Trading was
dealing with a petition challenging the prosecution for an offence
punishable under Section 276-C (2) read with Section 276-B of the
Income Tax Act.
18. Learned Single Judge observed "under these two sections, it is
the act of mere failure to credit the tax, which has already been
collected or deducted that entails punishment. The text of section 276,
on the other hand, professes to punish willful attempt to evade
payment of tax interest or penalty". For want of satisfying the
ingredients of 276-C (2) of Income Tax Act, the prosecution was
quashed.
19. The judgments relied upon by learned Advocate Mr. Kotangale
are not applicable to this case because they do not deal with the
controversy involving the case before me. The judgments cited are not
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applicable to the present case because the underlying facts of the case
and legal scenario are different. The core of the case laws cited revolve
around TDS covered under Section 276-B of the Income Tax Act,
whereas, the case in hand deals with self assessment under Section 276-
C. The key difference in the nature of the offence and the statutory
provisions render the precedents non-binding.
Conclusion
20. From the above discussion, it cannot be inferred that assessee has
committed willful default in paying the tax alongwith the return.
21. The averments in complaint fall short to draw an inference of the
willfulness of the assessee. The assessee has pleaded about financial
difficulties. This can be considered as evasion. The department ought
to have pleaded that these financial difficulties are not real financial
difficulty but just an excuse. The burden of proof can be shifted at a
later stage. The presumption of culpableness comes at a later stage only
when the ingredients are satisfied at the beginning. I am constrained to
take this view by also considering the fact that tax was paid on
16.01.2023. So case is not fit for prosecution. It will be abused of
process of Court if prosecution is continued. So case for quashing is
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made out.
ORDER
(i) Writ Petition is allowed.
(ii) The order of issuance of process dated 05.12.2024
passed by learned JMFC, Court No. 9, Pune in Summary
Criminal Case No. 149497 of 2024 is quashed and set
aside and complaint is also quashed and dismissed.
22. Accordingly, Writ Petition is disposed of.
[S. M. MODAK, J.]
