Karnataka High Court
Rajkumar Agarwal vs Income Tax Department on 16 January, 2025
Author: S.Vishwajith Shetty
Bench: S.Vishwajith Shetty
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NC: 2025:KHC-K:238
CRL.P No. 201214 of 2023
C/W CRL.P No. 201213 of 2023
CRL.P No. 201215 of 2023
AND 1 OTHER
IN THE HIGH COURT OF KARNATAKA,
R
KALABURAGI BENCH
DATED THIS THE 16TH DAY OF JANUARY, 2025
BEFORE
THE HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY
CRIMINAL PETITION NO. 201214 OF 2023
(482(Cr.PC)/528(BNSS))
C/W
CRIMINAL PETITION NO. 201213 OF 2023
CRIMINAL PETITION NO. 201215 OF 2023
CRIMINAL PETITION NO. 201216 OF 2023
IN CRL.P.NO.201214/2023:
BETWEEN:
RAJKUMAR AGARWAL S/O RAGHULAL AGARWAL,
Digitally signed AGE: 65 YEARS,
by SHILPA R OCC: PROP. SAINATH STONE CRUSHER
TENIHALLI VILLAGE GADGI,
Location: HIGH R/O. H NO 6-3-45, CHANDRA NIVAS,
COURT OF
KARNATAKA JAVAHAR BAZAR BIDAR-585401.
...PETITIONER
(BY SRI KADLOOR SATYANARAYANACHARYA, ADVOCATE)
AND:
INCOME TAX DEPARTMENT,
BY THE INCOME TAX OFFICER WARD-1,
BIDAR-585401.
...RESPONDENT
(BY SRI M. THIRUMALESH, ADVOCATE)
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NC: 2025:KHC-K:238
CRL.P No. 201214 of 2023
C/W CRL.P No. 201213 of 2023
CRL.P No. 201215 of 2023
AND 1 OTHER
THIS CRL.P IS FILED U/S.482 OF CR.P.C. PRAYING TO
QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.2056/2019,
REGISTERED AS AGAINST THE ACCUSED / PETITIONER FOR
THE OFFENCE U/SEC. 276CC OF INCOME TAX ACT, PENDING
ON THE FILE OF THE II ADDITIONAL CIVIL JUDGE AND JMFC
BIDAR.
IN CRL.P.NO.201213/2023:
BETWEEN:
RAJKUMAR AGARWAL S/O RAGHULAL AGARWAL,
AGE: 65 YEARS, OCC:PROP. SAINATH STONE
CRUSHER VILLAGE GADGI,
R/O. H NO 6-3-45 CHANDRA NIVAS,
JAVAHAR BAZAR BIDAR-585401.
...PETITIONER
(BY SRI KADLOOR SATYANARAYANACHARYA, ADVOCATE)
AND:
INCOME TAX DEPARTMENT,
BY THE INCOME TAX OFFICER WARD-1,
BIDAR-585401.
(RPTD. BY ADDL. SPP HC KLB-585103.
...RESPONDENT
(BY SRI M.THIRUMALESH, ADVOCATE)
THIS CRL.P IS FILED U/S.482 OF CR.P.C. PRAYING TO
QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.2334/2019,
REGISTERED AS AGAINST THE ACCUSED / PETITIONER FOR
THE OFFENCE U/SEC. 276CC OF INCOME TAX ACT, PENDING
ON THE FILE OF THE II ADDITIONAL CIVIL JUDGE AND JMFC-II
BIDAR.
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NC: 2025:KHC-K:238
CRL.P No. 201214 of 2023
C/W CRL.P No. 201213 of 2023
CRL.P No. 201215 of 2023
AND 1 OTHER
IN CRL.P.NO.201215/2023:
BETWEEN:
RAJKUMAR AGARWAL S/O RAGHULAL AGARWAL,
AGE: 65 YEARS, OCC: SAINATH STONE CRUSHER
VILLAGE GADGI,
R/O. H NO 6-3-45 CHANDRA NIVAS,
JAVAHAR BAZAR, BIDAR-585401.
...PETITIONER
(BY SRI KADLOOR SATYANARAYANACHARYA, ADVOCATE)
AND:
INCOME TAX DEPARTMENT,
BY THE INCOME TAX OFFICER WARD-1,
BIDAR- 585401.
(RPTD. BY ADDL. SPP HC KLB-585103.)
...RESPONDENT
(BY SRI M. THIRUMALESH, ADVOCATE)
THIS CRL.P IS FILED U/S.482 OF CR.P.C. PRAYING TO
QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.2333/2019,
REGISTERED AS AGAINST THE ACCUSED / PETITIONER FOR
THE OFFENCE U/SEC. 276CC OF INCOME TAX ACT, PENDING
ON THE FILE OF THE II ADDITIONAL CIVIL JUDGE AND JMFC-II
BIDAR.
IN CRL.P.NO.201216/2023:
BETWEEN:
RAJKUMAR AGARWAL S/O RAGHULAL AGARWAL,
AGE: 65 YEARS, OCC: PROP. SAINATH STONE
CRUSHER VILLAGE GADGI,
R/O. H NO 6-3-45 CHANDRA NIVAS,
JAVAHAR BAZAR, BIDAR-585401.
...PETITIONER
(BY SRI KADLOOR SATYANARAYANACHARYA, ADVOCATE)
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NC: 2025:KHC-K:238
CRL.P No. 201214 of 2023
C/W CRL.P No. 201213 of 2023
CRL.P No. 201215 of 2023
AND 1 OTHER
AND:
INCOME TAX DEPARTMENT,
BY THE INCOME TAX OFFICER WARD-1,
BIDAR-585401.
(RPTD. BY ADDL. SPP HC KLB-585103.)
...RESPONDENT
(BY SRI M. THIRUMALESH, ADVOCATE)
THIS CRL.P IS FILED U/S.482 OF CR.P.C. PRAYING TO
QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.2332/2019,
REGISTERED AS AGAINST THE ACCUSED / PETITIONER FOR
THE OFFENCE U/SEC. 276CC OF INCOME TAX ACT, PENDING
ON THE FILE OF THE II ADDITIONAL CIVIL JUDGE AND JMFC-II
BIDAR.
THESE PETITIONS, COMING ON FOR ADMISSIONS, THIS
DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY
ORAL ORDER
(PER: HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY)
1. These petitions under section 482 of Cr.P.C are filed
by the petitioner-assessee assailing the impugned criminal
proceedings pending before the court of II Addl. Civil
Judge & JMFC-II, Bidar in C.C.No.2056/2019,
C.C.No.2334/2019, C.C.No.2333/2019 and
C.C.No.2332/2019 registered against the petitioner for
NC: 2025:KHC-K:238
AND 1 OTHER
offence punishable under section 276CC of Income Tax
Act.
2. Heard the learned counsel for the petitioner and
learned counsel for the respondent-Department.
3. The respondent had filed four separate private
complaints under section 200 of Cr.P.C against the
petitioner herein for offence punishable under section
276CC of Income Tax Act 1961 (herein after referred to as
the 'Act of 1961'), after obtaining necessary sanction
orders from the Competent Authority to prosecute the
petitioner for the aforesaid offence. Allegation against the
petitioner is that, he had willfully failed to submit his
income tax returns in time for the Assessment Years 2012-
13 to 2015-16 and thereby committed the alleged offence.
4. The learned Magistrate, having taken cognizance of
the alleged offence, had issued summons to the petitioner-
accused. Being aggrieved by the same, the petitioner is
before this court.
NC: 2025:KHC-K:238
AND 1 OTHER
5. Learned counsel for the petitioner having reiterated
the grounds urged in the petition submits that, on receipt
of notice under section 139 of the Act of 1961, petitioner
had submitted his income tax returns for the assessment
years 2012-13 to 2015-16. Since there was a delay in
filing the returns, penalty was levied on the assessee
which was paid by him. Therefore there was no occasion
for the respondent-Department to initiate criminal
prosecution as against the petitioner for the alleged
offence. He submits that petitioner was not granted an
opportunity by the competent authority before issuing the
sanction order. Petitioner had not willfully delayed the
filing of the returns and the delay was beyond the control
of the petitioner since his brothers had died during the
relevant period. In support of his arguments, he has
placed reliance on the judgment of this Court in the case
of C.P Yogeshwara Vs the Income Tax Department
(Crl.P.No.1998/2016 disposed of on 04.01.2017).
Accordingly, he prays to allow the petition.
NC: 2025:KHC-K:238
AND 1 OTHER
6. Per contra, learned counsel appearing for the
respondent has opposed the petition. He submits that
undisputedly there was a delay in filing the income tax
returns for the period from 2012-13 to 2015-16. Merely
for the reason that, the petitioner had submitted the
income tax returns, it will not exonerate him from criminal
prosecution. There is a presumption against the petitioner
available under section 278E of the Income Tax act which
is required to be rebutted by the petitioner in accordance
with law before the learned Magistrate. Therefore, there is
no illegality or irregularity in the impugned criminal
proceedings. In support of his arguments, he has placed
reliance on the judgments of the Hon'ble Supreme Court in
the case of Sasi Enterprises vs. Assistant
Commissioner of Income Tax (2014) 361 ITR 163
(SC) and also in the case of V.P.Punj vs. Assistant
Commissioner of Income Tax and Another reported in
(2002) 253 ITR 369 (Delhi).
NC: 2025:KHC-K:238
AND 1 OTHER
7. It is not in dispute that there was a delay on the part
of the petitioner assessee in submitting his income tax
returns for the assessment years 2012-13 to 2015-16. It
is not in dispute since there was a delay in submitting the
income tax returns, penalty was levied on the petitioner
and the said penalty was paid by the petitioner. The
offence under Section 276CC is attracted on failure to
comply with the provisions of Section 139(1) or failure to
respond to the notice issued under Section 142 or Section
148 of the Act, within the time specified therein. Section
276CC takes in sub-section 1 of Section 139, Section
142(1)(i) and Section 148 of the Act. But the proviso to
Section 276 CC takes in only sub-section 1 of Section 139
of the Act and the provisions of Section 142(1)(i) or
Section 148 are conspicuously absent. Consequently, the
benefit of the proviso is available only to voluntary filing of
the return as required under Section 139(1) of the Act. In
other words, the proviso would not apply after detection of
the failure to file the return and after a notice under
NC: 2025:KHC-K:238
AND 1 OTHER
Section 142(1)(i) or Section 148 of the Act, is issued
calling for filing of the return of the income. The proviso,
therefore, envisages the filing of even belated return
before detection of discovery of the failure and issuance of
notice under Section 142 or Section 148 of the Act.
8. The power to levy penalty for delayed filing of the
income tax returns can be traced under Chapter 21 of the
Income Tax Act, while Chapter 22 of the Income Tax act
provides for offences and prosecutions. A reading of the
aforesaid two chapters would make it very clear that delay
in filing of the income tax returns would not only result in
payment of penalty, but it also results in prosecution as
provided under Chapter 22 of the Act. Therefore, merely
for the reason that petitioner has paid the penalty levied
by the Competent Authority for the delay in filing of the
returns, the same does not exonerate the petitioner from
being prosecuted as provided under Chapter 22 of the Act
of 1961.
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NC: 2025:KHC-K:238
AND 1 OTHER
9. Section 276CC reads as follows:
"If a person wilfully fails to furnish in due time [the
return of fringe benefits which he is required to
furnish under sub-section (1) of section 115WD or by
notice given under sub-section (2) of the said section
or section 115WH or) the return of income which he
is required to furnish under sub-section (1) of section
139 or by notice given under [clause (1) of sub-
section (1) of section 142] or section 148 [or section
153A], he shall be punishable,-
(i) in a case where the amount of tax, which would
have been evaded if the failure had not been
discovered*5, exceeds #6[twenty-five] hundred
thousand rupees, with rigorous imprisonment for a
term which shall not be less than six months but
which may extend to seven years and with fine;
(ii) in any other case, with imprisonment for a term
which shall not be less than three months but which
may extend to [two] years and with fine:
Provided that a person shall not be proceeded
against under this section for failure to furnish in due
time the [return of fringe benefits under sub-section
(1) of section 115WD or] return of income under
sub-section (1) of section 139-
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NC: 2025:KHC-K:238
AND 1 OTHER
(i) for any assessment year commencing prior to the
1st day of April, 1975; or
(ii) for any assessment year commencing on or after
the 1st day of April, 1975, if-
(a) the return is furnished by him before the expiry
of the assessment year 88a [or a return is furnished
by him under sub-section (8A) of section 139 within
the time provided in that sub-section]; or
[(b) the tax payable by such person, not being a
company, on the total income determined on regular
assessment, as reduced by the advance tax or self-
assessment tax, if any, paid before the expiry of the
assessment year, and any tax deducted or collected
at source, does not exceed ten thousand rupees.]]
Section 278E of the Act of 1961 reads as follows:
"(1) In any prosecution for any offence under this
Act which requires a culpable mental state on the
part of the accused, the court shall presume the
existence of such mental state but it shall be a
defence for the accused to prove the fact that he
had no such mental state with respect to the act
charged as an offence in that prosecution.
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NC: 2025:KHC-K:238
AND 1 OTHER
Explanation - In this sub-section, "culpable mental
state" includes intention, motive or knowledge of a
fact or belief in, or reason to believe, a fact.
(2) For the purposes of this section, a fact is said to
be proved only when the court believes it to exist
beyond reasonable doubt and not merely when its
existence is established by a preponderance of
probability."
10. From a reading of Section 278E of the Act, it is
apparent that there is a presumption available as against
the accused and the Court before which proceedings are
initiated for offence punishable under section 276CC is
required to raise a presumption against the accused and it
is for the accused assessee to successfully rebut the said
presumption by producing necessary material before the
said court, failing which he shall be liable to be punished.
11. It is not in dispute that there was a delay in
submitting the Income Tax Returns by the petitioner-
assessee and it is also not in dispute that the delayed
returns filed on behalf of the petitioner-assessee was
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NC: 2025:KHC-K:238
AND 1 OTHER
accepted by the Department on payment of penalty
imposed on the petitioner. The question before the Trial
Court is whether there was a willful and deliberate delay
on the part of the petitioner-assessee in submitting the
Income Tax Returns and in view of the said presumption
under Section 278E, it is for the accused to prove before
the Trial Court that he had no such mental state and rebut
the presumption. In the statement of objection filed on
behalf of the respondent, it has been specifically stated
that the sanctioning Authority namely Principal
Commissioner of Income Tax before according sanction as
provided under Section 279(1) of the Act of 1961 had
issued Show Cause Notice to the petitioner-assessee
granting an opportunity to file his objection and there after
objections filed by the petitioner were considered and
disposed of by a Speaking Order. Therefore, there is no
merit in the contentions urged on behalf of the petitioner
that he was not heard by the Competent Authority before
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NC: 2025:KHC-K:238
AND 1 OTHER
issuing the sanction order to prosecute him for alleged
offence.
12. The Hon'ble Supreme Court in the case of Sasi
Enterprises at Para No.30 has observed as follows:
"30. Section 278E deals with the presumption as to
culpable mental state, which was inserted by
the Taxation Laws (Amendment and Miscellaneous
Provisions) Act, 1986. The question is on whom the
burden lies, either on the prosecution or the
assessee, under Section 278E to prove whether the
assessee has or has not committed willful default in
filing the returns. Court in a prosecution of offence,
like Section 276CC has to presume the existence of
mens rea and it is for the accused to prove the
contrary and that too beyond reasonable doubt.
Resultantly, the appellants have to prove the
circumstances which prevented them from filing the
returns as per Section 139(1) or in response to
notices under Sections 142 and 148 of the Act."
13. In the case of V.P Punj, the High Court of Delhi has
observed that in view of Section 278E of the Income Tax
Act, in any prosecution for offence under the act, the court
has to presume the existence of mens rea and it is for the
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AND 1 OTHER
accused to prove the contrary and that too beyond
reasonable doubt. Prosecution for offence punishable
under section 276CC of the Act of 1961 can be initiated
against an accused for willful and deliberate delay in filing
the returns and since there is a presumption available
under section 278E of the act with regard to the culpable
mental status of the accused, it is for the accused to rebut
the said presumption in accordance with law.
14. Under the circumstances, the explanation sought to
be offered on behalf of the petitioner before this Court
cannot be accepted and it is for the petitioner to lead
evidence and produce necessary material before the
learned Magistrate in support of his defence and rebutt the
presumption available against him under Section 278E of
the Act. In the case of C.P Yogeshwara, the Co-ordinate
bench of this Court had quashed the proceedings initiated
against the assessee for offence punishable under Section
276CC of Act of 1961, for the reason that the assessee
had filed his returns as on the date of order of sanction by
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NC: 2025:KHC-K:238
AND 1 OTHER
the Competent Authority which had gone unnoticed.
Therefore the Department had erred in initiating
proceedings. In the said case, this Court has not taken
notice of the presumption that was available under section
278E of the Act and therefore the order passed in
Crl.P.No.1998/2016 cannot be of any assistance to the
petitioners, more so in view of the judgment of the Hon'ble
Supreme Court in the case of Sasi Enterprises.
15. Under the circumstances, I am of the opinion that
the petitions lack merit and they are liable to be dismissed
with liberty to the petitioner to raise all such grounds
before the learned Magistrate in support of his defence.
Accordingly, the following order:
ORDER
The criminal petitions are dismissed.
Sd/-
(S.VISHWAJITH SHETTY)
JUDGE
DHA
