THE INCOME TAX OFFICER vs. RAJENDRA PRASAD VAISH, S/O SHRI BANSHIDHAR VAISH

Facts

The Income Tax Officer (appellant) filed a criminal complaint against Rajendra Prasad Vaish (respondent) under Section 276 CC of the Income Tax Act, 1961. The allegation was that the respondent failed to submit his Income Tax Return for the assessment year 1978-79 within the stipulated time (due by July 31, 1978). The return was eventually filed on December 31, 1980, over 28 months late. Proceedings under Section 271(1) of the Act were initiated, a penalty of Rs. 2200/- was imposed, and the respondent was acquitted by the Special Magistrate (Economic Offences) on August 31, 1991. The Income Tax Department appealed this acquittal.

Held

The High Court dismissed the appeal, upholding the acquittal of the respondent. The Court noted that for a conviction under Section 276 CC, the prosecution must prove a wilful attempt to evade tax, penalty, or interest, which requires 'mens rea' as a necessary ingredient. The respondent had explained the delay in filing the returns and deposited the entire tax amount with penalty. The Court found that the complainant/appellant failed to prove that the respondent had the 'mens rea' to evade tax payment beyond reasonable doubt. The Court also observed that no notice was given to the respondent prior to the filing of the complaint. Applying the principle that in an appeal against acquittal, if two views are plausible, the one favouring the accused's innocence should be taken, the Court found no perversity in the trial court's findings. Therefore, the acquittal was upheld.

Key Issues

1. Whether the respondent wilfully failed to furnish his income tax return within the due date as required under Section 139(1) of the Income Tax Act, 1961, thereby committing an offence under Section 276 CC of the Act? The appellant contended that the respondent submitted his income tax return for assessment year 1978-79 with a delay of over 28 months, which was established by evidence. The appellant argued that the trial court had no reason to acquit the respondent under these circumstances and that the High Court's interference was warranted. The respondent argued that while there was a delay in filing the return, it was neither wilful nor intentional, and thus did not attract the principle of 'mens rea'. The respondent submitted that the trial court passed a reasoned judgment in his favour, giving him the benefit of doubt, and therefore, the High Court's interference was not warranted.