PRAKASH NATH KHANNA AND ANR. versus COMMISSIONER OF INCOME TAX AND ANR.

Citation: [2004] 2 S.C.R. 434 · Decided: 16-02-2004 · Supreme Court of India · Bench: DORAISWAMY RAJU · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
PRAKASH NA TH KHANNA AND ANR. 
v. 
COMMISSIONER OF INCOME TAX AND ANR. 
FEBRUARY 16, 2004 
B 
[DORAISWAMY RAJU AND ARIJIT PASAYAT, JJ.] 
Income Tax Act, 1961: 
Section 276-CC-Failure to furnish return-Return for assessment year 
C 1988-89 filed in 1991 before the assessment was completed-Prosecution under 
the section-Applicability-Held: Expression 'due time' occurring in the section 
means that the return is to be farnished within the time stipulated under sub-
section (1) of section 139 or by notice given under sub-section (2) of section 
139-Jf return is filed in terms of section 139(4) before the assessment is 
D made, it would be infraction of section 139(1) and (2) as time is prescribed 
therein and return is to be filed within the time prescribed-This is the legislative 
intent of the statute-Further, discovery of failure regarding tax evasion 
exceeding the monetary limit mentioned, is not a condition precedent for 
applicability of section 276-CC-When return under section 139(4) is filed 
before discovery of any evasion, it cannot be said that section 276-CC has no 
E application-Section 139(1), (2) and (4). 
F 
Sections 276 CC and 278-E-Failure to furnish return-Return for 
assessment year 1988-89 filed in year 1991-Presumption as to culpable 
mental state--Held: Under Section 278£, Court can presume the culpable 
mental state but the accused can plead to the contrary in defence-On facts, 
High Court did not deal with these aspects rightly-Accused can plead absence 
of culpable mental state at the trial. 
Interpretation of Statutes: 
Rule of construction-Legislative intent must be found in word used by 
G the legislature itself-If the statutory provision is plain and unambiguous, 
Court cannot read anything into the statute-Further while interpreting Court 
can only interpret the law and not legislate it. 
H 
Principles of construction-Casus omissus and reading statute as a 
434 
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PRAKASH NA TH KHANNA v. COMMISSIONER OF INCOME TAX 
435 
whole-Discussed. 
Heading of section or marginal note-Reliance upon-Held: It can be 
relied upon to clear any doubt or ambiguity and to discern legislative intent-
Provisions of section 276-CC clear as such there is no scope for clearing any 
doubt or ambiguity-Income Tax Act, 1961-Section 276-CC. 
A 
B 
Appellants and others are the partners of a firm. For assessment year 
1988-89 income tax return was filed on 20.3.1991 and the assessment was 
completed on 26.8.1991. Penalty was imposed under section 27l(l)(a) of 
the Income Tax Act for late submission of the return. Assistant 
Commissioner filed complaint in terms of section 276-CC before the Chief C 
Judicial Magistrate who took cognizance of the offence and issued process. 
Appellants filed writ applications challenging the legality of the 
proceedings. High Court dismissed the writ petitions. Hence the present 
appeals. 
Appellants relying on Kullu Valley Transport Co's case that the return D 
furnished under Section 139(4) at any time before the assessment is made 
has to be regarded as a return furnished under section 139(1), contended 
that the return was furnished in due time and consequently section 276-
CC of the Act is not attracted; that having regard to the marginal heading 
of section 276-CC it would not apply to the cases of assesses who have 
been regularly assessed to income tax and have voluntarily submitted their E 
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returns of income without issue of any notice within time permissible under 
the Act; that section 276-CC is applicable where tax evasion exceeds Rs. 
1,00,000 and such failure is not discovered and in the instant case there 
has been no discovery of the failure regarding tax evasion and assessee 
has submitted return voluntarily; that.there has been no concealment of F 
income and the allegation of tax evasion is based on no evidence and is 
contrary to the materials on record; and that the appellants had no guilty 
mind. 
Respondents contended that the High Court was justified in 
dismissing the writ petitions; that the decision in Kullu Valley's case has G 
no application to the facts of the instant case as sub-sections (1) and (4) 
of section 139 deal with different situations and it cannot be said that a 
return filed in term of section 139(4) would mean compliance with the 
requirements indicated in section 139(1); and that section 278-E raises a 
rebuttable presumption and the factual aspects raised by the appellants 
can be placed for consideration in the proceedings before t

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