LexSASI ENTERPRISES versus ASSISTANT COMMISSIONER OF INCOME TAX
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[2014] 2 S.C.R. 175 SAS! ENTERPRISES v. ASSISTANT COMMISSIONER OF INCOME TAX (Criminal Appea No. 61 of 2007) JANUARY 30, 2014 [K.S. RADHAKRISHNAN AND A.K. SIKRI JJ.] INCOME TAX ACT, 1961: A B ss. 139 and 276 CC - Income-tax return - Non-filing of - c Prosecution - Held: s. 139 as it stood at the relevant time, states that it is mandatory on the part of the assessee to file the return before the due date. s. 144 rlw ss. 139 and 276 - Best judgment assessment - Effect of on liability of assessee to file return - Held: The firm D is independently required to file the return and merely because there has been a best judgment assessment uls 144 would not nullify the liability of the firm to file the return as per s. 139(1). s.276CC rlw ss.142 and 148 - Held: Offence· u/s 276CC is attracted on failure to comply with the provisions of s. 139(1) or failure to respond to the notice issued u/s 142 or s. 148 of the Act within the time limit specified therein. s.276CC - Prosecution - Pendency of appeal - Effect of - Held:Pendency of the appellate proceedings cannot be said to be a relevant factor for not initiating prosecution u/s 276CC of the Act - Interpretation of statues. E F s.278E - Non-filing of return - Presumption - Held: Court G in a prosecution of offence, like s. 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 - Appellants have to prove the circumstances which prevented them from 175 H 176 SUPREME COURT REPORTS [2014] 2 S.C.R. A filing the returns as per s.139(1) or in response to notices u/ ss 142 and 148. The appellant in Crl. A.. No. 61 of 2007, a registered partnership firm, and its partners, appellants in Crl. A. 8 No.s. 62 and 63, namely, A-2 and A-3, were prosecuted for committing offences punishable u/s 276 CC of the Income Tax Act, 1961 as they did not file return for the assessment years 1991-92 and 199r-93 in respect of the firm and for the assessment year 1993-94 in their individual capacity. The appellants filed two discharge C petitions u/s 245(2) Cr.P.C., which were dismissed by the Chief Metropolitan Magistrate and their criminal revisions were dismissed by the High Court. In the instant appeals filed by the assessees the D questions for consideration before the Court were as under: "(1) Whether an assessee has the liability/duty to file a return u/s 139(1) of the Act within the due date E prescribed therein? (2) What is the effect of best judgment assessment u/s 144 of the Act and will it nullify the liability of the assessee to file its return u/s 139(1) of the Act? F (3) Whether non-filing of return u/s 139(1) of the Act, as well as non-compliance of the time prescribed u/ss 142 and 148 of the Act are grounds for invocation of the provisions of s 276CC of the Act? (4) Whether the pendency of the appellate G proceedings relating to assessment or non-attaining finality of the assessment proceedings is a bar in initiating prosecution proceedings u/s 276CC due to non-filing of returns? H (5) What is the scope of s 278E of the Act, and at what SAS! ENTERPRISES v. ASSISTANT COMMISSIONER 177 OF INCOME TAX stage the presumption can be drawn by the Court?" A Dismissing the appeals, the Court HELD: 1.1. Section 139 of the Income Tax Act, 1961 placed a statutory mandate on every person to file income tax return in the prescribed form and in the B prescribed manner. The Direct Tax Laws (Amendment) Act, 1987 with effect from 01.04.1989 made various amendments to the Income Tax Act, by which the assessing officer has no power to extend the time for filing a return of income u/s 139(1) and to extend the time C for filing u/s 139(3), a return of loss intended to be carried forward. The time prescribed for filing a belated return u/ s 139(4) or a revised return u/s139(5) was reduced to one year from the end of the relevant assessment year. The provision of s 139(2) stood incorporated in s 142(1 )(i). The D notice u/s 142(1)(i) to furnish a return of income cannot be issued in the course of the assessment year itself and need not give the person concerned a minimum period of 30 days for furnishing the return. Non-compliance with a notice u/s 142(1)(i) may attract prosecution u/s 276CC. E [para 16] [190-F-H; 191-A-C] 1.2. The Income Tax Act had stipulated both the penalty u/s 271 (1 )(a) and prosecution u/s 276CC, the former for depri
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