MM TAX CLUB

A Delhi Court recently convicted and sentenced a woman to six months in jail for not filing a return on income of Rs two crores.

This case pertains to a complaint filed by the Income Tax Office (ITO) alleging that TDS (tax deducted at source) amounting to Rs. Two lakh was deducted against the receipt of Rs. two crore made to the accused during the financial year 2013-14, however, no return of income for the assessment year 2014-15 was filed by the assessee/accused.

Additional Chief Metropolitan Magistrate (ACMM) Mayank Mittal sentenced Savitri after hearing submissions and considering the facts and circumstances of the case.

"The convict is awarded a sentence of simple imprisonment for six months with a fine of Rs 5,000 and in default to undergo simple imprisonment for one month," ACMM Mittal said in the order passed on March 4.

However, the court granted her 30 days' bail to challenge the order after considering her application.

Special public prosecutor (SPP) Arpit Batra submitted that what is material for imposing a sentence on a convict is not the amount of tax evaded, but the purpose of the provision.

It was also submitted that the purpose of the provision is deterrence among the persons liable to pay the tax to file their return of income in time and to pay the tax accordingly.

He also submitted that a maximum amount of imprisonment should be awarded to the convict and a substantial amount of fine should also be imposed.

On the other hand, counsel for the convict submitted that the sentence awarded to the convict should concern the social circumstances of the convict and the condition of the convict at the time of the commission of a crime and at the time of imposing of sentence.

It was submitted that the convict is a widow lady and uneducated. There is no one in the family of convicts to take care of the family except the convict only.

As per the Prosecution, a letter on September 11, 2017, was issued by the ITO to the convict for verification of data on whether the income tax return was filed for the assessment year 2014-15 or not, however, the accused failed to file a reply.

A notice dated January 10, 2018, under Section 142(1) of The Income Tax Act, 1961 (IT Act ) was issued to the accused with direction to furnish the return of assessment year 2014-15, however, no compliance was made by the assessee / accused, the Prosecution said.

Thereafter, ITO issued a notice on January 22, 2018, under Section 271F of The IT Act to the accused for non-filing of the return and further accused had not bothered to reply to the same.

Hence, by way of an order dated February 9, 2018, the accused was directed to pay a penalty of Rs 5,000.

A proposal for a grant of sanction was sent to the Principal Commissioner of Income Tax.

Before the issuance of a sanction, a show cause notice under Section 276CC of the IT Act was issued to her. Thereafter, a reply on behalf of the convict was filed by her authorized representative on March 18, 2018.

After considering the same and giving sufficient opportunities to the convict, the Principal Commissioner of Income Tax, New Delhi, passed a sanction order permitting the launching of prosecution against the accused and directed the Income Tax Officer, to file the present complaint u/s 276CC read with 279 of IT Act.

While convicting Savitri on February 28, the Court had said the complainant has been able to prove beyond reasonable doubt the service of letter/notice issued to the accused dated September 11, 2017, and notice issued under Section 142(1) of The Act dated January 10, 2018, whereby the accused was duty bound to file a return of income which admittedly not filed by the accused.

The Court held that the accused also could not bring any material or fact before the court either to bring its case within the scope of proviso to Section 276CC of The Act. The accused also could not bring any evidence on record to rebut the presumption of culpable mental state under Section 278E of The Act.

"Accordingly, the accused is held guilty of not filing the return of income for the assessment year 2014-15 under Section 276CC of The Act. Accordingly, the accused is convicted foran offence punishable under Section 276CC of the Act," the court said in the judgement.