LI Network
Published on: 17 August 2023 at 16:10 IST
The Supreme Court has issued a stay on the criminal proceedings instigated by the Income Tax Department against DMK MP Kathir Anand.
This action comes after the Madras High Court declined to quash the said proceedings in July, centering on allegations of delayed filing of Income Tax returns and potential tax evasion.
The bench, comprised of Justice Hrishikesh Roy and Justice Pankaj Mithal, granted the stay on the criminal proceedings in response to an appeal submitted against the Madras High Court’s order.
The High Court had refused to annul the criminal complaint filed by the Income Tax Department under Sections 276CC (failure to file return of income) and 276C(2) (willful attempt to evade payment of tax) of the Income Tax Act, 1961 for the Assessment Year 2013-14.
During the proceedings, Senior Advocates S Ganesh and P Wilson represented Kathir Anand and asserted that the returns for the Assessment Year 2013-14 were voluntarily filed by Anand with some delay. However, these returns were filed well before the assessment order issued by the IT Department on March 24, 2016.
The court also considered the petitioner’s argument that the 2016 assessment order reflected the same self-assessed tax and interest that had been already remitted due to the late filing of returns. Despite this, the Income Tax department sanctioned his prosecution, citing a statutory presumption against him under Section 278E of the IT Act.
The court noted, “There is no mens rea/intention to evade tax as the return and the payable tax with interest, was paid well before the assessment order and the return furnished by the assessee, was also accepted by the assessing officer.” As a result, the Supreme Court ordered the stay on the proceedings.
This appeal was submitted by Anand, challenging the decision of the Madras High Court, which refused to quash the criminal complaint lodged by the Income Tax Department against him in 2016 for allegedly not filing his returns for the Assessment Year 2013-14.
The petitioner asserted that he had filed his Income Tax Return for the relevant year on March 29, 2015, within the extended period defined by Section 139(4) of the Income Tax Act, 1961. Furthermore, he paid the tax along with interests totaling Rs.1,04,94,056/- on March 14, 2016. Despite these actions, the Assistant Commissioner of Income Tax sought prosecution sanction, which was granted.
The Madras High Court had declined to exercise its powers under Section 482 of the Criminal Procedure Code and stated that the mere filing of the return during the extended time period does not negate the criminal prosecution.
The Supreme Court concluded by stating that it can only be determined during the trial whether there was willfulness in the delay of filing returns and tax payment.
The matter hinges on factual evidence, and the court’s jurisdiction under Section 482 of the Criminal Procedure Code does not entail presuming innocence or absence of willfulness.