By K. B. Bhujle
Advocate
11 S. P. Velayutham vs. ACIT [2022] 442 ITR 74 (Mad) A. Y.: 2013-14 Date of order: 28th January, 2022 Ss. 140A and 276C(2) of ITA, 1961
Offences and prosecution — Willful evasion of tax — Self assessment — Default in payment of tax on time — Assessee paying tax demand in instalments — No mala fide intention to evade tax — Willful attempt cannot be inferred merely on failure to pay tax on time — Prosecution quashedAn order of attachment of the immovable property u/s 226 of the Income-tax Act, 1961 was passed by the Department towards the remaining tax dues of the assessee since the assessee did not pay the entire tax demand. Prosecution was launched against the assessee u/s 276C(2) on the ground that the assessee did not pay the entire tax demand. It was stated in the complaint that the reason given in the reply for non-payment of tax was general in nature, and loss in business could not be an excuse for evading tax.
The Madras High Court allowed the revision petition filed by the assessee and held as under:
“i) To prosecute an assessee u/s. 276C of the Income-tax Act, 1961 there must be a wilful attempt on the part of the assessee to evade payment of any tax, penalty or interest. The Explanation to section 276C makes it clear that the evasion shall include a case where a person makes any false entry or statement in the books of account or other document or omission to make any entry in the books o
