Law:

Section:

Section 276CC of the Income-tax Act, 1961 - Offences and prosecutions - Wilful attempt of evade tax - Assessment year 1982-83 - Due to late filing of return by petitioner, ITO charged interest under section 139(8) as also under sections 217 and 220(3) - ITO further initiated penalty proceedings under section 271(1)(a) which were still pending - Meanwhile, a criminal complaint under section 276CC(ii) was filed by ITO against petitioner for wilful default in filing return by due date - Whether by charging interest under section 139(8) ITO had impliedly extended time to file return and, therefore, since question of wilful default did not arise, criminal proceeding initiated against petitioner was liable to be quashed - Held, yes FACTS For the assessment year 1982-83, the petitioner-karta of a HUF, filed its return on 15-2-1985 instead of on 31-7-1982, and also paid tax on self-assessment. The petitioner after completing the assessment under section 143(1), charged interest under section 139(8) up to the date of filing the return. He also charged interest under sections 217 and 220(2). The ITO also initiated penalty proceedings under section 271(1)(a) for failure to furnish the return within the prescribed period. The said proceedings were still pending. In the meantime on the basis of a criminal complaint filed by the ITO before the Magistrate under section 276CC(ii)the petitioner was served with summons under the provisions of the Code of Criminal Procedure, 1898, alleging, inter alia, therein that the petitioner having failed and neglected to furnish the return by the due date, had committed an offence punishable under section 276CC(ii) On writ : HELD A criminal prosecution for an offence under a special statute must not be initiated as a matter of course where the prosecution would involve intricate questions of interpretation of the Act. The department should not rush with the prosecution without any determination by the ITO of the liability of the assessee which was sought to be made the basis for prosecution. In this case, though penalty proceeding under section 271(1)(a) was initiated against the petitioner for delay in filing the return no order had been…

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