Law:

Section:

Section 276C, read with sections 277, 278 and 278B, of the Income-tax Act, 1961 - Offences and prosecution - Wilful attempt to evade tax - IAC (Assessment) found 'nil' return filed by petitioner-society to be wrong and determined its income - Commissioner (Appeals) while setting aside assessment order, asked for de novo assessment - While petitioner's appeal against order of Commissioner (Appeals) was pending before Tribunal, IAC passed fresh assessment order determining petitioner's income at a higher figure and filed criminal complaint before trial court against petitioner and its office-bearers for having committed offences under sections 276C(1), 277, 278 and 278B(2) - Meanwhile, Tribunal cancelled order of Commissioner (Appeals) implying thereby that original assessment order remained intact - Whether in view of reassessment order becoming redundant due to appellate order being set aside by Tribunal, criminal case filed on basis of said reassessment order was liable to be quashed - Held, no - Whether a legal person like petitioner-society, could have guilty mind and be liable for offences under sections 276C, 277, 278 and 278B(2) - Held, yes Facts The petitioner-society filed its return showing loss. The IAC (Assessment), however, found the return to be wrong and determined its income. During the course of the assessment proceedings, documents filed by the petitioner had been examined and evidence was collected which revealed that huge amounts claimed as expenditure by the petitioner were false and were intentionally included in the return to inflate the figures in order to escape the taxation of income. On appeal, the Commissioner (Appeals), while setting aside the assessment, remanded the case for de novo assessment. The petitioner filed a further appeal before the Tribunal. In the meantime, the IAC passed a fresh assessment order determining the society's income at a higher figure. On this basis, a criminal complaint was instituted before the trial court. The Tribunal, however, held that the Commissioner (Appeals) was not right in remanding the case and directed the Commissioner (Appeals) to decide the appeal against the first assessment order afresh.…

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