The Supreme Court has held that filing of Income Tax Return (ITR) after the due date but before prosecution does not impact offences under Section 276CC of the Income Tax Act.
The bench of Justice J.B. Pardiwala and Justice Sanjay Karol has observed that an offence under Section 276CC could be said to have been committed as soon as there is a failure on the part of the assessee in furnishing the return of income within the due time as prescribed under Section 139(1) of the Act. Subsequent furnishing of the return of income by the assessee within the time limit prescribed under sub-section (4) of Section 139 or before prosecution is initiated does not have any bearing upon the fact that an offence under Section 276CC has been committed on the day immediately following the due date for furnishing return of income.
The appellant/assessee has challenged the judgment and order passed by the High Court of Gujarat by which the High Court rejected the writ petition filed by the appellant herein and thereby upheld the order of the Chief Commissioner of Income Tax, Vadodara rejecting the application preferred by the appellant-assessee for compounding of the offence under Section 276CC of the Income Tax Act, 1961.
The Assessee had committed an offence in AY 2011-12 and 2013-14 in not filing returns by due date. Assessee had filed belated returns voluntarily.
Show-cause notice was issued on 27.10.2014 in respect of AY 2011-12. Self assessment tax payable was Nil. The assessee moved an application seeking compounding under 2008 guidelines. The applications were allowed vide order dated 11.11.2014.
Later on 12.03.2015 another show-cause notice was issued in respect of AY 2013-14. Self assessment tax payable was Rs. 2,78,749/-. The appellant replied to the notice alongwith application for compounding under 2014 guidelines issued by CBDT. The assessee also stated that he did not have necessary funds to pay the tax and delay was neither deliberate nor wilful.
The application was rejected on ground that the return was filed after the issuance of show-cause notice under section 276CC and the offence would not be treated as “first offence” under 2014 guidelines.
Challenge to the order before the Gujarat High Court was rejected by the high court.
After reviewing the statutory provisions and guidelines issued by CBDT for compounding. The Supreme Court held that the high court erred in rejecting the appellants ‘first offence’ as defined in 2014 guidelines as the offence in respect of AY 2013-14 was the first offence.
Case Details
Case Title: Vinubhai Mohanlal Dobaria Versus Chief Commissioner Of Income Tax & Anr.
Case No.: CIVIL APPEAL NO. 1977 OF 2025
Date: 07/02/2025
