Karnataka High Court Upholds Prosecution for Late Income Tax Filing
The Karnataka High Court ruled that late income tax filing or return (ITR) filing can result in both penalties and prosecution. Justice S. Vishwajith Shetty dismissed Rajkumar Agarwal’s plea to quash criminal proceedings initiated by the Income Tax Department.
Court’s Decision on ITR Delay
Agarwal failed to file his ITR on time for Assessment Years 2012-13 to 2015-16. The Income Tax Department prosecuted him under Section 276CC of the Income Tax Act. The department argued that mere payment of penalties does not exempt taxpayers from criminal prosecution.
Agarwal contended that he filed returns after receiving a Section 139 notice and paid the penalty. He also claimed that personal hardships, including his brothers’ deaths, caused the delay. However, the court emphasized that Section 276CC applies when returns are not filed within the stipulated time, even after notices under Sections 142 or 148.
Key Legal Points
Penalty alone does not prevent prosecution: Even after paying penalties, taxpayers can face legal action for delayed filings.
Presumption under Section 278E: The law assumes guilt unless the accused rebuts it with evidence before the Magistrate.
Prosecution applies after tax authorities detect the delay: The proviso to Section 276CC applies only to voluntary filings under Section 139(1), not cases where authorities intervene.
Final Verdict
The court dismissed Agarwal’s plea, ruling that he must present evidence in the trial court to challenge the prosecution. It reiterated that delayed ITR filing can lead to both penalties and criminal prosecution.
