By Adv. R. S. Agrawal 

 

THROUGH the judgement of the case- Rajinder Kumar v. State & Another, delivered on December 16, 2022, Justice Suresh Kumar Kait at the High Court of Delhi has ruled that the age at the time of commission of offence will be relevant and not that (time), when the proceedings were initiated; for the purpose of applying relevant law.

In this case, sole issue to be examined by the High Court was as to whether the Circular / Instruction No. 5051 of February 7, 1991 applies to the present case or not? The High Court has noted that the facts of this case are more or less similar to the those (facts ) of the case of Pradip Burman v. Income Tax Officer -2015 SCC OnLine Delhi 13739 and ‘my’ (the Judge’s) view with regard to Circular/Instruction 5051 of February 7, 1991 still holds the field and so, reliance placed upon the decision – Arun Kumar Bhatia & Another V. Vijay Kumar and Others -2011 X Ad Delhi 347 in this petition is of no assistance to the case of the petitioner. The petitioner has filed this petition seeking quashing of complaint case- ITO v. Rajinder Kumar filed under the provisions of sections 276C (1)/276D and 277 of the Income Tax Act and all consequential proceedings arising there-from.

In this petition, the grounds urged by the petitioner, who claims to be an Architect by profession and 80 years of age are that detailed response to the Show Cause notices issued by the Department were sent and the beneficial circulars were also brought to their knowledge, in particular Instruction No. 5051 of February 7, 1991. However, the Commissioner of Income Tax did not consider the replies filed by the petitioner and initiated proceedings under section 276C(1)/276-D and 277 of the Income Tax Act, 1961 for Assessment Year 2006-07; in the year January 14, 2016 for allegedly evading tax for the assessment year 2006-07.

During hearing, the petitioner’s counsel urged that as on March 31, 2006,, petitioner was already 70 years of age and in terms of Instruction No. 5051 of February 7, 1991; prosecution cannot be initiated against a person who had attained the age of 70 years at the time of commission of the offence. Reliance was placed upon the decision in Arun Kumar Bhatia’s case.

wherein on a complaint under section 276CC of the Income Tax Act, this Court while relying upon Circular of February 7, 1991 issued by the Central Board of Direct Taxes and also the fact that petitioner therein was above 70 years of age were discharged from all charges. However, the Trial Court while ignoring the aforesaid position of law, rejected the petitioner’s appeal for discharge on November 24, 2016. Reliance was also placed upon the decision in the case-Union of India & Others v. Arviva Industries India Ltd. and Others-(2014) 3 SCC 159, wherein the Supreme Court has held that the Circulars issued by the Department are binding on them and stand contrary thereto, cannot be taken.

It was also submitted by the senior counsel that in order to buy peace in his old age, the petitioner had paid all the taxes and interest for the assessment year 2006-07 on the basis of documents provided to him during search and proceedings on May 16, 2012, but the respondents have taken a stand that despite payment of taxes petitioner will not be absolved of the offences committed by him.

It was submitted by the petitioner’s counsel that there was no provision for the assessee to disclose foreign account till the year 2013 and still the petitioner has paid taxes, which substantiates that the default on the petitioner’s part was not intentional and deliberate in attempt to evade the tax. Further, the counsel sought quashing of the impugned complaint and prayed for allowing the petition. It was contended by the Department’s counsel that the petitioner is a wilful defaulter and did not co-operate in the proceedings initiated by the respondents and so he cannot be permitted to take benefit of his age to evade tax by having a huge sum in an undisclosed foreign account.

In rebuttal, the petitioner’s counsel urged that the petitioner deserved to get umbrella of Para- 4 of Instruction No. 5051 issued by the CBDT which prohibits prosecution of persons above 70 years of age. It was submitted that the date of birth of petitioner is March 30, 1936 and the date of alleged offence is assessment year 2006-07 and so, the petitioner had already attained the age of 70 years not only at the time of filing of return for the year 2006-07 but prior to the relevant year 2006-07 itself. It was stated by the petitioner’s counsel that the complaint in question has been filed under the provisions of Sections 276C and D and 277 of the Act of 1961.

The provisions of section 277 pertains to ‘Concealment of Income’ and the penalty of Rs 90,45,966/- imposed under section 271(1)(c) is paramateria, as it is a civil consequence; whereas 276C of the Act of 1961 is a criminal consequence. Lastly, it was submitted that the present petition deserves to be allowed and it was prayed that petitioner deserves to be discharged from the offences he was charged with.

The HC has stated that on September 26, 2013, Show Cause Notice under section 274 read with 271 of the Act was issued against him and also that penalty under section 271(1)(b) of the Act for non-compliance of notice under section 142(1) was also levied through the order of September 26, 2013. It is only thereafter that the petitioner had chosen to file revised Income Tax and by doing so, he cannot evade the judicial process of law for not disclosing his correct income and foreign account since the year 1991.

The judge, who has also authored the judgement in the Pradip Burman’s case, has stated that in his considered opinion petitioner cannot be permitted to take benefit of Circular/Instruction No. 5051 of February 7, 1991 to find an escape route for the wrong committed by him. Accordingly, the High Court has dismissed the petition.