- (1.) These appeals revolve round the scope and ambit of Section 276-CC of the Income-tax Act, 1961 (in short the 'Act'), and are directed against a common judgment rendered by a Division Bench of the Himachal Pradesh High Court which rejected the three writ petitions filed by the appellants in these two appeals. The Assistant Commissioner of Income-tax, Circle I, Shimla filed a complaint in terms of Section 276-CC of the Act in the Court of the CJM who had issued process of taking cognizance of the offence. In each of the writ applications, challenge was made to legality of the proceedings pending in the Court of Chief Judicial Magistrate, Shimla (in short the 'CJM').
(2.) The factual position is almost undisputed and needs to be noted in brief : The three appellants were partners of a firm carrying on business under the name and style of M/s. Kailash Nath and Associates. Apart from the three appellants, two other persons were partners and one of them Shri Kailash Nath was the Managing partner in terms of the Partnership Deed dated 1-4-1983. For the assessment year 1988-89 return of income was to be filed on or before 31-7-1988, but was in fact filed on 20-3-1991. Assessment under Section 143(3) of the Act was completed on 26-8-1991. Proceedings for late submission of return were initiated against the appellants under Section 271(1)(a) of the Act and penalty was imposed. Proceedings in terms of Section 276-CC of the Act were also initiated and complaint was filed before the concerned Court. As noted above, cognizance was taken and process was issued. The writ applications were filed challenging legality of the proceedings. By the impugned judgment the High Court dismissed the writ petitions. The points which were mooted before the High Court were reiterated in the present appeals.
(3.) Mr. G. C. Sharma, learned Senior Counsel appearing for the appellants urged the following points for consideration : 1. The expression "to furnish in due time" occurring in Section 276-CC means to furnish within the time permissible under the Act. The return furnished under Section 139(4) at any time before the assessment is made has to be regarded as a return furnished under Section 139(1). This was so held by this Court in Commissioner of Income-tax, Punjab v. Kullu Valley Transport Co. Pvt. Ltd. (1970 (77) ITR 518) in the context of Sections 22(1) and 22(3) of the Indian Income-tax Act, 1922 (in short the 'old Act') which are in pari materia of Section 139(1) and Section 139(4) of the Act. It follows that return was furnished in "the due time" and consequently Section 276-CC is not attracted. 2. The provisions of Section 276-CC(i) are not intended to apply to the cases of assessees who have been regularly assessed to income-tax and have voluntarily submitted their returns of income without issue of any notice to do so by the Assessing Officer in that behalf, within the time permissible to furnish the return under the Act. This interpretation gets support from the marginal heading and explanatory memo laid before Parliament when the Section was introduced. 3(i) The provision only applies where the amount of tax which would have been evaded if the failure had not been discovered exceeds Rs. 1,00,000/-. There has been no discovery of the failure in this case from the point of view of evasion of tax. The assessee has submitted return voluntarily, paid advance tax and self-assessment tax. 3(ii) There has been no concealment of income in this case, and no penalty has been or can be imposed. The allegation made in the complaint that there has been evasion of tax to the extent of Rs. 5,68.039/- is based on no evidence and is contrary to the materials on record.;