SASI ENTERPRISESversusASSISTANT COMMISSIONER OF INCOME TAX

                      [2014] 2 S.C.R. 175


                  SAS! ENTERPRISES                                      A
                           v.
      ASSISTANT COMMISSIONER OF INCOME TAX
            (Criminal Appea No. 61 of 2007)
                      JANUARY 30, 2014
                                                                        B
      [K.S. RADHAKRISHNAN AND A.K. SIKRI JJ.]

     INCOME TAX ACT, 1961:

     ss. 139 and 276 CC - Income-tax return - Non-filing of -           c
Prosecution - Held: s. 139 as it stood at the relevant time,
states that it is mandatory on the part of the assessee to file
the return before the due date.

     s. 144 rlw ss. 139 and 276 - Best judgment assessment -
Effect of on liability of assessee to file return - Held: The firm      D
is independently required to file the return and merely
because there has been a best judgment assessment uls 144
would not nullify the liability of the firm to file the return as per
s. 139(1).
                                                                        E
      s.276CC rlw ss.142 and 148 - Held: Offence· u/s 276CC
is attracted on failure to comply with the provisions of s. 139(1)
or failure to respond to the notice issued u/s 142 or s. 148 of
the Act within the time limit specified therein.
                                                                        F
     s.276CC - Prosecution - Pendency of appeal - Effect of
- Held:Pendency of the appellate proceedings cannot be said
to be a relevant factor for not initiating prosecution u/s 276CC
of the Act - Interpretation of statues.

     s.278E - Non-filing of return - Presumption - Held: Court          G
in a prosecution of offence, like s. 276CC has to presume the
existence of mens rea and it is for the accused to prove the
contrary and that too beyond reasonable doubt - Appellants
have to prove the circumstances which prevented them from
                               175                                      H
    176       SUPREME COURT REPORTS             [2014] 2 S.C.R.

A filing the returns as per s.139(1) or in response to notices u/
    ss 142 and 148.

       The appellant in Crl. A.. No. 61 of 2007, a registered
  partnership firm, and its partners, appellants in Crl. A.
8 No.s. 62 and 63, namely, A-2 and A-3, were prosecuted
  for committing offences punishable u/s 276 CC of the
  Income Tax Act, 1961 as they did not file return for the
  assessment years 1991-92 and 199r-93 in respect of the
  firm and for the assessment year 1993-94 in their
  individual capacity. The appellants filed two discharge
C petitions u/s 245(2) Cr.P.C., which were dismissed by the
  Chief Metropolitan Magistrate and their criminal revisions
  were dismissed by the High Court.

     In the instant appeals filed by the assessees the
D questions for consideration before the Court were as
  under:
      "(1) Whether an assessee has the liability/duty to file
  a return u/s 139(1) of the Act within the due date
E prescribed therein?
        (2) What is the effect of best judgment assessment
    u/s 144 of the Act and will it nullify the liability of the
    assessee to file its return u/s 139(1) of the Act?

F       (3) Whether non-filing of return u/s 139(1) of the Act,
    as well as non-compliance of the time prescribed u/ss
    142 and 148 of the Act are grounds for invocation of the
    provisions of s 276CC of the Act?
       (4) Whether the pendency of the appellate
G proceedings relating to assessment or non-attaining
  finality of the assessment proceedings is a bar in initiating
  prosecution proceedings u/s 276CC due to non-filing of
  returns?

H         (5) What is the scope of s 278E of the Act, and at what
SAS! ENTERPRISES v. ASSISTANT COMMISSIONER 177
              OF INCOME TAX
stage the presumption can be drawn by the Court?"                A

    Dismissing the appeals, the Court
      HELD: 1.1. Section 139 of the Income Tax Act, 1961
placed a statutory mandate on every person to file
income tax return in the prescribed form and in the              B
prescribed manner. The Direct Tax Laws (Amendment)
Act, 1987 with effect from 01.04.1989 made various
amendments to the Income Tax Act, by which the
assessing officer has no power to extend the time for
filing a return of income u/s 139(1) and to extend the time      C
for filing u/s 139(3), a return of loss intended to be carried
forward. The time prescribed for filing a belated return u/
s 139(4) or a revised return u/s139(5) was reduced to one
year from the end of the relevant assessment year. The
provision of s 139(2) stood incorporated in s 142(1 )(i). The    D
notice u/s 142(1)(i) to furnish a return of income cannot
be issued in the course of the assessment year itself and
need not give the person concerned a minimum period
of 30 days for furnishing the return. Non-compliance with
a notice u/s 142(1)(i) may attract prosecution u/s 276CC.        E
[para 16] [190-F-H; 191-A-C]

     1.2. The Income Tax Act had stipulated both the
penalty u/s 271 (1 )(a) and prosecution u/s 276CC, the
former for depriving taxes due to the exchequer and latter
for the offence/infraction committed. By the Taxation            F
Laws (Amendment) Act, 1989, penalty provision u/s
271(1)(a) had been deleted w.e.f. 01.04.1989 and a
provision for levy of mandatory/compulsory interest u/s
234A of the Act was introduced. But, legislature has never
waived or relaxed its prosecuting provisions u/s 276CC           G
of the Act for the infraction or non-furnishing of return of
income. [para 17] [191-D-F]

    1.3 A plain reading of s.139 of the Act, as it stood at
the relevant time, states that it is mandatory on the part       H
    178     SUPREME COURT REPORTS               [2014] 2 S.C.R.


A of the assessee to file the return before the due date.
  Explanation (a) to the said section defines the term "due
  date", which is 30th November of the assessment year
  in the case of a company. The consequence of non-filing
  of return on time has also been stipulated in the Act.
B [para 19] [19J-D-E]

       1.4 The constitutional validity of s. 276CC, was
  upheld by the Karnataka High Court in Sonarome
  Chemicals Pvt. Ltd. Section punishes the person who
C "willfully fails to furnish the return of income in time".
  [para 22] [195-F-G]

         Sonarome Chemicals Pvt. Ltd. and others v. Union of
    India and others (2000) 242 ITR 39 (Kar) - approved.

0      2. On failure to file the returns by the appellants,
  income tax department made a best judgment
  assessment uls 144 of the Act and later show cause
  notices were issued for initiating prosecution uls 276CC
  of the Act. The declaration or statement made in the
E individual returns by partners that the accounts of the firm
  are not finalized and, therefore, no return has been filed
  by the firm, will not absolve the firm in filing the 'statutory
  return u/s 139(1) of the Act. The firm is independently
  required to file the return and merely because there has
  been a best judgment assessment u/s 144 would not
F nullify the liability of the firm to file the return as per s.
  139(1) of the Act. [para 26 and 29] [197-E; 199-B-C]

      3.1 Section 276CC applies to situations where an
  assessee has failed to file a return of income as required
G u/s 139 of the Act or in response to notices issued to the
  assessee uls 142 or s 148 of the Act. The proviso to s
  276CC gives some relief to genuine assesses. Section
  276CC takes in sub-s. (1) of s. 139, s.142(1)(i) and s.148.
  But, the proviso to s. 276CC takes in only sub-s. (1) of s.
H 139 of the Act and the provisions of s.142(1)(i) or 148 are
SAS! ENTERPRISES v. ASSISTANT COMMISSIONER 179
              OF INCOME TAX
conspicuously absent. Consequently, the benefit of                A
proviso is available only to voluntary filing of return as
required u/s 139(1) of the Act. Thus, the proviso would
not apply after detection of the failure to file the return and
after a notice u/s 142(1 )(i) or 148 of the Act is issued
calling for filing of the return of income. Proviso,              B
therefore, envisages the filing of even belated return
before the detection or discovery of the failure and
issuance of notices u/s 142 or 148 of the Act. [para 23-
24] [196-B-C, G-H; 197-A-B]

     3.2 Both s. 139(1) and sub-s. (1) of s.142 are referred      C
to in sub-s. (4) to s. 139, which specify time limit.
Therefore, the expression "whichever is earlier" has to
be read with the time if allowed sub-s. (1) to s.139 or
within the time allowed under notice issued under sub-
s. (1) of s. 142, whichever is earlier. So far as the instant     D
case is concerned, the assessee had not filed the return
either within the time allowed under sub-s. (1) of s. 139
or within the time allowed under notices issued under
sub-s. (1) to s. 142. [para 25] [197-C-D]
                                                                  E
    Prakash Nath Khanna and another v. Commissioner of
                                              =
Income Tax and another 2004 (2) SCR 434 (2004) 9 SCC
686 - relied on.

     3.3 It cannot be accepted that there has not been any
                                                                  F
willful failure to file the return by the appellants. On facts,
offence u/s 276CC of the Act has been made out in all
these appeals and the rejection of the application for the
discharge calls for no interference by this Court. [para 27]
[198-B-C]
                                                                  G
    Wellington v. Reynold (1962) 40 TC 209 -- referred to.

    4. Pendency of the appellate proceedings cannot be
said to be a relevant factor for not initiating prosecution
proceedings u/s 276CC of the Act. Section 276CC
                                                                  H
   180      SUPREME COURT REPORTS             [2014] 2 S.C.R.


A contemplates that an offence is committed on the non- .
  filing of the return and it is totally unrelated to the
  pendency of assessment proceedings except for second
  part of the offence for determination of the sentence of
  the offence, the department may resort to best judgment
B assessment or otherwise to past years to determine the
  extent of the breach. The language of s. 276CC is clear
  so also the legislative intention. It is trite law that "the
  language employ~d in a statute is the determinative
  factor of the legislative intent. It is well settled principle
c of law that a court cannot read anything into a statutory
  provision which is plain and unambiguous". If it was the
  intention of the legislature to hold up the prosecution
  proceedings till the assessment proceedings are
  completed by way of appeal or otherwise the same would
  have been provided in s. 276CC itself. Therefore, it cannot
0
  be said that no prosecution could be initiated till the
  culmination of assessment proceedings, especially in a
  case where the appellant had not filed the return as per
  s. 139(1) of the Act or following the notices issued u/s 142
E ors. 148 does not arise. [para 28] [198-D-H; 199-A]

       B. Permanand v. Mohan Koikal 2011 (3) SCR 932            =
   (2011) 4 sec 266 - referred to.

        5. Section 278E deals with the presumption as to
F culpable mental state, which was inserted by the Taxation
  Laws (Amendment and Miscellaneous Provisions) Act,
  1986. Court in a prosecution of offence, likes. 276CC has
  to presume the existence of mens rea and it is for the
  accused to prove the contrary and that too beyond
G reasonable doubt. Resultantly, the appellants have to
  prove the circumstances which prevented them from
  filing the returns as per s.139(1) or in response to notices
  u/ss 142 and 148 of the Act. [para 30] [199-D-E, F]

      6. Therefore, there is no reason to interfere with the
H order passed by the High Court. The criminal court is
SAS! ENTERPRISES v. ASSISTANT COMMISSIONER 181
              OF INCOME TAX
directed to complete the trial expeditiously. [para 31] [199-    A
G-H]

     Commissioner of Wealth Tax, Gujarat v. Vimlaben
                                        =
Vadi/al Mehta (Smt.) 1984 (1) SCR 480 (1983) 4 SCC 692,
Commissioner of Wealth Tax, Gujarat, Ahmedabad v. Vadi/al 8
                                   =
Lallubhai & Ors. 1984 (1) SCR .485 (1983) 4 sec 697 and
State of H.P. and others v. Gujarat Ambuja Cement Ltd. and
another 2ods, (1) Suppl. SCR 684    =   (2005) 6 sec 499;
Prakash Nath Khanl)a and another v. Commissioner of
                                              =
Income Tax and another 2004 (2) SCR 434 (2004) 9 SCC C
686; Maya Rani Punj (Smt.} v. Commissioner of Income Tax,
Delhi 1985 (3) Suppl. SCR 827    =  (1986) 1 sec 445; P.R.
Metrani v. Commissioner of Income Tax, Bangalore 2006 (9)
Suppl. SCR 1     =  (2007) 1 SCC 789, Kumar Exports v.
                                       =
Sharma Carpets 2008 (17) SCR 572 (2009) 2 SCC 513;
Ravinder Singh v. State of Haryana 1975 (3) SCR 453        D =
(1975) 3 SCC 742 and Standard Chartered Bank and others
v. Directorate of Enforcement and others 2006 (2) SCR 709
=  (2006) 4 sec 278 - cited.
                     Case Law Reference:                         E
     1984 (1) SCR 480              cited           para 10
     1984 (1) SCR 485              cited           para 10
     2005 (1) Suppl. SCR 684       cited           para 10
     2004 (2) SCR 434             relied on        para 10       F

     1985 (3) Suppl. SCR 827       cited           para 11
     2006 (9) Suppl. SCR 1         cited           para 12
     2008 (17) SCR 572             cited           para 12
                                                                 G
     1975 (3) SCR 453              cited           para 12
     2006 (2) SCR 709              cited           para 12
     (2000) 242 ITR 39 (Kar)      approved         para 22
                                                                 H
    182       SUPREME COURT REPORTS                 [2014} 2 S.C.R.


A         2011 (3) SCR 932            referred to         Para 28
        CRIMINAL AP PELLATE JURISDICTION : Criminal Appeal
    No. 61 of 2007.

      From the Judgment and order dated 02.12.2006 of the
B High Court of Judicature at Madras in Criminal R.C. Nos. 782
  and 784 of 2006.
                                  WITH
    Criminal Appeal No. 62 of 2007.

C Criminal Appeal No. 63 of 2007.

    Criminal Appeal No. 64 of 2007.

         Shekhar Naphade, Gaurav Aggarwal, Senthil, Meha
    Aggarwal, Varun Tandon, Subramonium Prasad, Pranab Kumar
0
    Mullick for the Appellant.

        Sidharth Luthra, ASG, K. Radhakrishnan, K. Ramaswami,
  W.A. Quadri, Arijit Prasad, Rajat Mathur, Gargi Khanna, Rahul
  Kaushik, Pranay Aggarwal, B.V. Balaram Das, Ajay Bansal,
E Rakesh Kumar, A.A. Chaudhary, Rajeev Kumar, Dheeraj Gupta
  for the Respondent.

          The Judgment of the Court was delivered by

       K.S. RADHAKRISHNAN, J. 1. We are concerned with
F four Criminal Appeals No.61 to 64 of 2007, out of which two
  Criminal Appeals No.61 of 2007 and 63 of 2007 relate to M/s
  Sasi Enterprises, a registered partnership firm, of which Ms.
  J. Jayalalitha and Mrs. N. Sasikala are partners, which relate
  to the assessment years 1991-92 and 1992-93 respectively.
G Criminal Appeal Nos.62 and 63 of 2007 relate to J. Jayalalitha
  and N. Sasikala respectively for the assessment years 1993-
  94. Proceedings giving rise to these appeals originated from
  the complaints filed by the Assistant Commissioner of Income
  Tax, Chennai, before the Additional Chief Metropolitan
H Magistrate (Egmore), Chennai, for the willful and deliberate
SAS! ENTERPRISES v. ASSISTANT COMMISSIONER 183
   OF INCOME TAX [K.S. RADHAKRISHNAN, J.J
failure to file returns for the assessment years 1991-92, 1992-     A
93 and hence committing offences punishable under Section
276 CC of the Income Tax Act, 1961 (for short "the Act").
Complaints were filed on 21.8.1997 after getting the sanction
from the Commissioner of Income Tax, Central II, Chennai under
Section 279(1) of the Income Tax Act. Appellants filed two          B
discharge petitions under Section 245(2) Cr.P.C., which were
dismissed by the Chief Metropolitan Magistrate vide order
dated 14.6.2006. Appellants preferred Cr!. R.C. Nos.781 to
786 of 2006 before the High Court of Madras which were
dismissed by the High Court vide its common order dated             c
2.12.2006, which are the subject matters of these appeals.

     2. M/s Sasikala Enterprises was formed as a partnership
firm by a deed dated 06.02.1989 with N. Sasikala and T.V.
Dinakaran as its partners, which was later reconstituted with
effect from 04.05.1990 with J. Jayalalitha and N. Sasikala as       D
partners. The firm did the business through two units, namely,
M/s Fax Universal and M/s J.S. Plan Printers, which, inter alia,
included the business in running all kinds of motor cars, dealing
in vehicles and goods etc. In the complaint E.O.C.C. No.202
of 1997 filed before the Chief Metropolitan Magistrate, Egmore,     E
M/s Sasi Enterprises was shown as the first accused (A-1) and
J. Jayalalitha and N. Sasikala were shown as (A-2) and (A-3)
respectively, who were stated to be responsible for the day-to-
day business of the firm during the assessment years in
question and were individually, jointly and severally made          F
responsible and liable for all the activities of the firm.
Partnership deed dated 04.05.1990 itself stated that the
partners, A-2 and A-3 are responsible and empowered to
operate bank accounts, have full and equal rights in the
management of the firm in its business activities, deploy funds     G
for the business of the firm, appoint staff, watchman etc. and
to represent the firm before income tax, sales tax and other
authorities.

     3. Mis Sasi Enterprises, the firm, did not file any returns
                                                                    H
    184      SUPREME COURT REPORTS                 [2014] 2 S.C.R.


A for the assessment year 1991-92 and 1992-93, for which the
  firm and its partners are being prosecuted under Section 276
  CC of the Act. J. Jayalalitha and N. Sasikala did not file returns
  for the assessment year 1993-94 and hence they are being
  prosecuted for that breach (in their individual capacity)
B separately but not for the assessment years 1991-92 or 1992-
  93 and their returns have been filed as individual assessee by
  them for the assessment years 1991-92 and 1992-93, though
  belatedly on 20.11.1994 and 23.02.1994 respectively. In those
  returns it was mentioned that accounts of the firm had not been
C finalized and no returns of the firm had been filed.

         4. The Assistant Commissioner of Income Tax in his
    complaint stated that the firm through its partners ought to have
    filed its returns under Section 139(1) of the Act for the
    assessment year 1991-92 on or before 31st August, 1991 and
D   for the assessment year 1992-93 on or before 31st August,
    1992 and A-2 in her individual capacity also should have filed
    her return for the year 1993-94 under Section 139(1) on or
    before 31.08.1993 and A-3 also ought to have filed her return
    for the assessment year 1993-94 on or before 31st August,
E   1993, as per Section 139(1) of the Act. The accused persons,
    it was pointed out, did not bother to file the returns even before
    the end of the respective assessment years, nor had they filed
    any return at the outer statutory limit prescribed under Section
    139(4) of the Act i.e. at the end of March of the assessment
F   year. It was also pointed out that a survey was conducted in
    respect of the firm under Section 133A on 25.08.1992 ·and
    following that a notice under Section 148 was served on the
    partnership firm on 15.2.1994 to file the return of income tax
    for the years in question. Though notice was served on
G   16.2.1994, no return was filed within the time granted in the
    notice. Neither return was filed, nor particulars of the income
    were furnished. For the assessment year 1991-92, it was stated
    that pre-assessment notice was served on 18.12.1995, notice
    under Section 142(1)(ii) giving opportunities was also issued
H   on 20.07.1995. The department made the best judgment
SAS! ENTERPRISES v. ASSISTANT COMMISSIONER 185
   OF INCOME TAX [K.S. RADHAKRISHNAN, J.]
assessment for the assessment year 1991-92 under Section               A
144 on a total income of Rs.5,84,860/- on 08.02.1996 and tax
was determined as Rs.3,02,434/- and demand notice for
Rs.9,95,388/- was issued as tax and interest payable on
08.02.1996.
                                                                       B
     5. For the assessment year 1992-93, the best judgment
assessment under Section 144 was made on 9.2.1996 on the
firm on a total income of Rs.14,87 ,930/- and tax determined at
Rs.8,08, 153/-, a demand notice was issued towards the tax and
interest payable.
                                                                       c
     6. We may indicate, so far as A-2 is concerned, the due
date for filing of return of income as per Section 139(1} of the
Act for the assessment year 1993-94 was 31.8.1993. Notice
under Section 142(1}(i} was issued to A-2 calling for return of
income on 18.1.1994. The said notice was served on her on              D
19.1.1994. Reminders were issued on 10.2.1994, 22.8.1994
and 23.8.1995. No return was filed as required under Section
139(4) before 31.3.1995. The Department on 31.7.1995 issued
notice under Section 142(1 }(ii} calling for particulars of income
and other details for completion of assessment. Neither the            E
return of income was filed nor the particulars of income were
furnished. Best judgment assessment under Section 144 was
made on 9.2.1996 on a total income of Rs.1,04,49, 153/- and
tax determined at Rs.46,68,676/- and demand of Rs.96,98,801/
-, inclusive of interest at Rs.55,53,882/- was raised after            F
adjusting pre-paid tax of Rs.5,23,756/-. The Department then
issued show-cause notice for prosecution under Section
276CC on 14.6.1996. Later, sanction for prosecution was
accorded by the Commissioner of Income Tax on 3.10.1996.

      7. A-3 also failed to file the return of income as per Section   G
139(1) for the assessment year 1993-94 before the due date
i.e. 31.8.1993. Notice under Section 142(1}(i} was issued to
A-3 calling for filing of return of income on 8.11.1995. Further,
notice was also issued under Section 142(1}(ii} on 21.7.1995
calli!lg for particulars of income and other details for completion    H
    186      SUPREME COURT REPORTS                [2014) 2 S.C.R.


A of assessment. Neither the return of income was filed nor the
  particulars of income were furnished. Best judgment
  assessment under Section 144 was made on 8.2.1996 on 'a
  total income of Rs. 70,28, 110/- and tax determined at
  Rs.26,86,445/-. The total tax payable, inclusive of interest due
B was Rs.71,19,527/-. After giving effect to the appellate order,
  the total income was revised by Rs.19,25,000/-, resulting in tax
  demand of Rs.20,23,279/-, inclusive of interest levied. Later, a
  show-cause notice for prosecution under Section 276CC was
  issued to A-3 on 7.8.1996. A-3 filed replies on 24.11.1996 and
c 24.3.1997. The Commissioner of Income Tax accorded
  sanction for prosecution on 4.8.1997.

       8. We may incidentally also point out, the final tax liability
  so far as the firm is concerned, was determined as
  Rs.32,63,482/- on giving effect to the order of the Income Tax
D Appellate Tribunal (B Bench), Chennai dated 1.9.2006 and after
  giving credit of pre-paid tax for the assessment year 1991-92.
  For the assessment year 1992-93 for the firm, final tax liability
  was determined at Rs.52,47,594/- on giving effect to the order
  of the Income Tax Appellate Tribunal (B Bench), Chennai dated
E 1.9.2006 and after giving credit of pre-paid tax. So far as A-2
  is concerned, for the assessment year 1993-94 final tax liability
  was determined at Rs.12,54,395/- giving effect to the order of
  Income Tax Appellate Tribunal (B Bench), Chennai dated
  11.10.2008 after giving credit to pre-paid tax. So far as A-3 is
F concerned, for the assessment year 1993-94, final tax liability
  was determined as Rs.9,81,870/- after giving effect to the order
  of Income Tax Appellate Tribunal (B Bench), Chennai dated
  14.9.2004 and after giving credit to pre-paid tax.

G     9. We have already indicated, for not filing of returns and
  due to non-compliance of the various statutory provisions,
  prosecution was initiated under Section 276CC of the Act
  against all the accused persons and the complaints were filed
  on 21.08.1997 before the Chief Metropolitan Magistrate, which
H the High Court by the impugned order has permitted to go on.
 SAS! ENTERPRISES v. ASSISTANT COMMISSIONER 187
    OF INCOME TAX (K.S. RADHAKRISHNAN, J.J
        10. Shri Shekhar Naphade, learned senior counsel A
  appearing for the appellants, submitted that the High Court did
  not appreciate the scope of Section 276CC of the Act. Learned
  senior counsel pointed out that once it is established that on
  the date of the complaint i.e. on 21.08.1997 the assessment
  had not attained finality, the complaint became pre-mature as B
  on the date of the complaint and no offence had taken place
  and all the ingredients of offence under Section 276 of the Act
  were not satisfied. Learned senior counsel pointed out that
  unless and until it is shown that failure to file the return was willful
  or deliberate, no prosecution under Section 276CC could be c
  initiated. Learned senior counsel pointed out that in fact, the
  second accused in her individual return had disclosed that the
  firni was doing the business and that it had some income and
  hence, it cannot be said that A-2 had concealed the fact that
  the firm had any intention to evade tax liability. Learned senior 0
  counsel also submitted that whether the assessee had
  committed any offence or not will depend upon the final
  assessment of income and tax liability determined by the
  appropriate authority and not on the assessment made by the
  assessing officer. Placing reliance on the proviso to Section E
/ 276CC learned senior counsel submitted that, that is the only
  interpretation that could be given to Section 276CC. In support
  of his contention reliance was placed on the Judgment of this
  Court in Commissioner of Wealth Tax, Gujarat v. Vimlaben
   Vadilal Mehta (Smt.) (1983) 4 SCC 692, Commissioner of
   Wealth Tax, Gujarat, Ahmedabad v. Vadilal Lallubhai & Ors. F
   (1983) 4 sec    697 and State of H.P. and others V. Gujarat
  Ambuja Cement Ltd. and another (2005) 6 SCC 499.
  Referring to Section 278E of the Act, learned senior counsel
  submitted that till the assessment does not attain finality,
   Section 276CC is not complete and the presumption under G
   Section 278E is not attracted. Learned senior counsel also
  submitted that the High Court has wrongly applied the principles
   laid down by this Court in Prakash Nath Khanna and another
   v. Commissioner of Income Tax and another (2004) 9 SCC
  686, in any view, which calls for reconsideration. Learned senior H
    188      SUPREME COURT REPORTS                [2014] 2 S.C.R.


A   counsel submitted that the said Judgment deals with the factum
    of proviso to Section 276CC of the Act which lays down that
    there is no offence if the tax amount does not exceed Rs.
    3,000/-.

         11. Shri Sidharth Luthra, learned Additional Solicitor
8
    General of India, appearing forthe Revenue, on the other hand,
    submitted that Section 139 of the Act placed a statutory
    mandate on every person to file an income tax return in the
    prescribed form and in the prescribed manner before the due
C   date i.e. 31st August of the relevant assessment year. Learned
    ASG submitted that on breach of Section 139(1) of the Act,
    cause of action to prosecute the assessee arises subject to
    other ingredients of Section 276CC of the Act. Learned ASG
    pointed out that what is relevant in the proceedings, is not only
    the due date prescribed in Section 139(1) of the Act, but also
D   time prescribed under Section 142 and 148 of the Act, by which
    further opportunities have been given to file the return in the
    prescribed time. In other words, Section 276CC, according to
    the learned ASG, applies to a situation where assessee has
    failed to file the return of income as required under Section 139
E   of the Act or in response to notices issued to the assessee
    under Section 142 or Section 148 of the Act. Learned ASG
    also submitted that the scope of proviso to Section 276CC to
    protect the genuine assessees who either file their return
    belatedly but within the end of the assessment year or those
F   who paid substantial amount of their tax dues by pre-paid taxes.
    Considerable reliance was placed on the Judgment of this
    Court in Prakash Nath Khanna and another (supra). Reliance
    was also placed on the Judgment of this Court in Maya Rani
    Punj (Smt.) v. Commissioner of Income Tax, Delhi (1986) 1
G   sec    445.

      12. Learned ASG also explained the scope of Section
  278E by placing reliance on P.R. Metrani v. Commissioner of
  Income Tax, Bangalore (2007) 1 SCC 789, Kumar Exports
H v. Sharma Carpets (2009) 2 SCC 513, and submitted that
SAS! ENTERPRISES v. ASSISTANT COMMISSIONER 189
   OF INCOME TAX [K.S. RADHAKRISHNAN, J.]
pendency of the appellate proceedings is not a relevant factor        A
in relation to prosecution under Section 276CC. Reference
was also made to Ravinder Singh v. State of Haryana (1975)
3 SCC 742 and Standard Chartered Bank and others v.
Directorate of Enforcement and others (2006) 4 SCC 278.
Learned ASG submitted that the Judgment in Prakash Nath               B
Khanna (supra) calls for no reconsideration, as the same has
been uniformly applied by this Court as well as by the various
High Courts. Learned ASG also pointed out that the appellants
have been indulging in litigative exercises by which they could
hold up the proceedings for almost two decades and that the           c
trial court has rightly rejected the application for discharge,
which was affirmed by the High Court and the same calls no
interference by this Court.

    13. We may formulate the questions that arise for our
consideration, which are as under:                                    D

    (1) Whether an assessee has the liability/duty to file a
    return under Section 139(1) of the Act within the due date
    prescribed therein?
                                                                      E
    (2) What is the effect of best judgment assessment under
    Section 144 of the Act and will it nullify the liability of the
    assessee to file its return under Section 139(1) of the Act?

    (3) Whether non-filing of return under Section 139(1) of the
    Act, as well as non-compliance of the time prescribed             F
    under Sections 142 and 148 of the Act are grounds for
    invocation of the provisions of Section 276CC of the Act?
     (4) Whether the pendency of the appellate proceedings
     relating to assessment or non-attaining finality of the          G
     assessment proceedings is a bar in initiating prosecution
     proceedings under Section 276CC due to non-filing of
     returns?
    (5) What is the scope of Section 278E of the Act, and at
    what stage the presumption can be drawn by the Court?             H
    190      SUPREME COURT REPORTS                [2014} 2 S.C.R.


A      14. We may, at the outset, point out that the appellants had
  earlier approached this Court and filed SLP(C) Nos.3655-3658
  of 2005 which were disposed of by this Court directing the trial
  court to dispose of the petition for discharge within a period of
  two months by its order dated 03.03.2006. Learned Chief
B Metropolitan Magistrate rejected the petitions vide its order
  dated 14.06.2006. Though the High Court affirmed the said
  order vide its judgment dated 02.12.2006, these appeals were
  kept pending before this Court over six years for one reason
  or another.
c       15. We are, in these appeals, concerned with the question
  of non-filing of returns by the appellants for the assessment year
  1991-92, 1992-93 and 1993-94. Each and every order passed
  by the revenue as well as by the Courts were taken up before
  the higher courts, either through appeals, revisions or writ
D petitions. The details of the various proceedings in respect of
  these appeals are given in paragraph 30 of the written
  submissions filed by the revenue, which reveals the dilatory
  tactics adopted in these cases. Courts, we caution, be guarded
  against those persons who prefer to see it as a medium for
E stalling all legal processes. We do not propose to delve into
  those issues further since at this stage we are concerned with
  answering the questions which have been framed by us.

         16. Section 139 of the Act prior to 1989-90 and after,
F placed a statutory mandate on every person to file an income
  tax return in the prescribed form and in the prescribed manner.
  The Direct Tax Laws (Amendment) Act, 1987 with effect from
  01.04.1989 made various amendments to the Income Tax Act,
  by which the assessing officer has no power to extend the time
G for filing a return of income under Section 139(1) and to extend
  the time for filing under Section 139(3), a return of loss intended
  to be carried forward. The time prescribed for filing a belated
  return under Section 139(4) or a revised return under Section
  139(5) was reduced to one year from the end of the relevant
H assessment year. The provision of Secticn 139(2) stood
 SASI ENTERPRISES v. ASSISTANT COMMISSIONER 191
    OF INCOME TAX [K.S. RADHAKRISHNAN, J.]
 incorporated in Section 142(1)(i). The notice under Section            A
 142(1 )(i) to furnish a return of income cannot be issued in the
 course of the assessment year itself and need not give the
 person concerned a minimum period of 30 days for furnishing
 the return. When a return is furnished pursuant to a notice under
 SectioA 142(1)(i), the assessment may be made under Section            B
 143 without recourse to Section 147. Further, with the deletion
 of Section 271 (1 )(a), a penalty for failure to furnish in due time
 a return of income under Section 139(1), is abolished. Levy of
 punitive interest under Section 234A made mandatory and the
 discretion of the assessing officer to reduce or waive the             c
 interest was taken away. Non-compliance with a notice under
 Section 142(1 )(i) may attract prosecution under Section
 276CC.

       17. The Income Tax Act, therefore, had stipulated both the
  penalty under Section 271 (1)(a) and prosecution under Section        D
  276CC, the former for depriving taxes due to the exchequer and
  later for the offence/infraction committed. As already indicated
  by the Taxation Laws (Amendment) Act, 1989, penalty provision
  under Section 271 (1 )(a) had been deleted w.e.f. 01.04.1989
  and a provision for levy of mandatory/compulsory interest under       E
  Section 234A of the Act was introduced. But, legislature has
· never waived or relaxed its prosecuting provisions under
  Section 276CC of the Act for the infraction or non-furnishing of
  return of income.
                                                                        F
     18. Section 139 of the Act, as it stood at the relevant time,
 reads as under:

      "139. (1) Every person, if his total income or the total
      income of any other person in respect of which he is
      assessable under this Act during the previous year G
      exceeded the maximum amount which is not chargeable
      to income-tax, shall, on or before the due date, furnish a
      return of his income or the income of such other person
      during the previous year, in the prescribed form and
      verified in the prescribed manner and setting forth such · H
                      .
    192       SUPREME COURT REPORTS                 [2014] 2 S.C.R.


A         other particulars as may be prescribed.

          Explanation: In this sub-section, "due date" means-

          (a) where the assessee is a company, the 30th day of
          November of the assessment year;
B
          (b) where the assessee is a person, other than a
          company.-

          (i) in a case where the account!; of the assessee are
          required under this Act or nay other law to be audited, or
c         where the report of any accountant is required to be
          furnished under section SOHHC or Section SOHHD or in
          the case of a co-operative society, the 31st day of October
          of the assessment year:

D         (ii) in a case where the total income referred to in this sub-
          section includes any income from business or profession,
          not being a case falling under sub-clause (i), the 31st day'-
          of August of the assessment year :

E         (iii) in any other case, the 30th day of June of the
          assessment year.

                xxx                    xxx               xxx
                xxx                    xxx               xxx
F
          (3) If any person who has sustained a loss in any previous
          year under the head "Profits and gains of business or·
          profession" or under the head "Capital gains" and claims
          that the loss or any part thereof should be carried forward
          under sub-section (1) of section 72, or sub-section (2) of
G
          section 73, or sub-section (1) or sub-section (3) of section
          74, or sub-section (3) of section 74A, he may furnish, within
          the time allowed under sub-section (1), a return of loss in
          the prescribed form and verified in the prescribed manner
          and containing such other particulars as may be
H
 SAS! ENTERPRISES v. ASSISTANT COMMISSIONER 193
    OF INCOME TAX [K.S. RADHAKRISHNAN, J.]
      prescribed, and all the provisions of this Act shall apply as     A
      if it were a return under sub-section (1).

      (4) Any person who has not furnished a return within the
      time allowed to him under sub-section (1 ), or within the
      time allowed under a notice issued under sub-section (1)          8
      of section 142, may furnish the return for any previous year
      at any time before the expiry of one year from the end of
      the relevant assessment year or before the completion of
      the assessment, whichever is earlier:

            xxx                     xxx               xxx               c
            xxx                                       xxi'
        19. A plain reading of the above provisions indicates that
  it is mandatory on the part of the assessee to file the return
  before the due date. Explanation (a) to the said section defines      D
  the term "due date", which is 30th November of the assessment
  year. The consequence of non-filing of return on time has also
  been stipulated in the Act. Further a reference to Sections 142
. and 148 is also necessary to properly understand the scope
  of Section 276CC. Relevant portion of Section 142, as it stood        E
  at the relevant time, is quoted below:

      "142. Inquiry before assessment.- (1) For the purpose
      of making an assessment under this Act, the Assessing
      Officer may serve on any person who has made a return             F
      under section 139 or in whose case the time allowed under
      sub- section (1) of that section for furnishing the return. has
      expired] a notice requiring him, on a date to be therein
      specified,-

      (i) where such person has not made a return within the time       G
      allowed under sub-section (1) of section 139, to furnish a
      return of his income or the income of any other person in
      respect of which he is assessable under this Act, ih the
      prescribed form and verified in the prescribed manner and
                                                                        H
    194       SUPREME COURT REPORTS                [2014] 2 S.C.R.


A         setting forth such other particulars as may be prescribed,
          or

               xxx                    xxx              xxx
               xxx                   xxx               XXX.'
8
         20. Section 148 refers to the issue of notice where income
    has escaped assessment. Relevant portion of the same is also
    extracted hereinbelow for ready reference:

c         "148. (1) Before making the assessment, reassessment
          or recomputation under section 147, tne Assessing Officer -
       ,_ shall serve on the assessee a notice requiring him to
          furnish within such period, not being less than thirty days,
          as may be specified in the notice, a return of his income
          or the income of any other person in respect of which he
D
          is assessable under this Act during the previous year
          corresponding to the relevant assessment year, ii') the
          prescribed form and verified in the prescribed manner and
          setting forth such other particulars as may be prescribed; .
          and the provisions of this Act shall, so far as may be, apply
          accordingly as if such return were a return required to be
          furnished under section 139.

          (2) The Assessing Officer shall, before issuing any notice
          under this section, record his reasons for doing so."
F
         21. Sub-section (1) of Section 139, clause (i) sub-section
    (1) of Section 142 and Section 148 are mentioned in Section
    276CC of the Act. Section 276CC is extracted as under:

          "276CC. Failure to furnish returns of income. If a
G         person wilfully fails to furnish in due time the return of
          income which he is required to furnish under sub-section
          (1) of section 139 or by notice given under clause (i} of
          sub-section (1) of section 142 or section 148, he shall be

H
SASI ENTERPRISES v. ASSISTANT COMMISSIONER 195
   OF INCOME TAX [K.S. RADHAKRISHNAN, J.]
    (i) in a case where the amount of tax, which '.vould have          A
    been evaded if the failure had not beeh discovered,
    exceeds one hundred thousand rupees, with rigorous
    imprisonment for a term which shall not be less than six
    months but which may extend to seven years and with fine;
                                                                       B
    (ii) in any other case, with imprisonment for a term which
    shall not be less than three months but which may extend
    to three years and with fine:

    Provided that a person shall not be proceeded against
    under this section for failure to furnish in due time the return   C
    of income under sub-section (1) of section 139-

     (i) for any assessment year commencing prior to the 1st
     day of April, 1975 ; or

     (ii) for any assessment year commencing on or after the           D
     1st day of April, 1975 , if-

     (a) the return is furnished by him before the expiry of the
     assessment year; or
                                                                       E
     (b) the tax payable by him on the total income determined
     on regular assessment, as reduced by the advance tax, if
     any, paid, and any tax deducted at source, does not
     exceed three thousand rupees."

      22. The constitutional validity of Section 276CC, was            F
upheld by the Kamataka High Court in Sonarome Chemicals
Pvt. Ltd. and others v. Union of India and others (2000) 242
ITR 39 (Kar) holding that it does not violate Article 14 of 21 of
the Constitution. Section punishes the person who ''willfully fails
to furnish the return of income in time". The explanation willful      G
default, as observed by Wilber Force J. in Wellington v.
Reynold (1962) 40 TC 209 is "some deliberate or intentional
failure to do what the tax payer ought to have done, knowing
that to omit to do so was wrong". The assessee is bound to
file the return under Section 139(1) of the Act on or before the       H
    196      SUPREME COURT REPORTS                  [2014] 2 S.C.R.


A due date. The outer limit is fixed for filing of return as 31st August
  of the assessment year, over and above, in the present case,
  not only return was not filed within the due date prescribed under
  Section 139(1) of the Act, but also the time prescribed under
  Section 142 and 148 of the Act and the further opportunity given
B to file the return in the prescribed time was also not availed of.
         23. Section 276CC applies to situations where an
    assessee has failed to file a return of income as required under
    Section 139 of the Act or in response to notices issued to the
    assessee under Section 142 or Section 148 of the Act. The
C   proviso to Section 276CC gives some relief to genuine
    assesses. The proviso to Section 276CC gives further time till
    the end of the assessment year to furnish return to avoid
    prosecution. In other words, even though the due date would
    be 31st August of the assessment year as per Section 139(1)
D   of the Act, an -assessee gets further seven months' time to
    complete and file the return and such a return though belated,
    may not attract prosecution of the assessee. Similarly, the
    proviso in clause ii(b) to Section 276CC also provides that if
    the tax payable determined by regular assessment has reduced
E   by advance tax paid and tax deducted at source does not
    exceed Rs.3,000/-, such an assessee shall not be prosecuted
    for not furnishing the return under Section 139(1) of the Act.
    Resultantly, the proviso under Section 276CC takes care of
    genuine assesses who either file the returns belatedly but within
F   the end of the assessment year or those who have paid
    substantial amounts of their tax dues by pre-paid taxes, from
    the rigor of the prosecution under Section 276CC of the Act.
       24. Section 276CC, it may be noted, takes in sub-section
  (1) of Section 139, Section 142(1)(i) and Section 148. But, the
G proviso to Section 276CC takes in only sub-section (1) of
  Section 139 of the Act and the provisions of Section 142(1 )(i)
  or 148 are conspicuously absent. Consequently, the benefit of
  proviso is available only to voluntary filing of return as required
  under Section 139(1) of the Act. In other words, the proviso
H would not apply after detection of the failure to file the return
 SASI ENTERPRISES v. ASSISTANT COMMISSIONER 197
    OF INCOME TAX [K.S. RADHAKRISHNAN, J.]

and after a notice under Section 142(1)(i) or 148 of the Act is A
issued calling for filing of the return of income. Proviso, .
therefore, envisages the filing of even belated return before the
detection or discovery of the failure and issuance of notices
under Section 142 or 148 of the Act.
                                                                      B
      25. We may in this respect also refer to sub-section (4) to
 Section 139 wherein the legislature has used an expression
 ''whichever is earlier''. Both Section 139(1) and Sub-Section (1)
 of Section 142 are referred to in sub-section (4) to Section 139,
 which specify time limit. Therefore, the expression "whichever       C
 is earlier" has to be read with the time if allowed under sub-
 section (1) to Section 139 or within the time allowed under
 notice issued under sub-section (1) of Section 142, whichever
 is earlier. So far as the present case is concerned, it is already
 noticed that the assessee had not filed the return either within
 the time allowed under sub-section (1) to Section 139 or within      D
·the time allowed under notices issued under sub-section (1) to
 Section 142.

      26. We have indicated that on failure to file the returns by
 the appellants, income tax department made a best judgment           E
 assessment under Section 144 of the Act and later show cause
 notices were issued for initiating prosecution under Section
 276CC of the Act. Proviso to Section 276CC nowhere states
 that the offence under Section 276CC has not been committed
 by the categories of assesses who fall within the scope of that      F
 proviso, but it is stated that such a person shall not be
 proceeded against. In other words, it only provides that under
 specific circumstances subject to the proviso, prosecution may
 not be initiated. An assessee who comes within clause 2(b) to
 the proviso, no doubt has also committed the offence under           G
 Section 276CC, but is exempted from prosecution since the
 tax falls below Rs.3,000/-. Such an assessee may file belated
 return before the detection and avail the benefit of the proviso.
 Proviso cannot control the main section, it only confers some
 benefit to certain categories of assesses. In short, the offence
                                                                      H
    198       SUPREME COURT REPORTS                     [2014] 2 S.C.R.


A   under Section 276CC is attracted on failure to comply with the
    provisions of Section 139(1) or failure to respond to the notice
    issued under Section 142 or Section 148 of the Act within the
    time limit specified therein.

8      '27. We may indicate that the above reasoning has the
  support of the Judgment of this Court in Prakash Nath Khanna
  (supra). When we apply the above principles to the facts of the
  case in hand, the contention of the learned senior counsel for
  the appellant that there has not been any willful failure to file their
C return cannot be accepted and on facts, offence under Section
  276CC of the Act has been made out in all these appeals and
  the rejection of the application for the discharge calls for no
  interference by this Court.

         28. We also find no basis in the contention of the learned
D   senior counsel for the appellant that pendency of the appellate
    proceedings is a relevant factor for not initiating prosecution
    proceedings under Section 276CC of the Act. Section 276CC
    contemplates that an offence is committed on the non-filing of
    the return and it is totally unrelated to the pendency of
E   assessment proceedings except for second part of the offence
    for determination of the sentence of the offence, the department
    may resort to best judgment assessment or otherwise to past
    years to determine the extent of the breach. The language of
    Section 276CC, in our view, is clear so also the legislative
F   intention. It is trite law that as already held by this Court in B.
    Permanand v. Mohan Koikal (2011) 4 SCC 266 that "the
    language employed in a statute is the determinative factor of
    the legislative intent. It is well settled principle of law that a court
    cannot read anything into a statutory provision which is plain
G   and unambiguous". If it was the intention of the legislature to
    hold up the prosecution proceedings till the assessment
    proceedings are completed by way of appeal or otherwise the
    same would have been provided in Section 276CC itself.
    Therefore, the contention of the learned senior counsel for the
H   appellant that no prosecution could be initiated till the
SASI ENTERPRISES v. ASSISTANT COMMISSIONER 199
   OF INCOME TAX [K.S. RADHAKRISHNAN, J.]
culmination of assessment proceedings, especially in a case             A
where the appellant had not filed the return as per Section
139(1) of the Act or following the notices issued under Section
142 or Section 148 does not arise.
      29. We are also of the view that the declaration or
statement made in the individual returns by partners that the           B
accounts of the firm are not finalized, hence no return has been
filed by the firm, will not absolve the firm in filing the 'statutory
return under section 139(1) of the Act. The firm is independently
required to file the return and merely because there has been
a best judgment assessment under Section 144 would not                  C
nullify the liability of the firm to file the return as per Section
139(1) of the Act. Appellants' contention that since they had in
their individual returns indicated that the firm's accounts had not
been finalized, hence no returns were filed, would mean that
failure to file return was not willful, cannot be accepted.             D
     30. Section 278E deals with the presumption as to
culpable mental state, which was inserted by the Taxation Laws
(Amendment and Miscellaneous Provisions) Act, 1986. The
question is on whom the burden lies, either on the prosecution
or the assessee, under Section 278E to prove whether the                E
assessee has or has not committed willful default in filing the
returns. Court in a prosecution of offence, like Section 276CC
has to presume the existence of mens rea and it is for the
accused to prove the contrary and that too beyond reasonable
doubt. Resultantly, the appellants have to prove the                    F
circumstances which prevented them from filing the returns as
per Section 139(1) or in response to notices under Sections
142 and 148 of the Act.
     31. We, therefore, find no reason to interfere with the order      G
passed by the High Court. The appeals, therefore, lack merits
and the same are dismissed and the Criminal Court is directed
to complete the trial within four months from the date of receipt
of this Judgment.                     ·
.R.P.                                         Appeals dismissed.        H