I missed the due date but I did file the return under s.139(4) before the assessment. Doesn't that mean I filed 'in due time' and cannot be prosecuted under s.276CC?
No. The only place the Act fixes a time for furnishing the return is s.139(1); s.139(4) merely permits a belated return, and filing one does not wipe out the infraction of having missed the s.139(1) date. Whether the failure was wilful is a question for the trial court, where s.278E requires the court to presume a culpable mental state and leaves it to you to prove its absence.
Decided by the Supreme Court (Doraiswamy Raju J and Arijit Pasayat J) on 2004-02-16, reported as (2004) 266 ITR 1 (SC); Criminal Appeal Nos. 1260-1261 of 1997. It bears on section 276CC, section 139(1), section 139(4), section 278E, section 271(1)(a) of the Income Tax Act 1961, in Prosecution matters.
This is the argument almost every s.276CC notice is answered with, and the Supreme Court has closed it. The reader's real defences lie elsewhere: the proviso to s.276CC, which bars proceedings where the s.139(1) return was furnished before the expiry of the assessment year, or where the tax payable on regular assessment as reduced by advance tax and TDS does not exceed the statutory limit; and the trial defence of absence of wilfulness. Note the limit in the proviso has changed — the judgment reproduces the pre-2016 figure of Rs 3,000, and the Finance Act 2016 raised it to Rs 10,000 with effect from 1 April 2016. The Court also fixed the burden: under s.278E(2) a fact is proved only when the court believes it to exist beyond reasonable doubt, not on a preponderance of probability, so the accused's task at trial is heavier than in an ordinary criminal case.
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The three appellants were partners of M/s Kailash Nath and Associates, a firm of five partners of which one Shri Kailash Nath was the managing partner under a deed dated 1 April 1983. For assessment year 1988-89 the return of income was due on or before 31 July 1988 but was in fact filed on 20 March 1991. Assessment under s.143(3) was completed on 26 August 1991. Penalty proceedings under s.271(1)(a) were taken for late submission of the return and penalty was imposed. A complaint under s.276CC was also filed by the Assistant Commissioner of Income Tax, Circle I, Shimla before the Chief Judicial Magistrate, Shimla, who took cognizance and issued process. The appellants moved writ petitions in the Himachal Pradesh High Court challenging the legality of those proceedings. Their case was that the delay was unavoidable because the managing partner, who was responsible for the accounts, had not communicated their shares of profit; that they had no guilty mind; that they had filed voluntarily and paid advance tax and self-assessment tax; that the amount allegedly evaded, put at Rs 5,68,039 in the complaint, was based on no evidence; and that having suffered interest and penalty they could not also be prosecuted. A Division Bench of the High Court dismissed the writ petitions and the appellants came to the Supreme Court.
The appeals were dismissed. A return furnished under s.139(4) does not amount to compliance with s.139(1) for the purposes of s.276CC, and the infraction of not furnishing the return within the time prescribed by s.139(1) is not condoned by a later filing under s.139(4). The question whether the failure was wilful is to be adjudicated factually by the court trying the prosecution, and s.278E requires that court to presume the existence of a culpable mental state, absence of which the accused may plead as a defence at trial.
The Court began with the language of the section. The only significant expression was 'in due time', and the time within which the return is to be furnished is indicated only in s.139(1), not in s.139(4); if a belated return under s.139(4) sufficed, the expression 'in due time' would lose its relevance and would have been used without purpose. Section 276CC refers in terms to sub-sections (1) and (2) of s.139 and to s.148, and had the legislature intended to cover sub-section (4) the words 'Section 139' alone would have sufficed; the conspicuous omission of sub-section (4) could not be treated as meaningless. Accepting the appellants' construction would mean that a person who missed the due date would gain by filing much later, which could not be the legislative intent. The Court declined to read anything into a plain and unambiguous provision, invoking the settled rules that the intention of the legislature is found in the words used, that a casus omissus cannot be supplied except in a case of clear necessity found within the four corners of the statute, and that a marginal note cannot control the meaning of the body of the section where the language is clear. Kullu Valley Transport, on which the appellants relied, was distinguished as having been decided in a conceptually different situation under ss.22(1) and 22(3) of the 1922 Act, on the treatment of a return of loss, a matter now governed specifically by s.80; the fact that a s.139(4) return is treated as one filed in time for the purposes of assessment and of carrying forward losses could not be extended beyond its legitimate purpose. On the argument that s.276CC applies only where there is discovery of a failure involving evasion, the Court held the provision has two parts — the infraction, and the measure of punishment — and that the second part covers two situations, one where the tax that would have been evaded exceeds the specified sum and a residuary 'in any other case'; the appellants' construction would obliterate the consequences of non-filing altogether. Finally the Court set out s.278E in full, noted the statutory presumption of a culpable mental state and the requirement in sub-section (2) that a fact is proved only when the court believes it to exist beyond reasonable doubt and not merely on a preponderance of probability, and held that the factual pleas were therefore rightly left to the trial.
That being so, even if a return is filed in terms of sub-section (4) of Section 139 that would not dilute the infraction in not furnishing the return in due time as prescribed under sub-section (1) of Section 139.
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Handle my notice → Ask a CA on WhatsAppNo. The only place the Act fixes a time for furnishing the return is s.139(1); s.139(4) merely permits a belated return, and filing one does not wipe out the infraction of having missed the s.139(1) date. Whether the failure was wilful is a question for the trial court, where s.278E requires the court to presume a culpable mental state and leaves it to you to prove its absence. This was decided by the Supreme Court (Doraiswamy Raju J and Arijit Pasayat J) and bears on section 276CC, section 139(1), section 139(4), section 278E, section 271(1)(a) of the Income Tax Act 1961. It is reported as (2004) 266 ITR 1 (SC); Criminal Appeal Nos. 1260-1261 of 1997. This is the argument almost every s.276CC notice is answered with, and the Supreme Court has closed it. The reader's real defences lie elsewhere: the proviso to s.276CC, which bars proceedings where the s.139(1) return was furnished before the expiry of the assessment year, or where the tax payable on regular assessment as reduced by advance tax and TDS does not exceed the statutory limit; and the trial defence of absence of wilfulness. Note the limit in the proviso has changed — the judgment reproduces the pre-2016 figure of Rs 3,000, and the Finance Act 2016 raised it to Rs 10,000 with effect from 1 April 2016. The Court also fixed the burden: under s.278E(2) a fact is proved only when the court believes it to exist beyond reasonable doubt, not on a preponderance of probability, so the accused's task at trial is heavier than in an ordinary criminal case. If it applies to you, the first step is this: Stop arguing that the belated return under s.139(4) is a return 'in due time' — that argument is foreclosed and wastes the only hearing you get.
The three appellants were partners of M/s Kailash Nath and Associates, a firm of five partners of which one Shri Kailash Nath was the managing partner under a deed dated 1 April 1983. For assessment year 1988-89 the return of income was due on or before 31 July 1988 but was in fact filed on 20 March 1991. Assessment under s.143(3) was completed on 26 August 1991. Penalty proceedings under s.271(1)(a) were taken for late submission of the return and penalty was imposed. A complaint under s.276CC was also filed by the Assistant Commissioner of Income Tax, Circle I, Shimla before the Chief Judicial Magistrate, Shimla, who took cognizance and issued process. The appellants moved writ petitions in the Himachal Pradesh High Court challenging the legality of those proceedings. Their case was that the delay was unavoidable because the managing partner, who was responsible for the accounts, had not communicated their shares of profit; that they had no guilty mind; that they had filed voluntarily and paid advance tax and self-assessment tax; that the amount allegedly evaded, put at Rs 5,68,039 in the complaint, was based on no evidence; and that having suffered interest and penalty they could not also be prosecuted. A Division Bench of the High Court dismissed the writ petitions and the appellants came to the Supreme Court. The matter was decided on 2004-02-16 by the Supreme Court (Doraiswamy Raju J and Arijit Pasayat J). On those facts the Supreme Court held as follows. The appeals were dismissed. A return furnished under s.139(4) does not amount to compliance with s.139(1) for the purposes of s.276CC, and the infraction of not furnishing the return within the time prescribed by s.139(1) is not condoned by a later filing under s.139(4). The question whether the failure was wilful is to be adjudicated factually by the court trying the prosecution, and s.278E requires that court to presume the existence of a culpable mental state, absence of which the accused may plead as a defence at trial.
The Court began with the language of the section. The only significant expression was 'in due time', and the time within which the return is to be furnished is indicated only in s.139(1), not in s.139(4); if a belated return under s.139(4) sufficed, the expression 'in due time' would lose its relevance and would have been used without purpose. Section 276CC refers in terms to sub-sections (1) and (2) of s.139 and to s.148, and had the legislature intended to cover sub-section (4) the words 'Section 139' alone would have sufficed; the conspicuous omission of sub-section (4) could not be treated as meaningless. Accepting the appellants' construction would mean that a person who missed the due date would gain by filing much later, which could not be the legislative intent. The Court declined to read anything into a plain and unambiguous provision, invoking the settled rules that the intention of the legislature is found in the words used, that a casus omissus cannot be supplied except in a case of clear necessity found within the four corners of the statute, and that a marginal note cannot control the meaning of the body of the section where the language is clear. Kullu Valley Transport, on which the appellants relied, was distinguished as having been decided in a conceptually different situation under ss.22(1) and 22(3) of the 1922 Act, on the treatment of a return of loss, a matter now governed specifically by s.80; the fact that a s.139(4) return is treated as one filed in time for the purposes of assessment and of carrying forward losses could not be extended beyond its legitimate purpose. On the argument that s.276CC applies only where there is discovery of a failure involving evasion, the Court held the provision has two parts — the infraction, and the measure of punishment — and that the second part covers two situations, one where the tax that would have been evaded exceeds the specified sum and a residuary 'in any other case'; the appellants' construction would obliterate the consequences of non-filing altogether. Finally the Court set out s.278E in full, noted the statutory presumption of a culpable mental state and the requirement in sub-section (2) that a fact is proved only when the court believes it to exist beyond reasonable doubt and not merely on a preponderance of probability, and held that the factual pleas were therefore rightly left to the trial. In the words reproduced by the source cited on this page: "That being so, even if a return is filed in terms of sub-section (4) of Section 139 that would not dilute the infraction in not furnishing the return in due time as prescribed under sub-section (1) of Section 139." The decision followed or applied Commissioner of Income Tax, Punjab v. Kullu Valley Transport Co. Pvt. Ltd. (1970) 77 ITR 518 (SC) — distinguished as decided in a conceptually different situation; Padma Sundara Rao (dead) and Ors. v. State of Tamil Nadu and Ors. (2002) 3 SCC 533 — applied on literal construction; C.I.T. v. Ahmedbhai Umarbhai and Co. AIR 1950 SC 134 — applied on marginal notes.
It was decided by the Supreme Court on 2004-02-16 and is reported as (2004) 266 ITR 1 (SC); Criminal Appeal Nos. 1260-1261 of 1997. Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section 276CC, section 139(1), section 139(4), section 278E, section 271(1)(a), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The appeals were dismissed. A return furnished under s.139(4) does not amount to compliance with s.139(1) for the purposes of s.276CC, and the infraction of not furnishing the return within the time prescribed by s.139(1) is not condoned by a later filing under s.139(4). The question whether the failure was wilful is to be adjudicated factually by the court trying the prosecution, and s.278E requires that court to presume the existence of a culpable mental state, absence of which the accused may plead as a defence at trial. It arises in Prosecution matters, on section 276CC, section 139(1), section 139(4), section 278E, section 271(1)(a) of the Income Tax Act 1961, and was decided by Doraiswamy Raju J and Arijit Pasayat J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Compute the two proviso limbs on your own facts first: was the s.139(1) return furnished before the end of the assessment year, and what is the tax payable on regular assessment after deducting advance tax and TDS? Check the limit applicable to the year in question (Rs 3,000 before 1 April 2016, Rs 10,000 from that date). Remember the proviso is confined to a return under s.139(1); a return called for by notice under s.142(1)(i) or s.148 does not attract it. Build the absence-of-wilfulness case as trial evidence, not as a quashing ground — the Court held the factual aspects were rightly not dealt with by the High Court. Plan the defence around s.278E(2): you must displace the presumed culpable mental state beyond reasonable doubt, so put contemporaneous documents on record rather than relying on assertion. Do not rely on a penalty under s.271(1)(a) having already been imposed; the plea of double jeopardy was raised here and did not save the appellants.
Still good law. Applied by the Supreme Court in Sasi Enterprises v. ACIT (2014) 361 ITR 163, as recorded and quoted at length in the two High Court judgments read for this pass. Followed and relied on by the Telangana High Court in Sada Kesava Reddy v. Dy. CIT (Crl.R.C. No. 2922 of 2017, decided 31 October 2022), which dismissed a revision against refusal of discharge on this authority, and discussed by the Gujarat High Court in Ganga Devi Somani v. State of Gujarat (R/Cr.M.A. No. 22512 of 2019, decided 6 July 2021). Both of those judgments were read in full for this entry. No decision doubting or overruling it was located, but no exhaustive citator check was performed. The statutory figures reproduced in the judgment are out of date — see the editor note. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The print of this judgment carries no paragraph numbers, so the key quote is located by the sentence it follows rather than by a number. The Court reproduced s.276CC, s.139(1) and s.139(4) expressly 'as they stood at the relevant point of time' (assessment year 1988-89): the proviso as quoted shows the Rs 3,000 limit, which the Finance Act 2016 raised to Rs 10,000 with effect from 1 April 2016, and clause (i) shows the Rs 1,00,000 threshold, since raised to Rs 25,00,000. The reproduced text also predates the substitution of 'clause (i) of sub-section (1) of section 142' for 'sub-section (2) of section 139', which the judgment itself notes. Do not read the statutory extracts in this judgment as current law. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeals were dismissed. A return furnished under s.139(4) does not amount to compliance with s.139(1) for the purposes of s.276CC, and the infraction of not furnishing the return within the time prescribed by s.139(1) is not condoned by a later filing under s.139(4). The question whether the failure was wilful is to be adjudicated factually by the court trying the prosecution, and s.278E requires that court to presume the existence of a culpable mental state, absence of which the accused may plead as a defence at trial.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
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