S. 276CC Prosecution

Section 276CC applies to situations where an assessee has failed to file a return of income as required under Section 139(1) of the Act or in response to notices issued to the assessee under Section 142 or Section 148 of the Act. The proviso to Section 276CC gives some relief to genuine assessees. The proviso to Section 276CC gives further time till the end of the assessment year to furnish return to avoid prosecution. However the proviso would not apply after detection of the failure to file the return and after a notice under Section 142(1)(i) or 148 of the Act is issued calling for filing of the return of income. Prosecution proceedings could not be held till the culmination of assessment proceedings. The declaration or statement made in the individual returns by partners that the 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. Further this would not mean that failure to file return was not wilful. It was further held that 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. – Sasi Enterprises vs. ACIT [2014] 41 taxmann.com 500 (SC).