| Case ID |
ffeaee78-55dd-402d-8b55-911f687ee740 |
| Body |
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| Case Number |
Criminal Revisions Cases Nos. 627 and 628 and Crim |
| Decision Date |
Feb 25, 1992 |
| Hearing Date |
|
| Decision |
The convictions and sentences imposed against the petitioners were set aside due to the lack of evidence proving a wilful attempt to evade tax. The petitioners' argument that their brothers assisted the firm and were thus remunerated was accepted, and it was concluded that there was no mens rea present when filing the returns. Consequently, the petitioners were acquitted, and the fines paid were ordered to be refunded. |
| Summary |
In this landmark case involving the Income Tax Act, 1961, the primary focus was on the wilful attempt to evade tax and the necessity of establishing mens rea. The case revolved around Krishna Medical Stores, where the second petitioner, a partner, was accused of signing and verifying false returns. The prosecution alleged that the remuneration paid to the petitioner's brothers was falsely claimed to evade taxes. However, upon reviewing the evidence, the court found that the brothers were indeed assisting the firm and had declared their remuneration in their tax returns, which were accepted. The court emphasized the significance of proving mens rea and concluded that mere verification of returns does not constitute a wilful attempt unless there is evidence of intent to evade taxes. The case highlights the crucial role of proving intent in tax evasion prosecutions under the Income Tax Act. The decision underscores the complexities involved in tax-related offenses and the necessity for the prosecution to establish both the act and the intent beyond a reasonable doubt. This case is a pivotal reference for understanding the application of sections 276C and 277, especially in scenarios involving alleged false entries and statements in tax returns. |
| Court |
Special Judge for Economic Offences at Hyderabad
|
| Entities Involved |
KRISHNA MEDICAL STORES,
G. Ramarao,
G. Mallikharjunarao
|
| Judges |
ESWARA PRASAD
|
| Lawyers |
Sri Venkataiah
|
| Petitioners |
KRISHNA MEDICAL STORES
|
| Respondents |
Income Tax OFFICER
|
| Citations |
1995 SLD 801,
1995 PTD 283,
(1994) 206 ITR 76
|
| Other Citations |
CIT (Addl.) v. Burugupalli China Krishnamurthy (1980) 121 ITR 326 (AP),
ITO v. Autofil (1990) 184 ITR 47 (AP),
Gujarat Travancore Agency v. CIT (1989) 177 ITR 455 (SC),
Shree Singhvi Bros. v. Union of India (1991) 187 ITR 219 (Raj),
Thakasi Satyanarayana v. State of A. P. (1985) 153 ITR 818 (AP)
|
| Laws Involved |
Income Tax Act, 1961
|
| Sections |
276C(1),
277,
278
|